Conveyancing is the transfer and registration of title in property from one party to another, whether that transfer is triggered by the sale or purchase of real estate, a family law property settlement, or disposals / acquisitions between family members, trusts or corporate entities.
The sale or purchase of a house is governed by the contract for sale which sets out the parties’ rights and responsibilities, the legal description of the property, purchase price and completion date. The contract contains important disclosure information regarding matters such as encumbrances, easements and zoning details and the seller must give certain warranties regarding the property and its dwellings.
In the ACT it contains building, pest, compliance reports and EER (Energy Efficiency Rating). Which the buyer is required to pay for on completion.
Contracts generally include additional terms and conditions which must be carefully reviewed so that both parties are aware of their legal obligations and can proceed to complete the contract without delay or penalty.
Buying a unit in a strata title or unit development requires additional considerations to purchasing a free-standing home. Prospective purchasers need to investigate the body corporate records and review by-laws and rules which may regulate matters such as the use and development of the property, parking and the keeping of pets.
When a purchase is completed, an owner holds legal title to the individual unit as well as an interest with other lot owners in the common property (stairways, lifts and gardens). The owner automatically becomes a member of the body corporate, which is responsible for managing the common property, arranging insurances, repairs and maintenance, etc. These costs are paid for from levies which must be paid by each owner and factored into a prospective purchaser’s plans.
Land may be purchased as an existing title, or a parcel yet to be created and registered from a plan of subdivision. The usual investigations must be carried out to ensure that planning regulations permit the intended use of the land and that any easements or restrictions affecting the land do not pose unreasonable limits on its proposed use and future development.
Off the plan
Buying off the plan concerns purchasing a dwelling that has not yet been built. An off the plan purchase may not settle for two to three years after negotiations. Contracts are usually lengthy with many conditions that allow (reasonable) delays for a developer to finish building and complete the contract, and permit variations in design, size and finishes. These provisions should be fair and balance the rights of the seller and purchaser.
Once a development is completed and approved, purchasers usually have around two weeks to complete the contract. Purchasers need to ensure that they can finance an off the plan purchase, taking into account the delay between entering and completing the contract and the various contingencies that may occur during this time, such as a change in personal and financial circumstances and fluctuations in the property market.
When foreign residents dispose of certain taxable Australian property over a prescribed threshold amount (presently $750,000.00), purchasers must withhold and pay to the Australian Taxation Office 12.5% of the proceeds from the sale unless the vendor provides a ‘clearance certificate’ or statement that a lesser amount is payable. This legislation assists in the collection of foreign residents’ capital gains tax liabilities. Parties to these transactions should be aware of their obligations.
Home Buyer Assistance with Stamp Duty Concessions and First Home Owner Grants
First home buyers may be eligible for First Home Owners Concessions providing discounted or no transfer duty, and in NSW grants under the First Home Owners’ Grant Scheme. These concessions and grants provide considerable savings and assistance for eligible first home buyers, helping them to enter the property market. Prospective purchasers can check their eligibility and relevant grants and / or concessions with O’Connor Harris..
Mortgages and refinancing
Most of us rely on getting a loan from a bank or building society to purchase real estate which will be secured by a mortgage registered over the property. A mortgage is a ‘statutory charge’ in favour of a lender and secures repayment of the money loaned. The loan agreement gives the lender the right to sell the property for certain breaches of the loan contract.
A mortgage is a substantial commitment and it is recommended that legal advice be obtained when getting or refinancing a loan or when experiencing difficulties meeting your mortgage repayments under an existing loan.
Property may be transferred between family members for a number of reasons, whether pursuant to family court orders, to restructure ownership interests, to provide for asset protection, or for estate planning purposes. Certain family transfers may be eligible for stamp duty exemptions and must be considered in light of any taxation and other implications.
When transferring property between family members, it is important to obtain independent legal and financial advice.