IT’S NOT A HOUSE, IT’S A HOME*
Whether you’re downsizing or upsizing, buying your first home, or purchasing an investment property or development site, it is prudent to get the proposed contract and disclosure documents reviewed by a lawyer before signing on the dotted line.
What are you buying?
Buyer beware, you are purchasing the property ‘warts and all’, including any illegal structures, termites, flammable cladding, asbestos and hidden defects.
What you see is not always what you get, and it is important to check that the position and dimensions of the property align with the registered title plan. It is too late once you have bought the property to complain that the boundary fence should be another foot further out.
Sometimes a property can be made up of more than one title, so make sure what you think you are buying is particularised in the title documents. For example, units may have a carpark or storage unit included on a separate title, and it is commonplace for development sites to span several blocks.
Check what’s included in the sale as a fixture (such as oven, dishwasher, carpeting, lights, fixed window furnishings, pool equipment), and what is a fitting that can be removed from the property unless specifically included in the sale (for example, fridge, sound system, wall mounted TV, microwave).
For new developments, make sure any variations are agreed to in writing, all too often things get lost in translation.
What are the terms?
Once you have signed the contract, you are bound by the terms and conditions set out in that document so pay special attention to the particulars of sale, such as the price and deposit payable, the settlement date, whether the property is sold vacant or subject to a lease, and any building inspection reports.
If the property is sold subject to a lease, get advice on the terms of the lease, conduct due diligence on the tenant, and take note of any options to renew.
If the contract is subject to obtaining finance, negotiate as long a period as possible to obtain loan approval, particularly in the current credit market.
And don’t assume that the special conditions in the contract are standard. These always deserve careful review and potential negotiation between the parties.
Can you use the property as intended?
Expert advice on the disclosure documents is imperative. Check for planning scheme restrictions and overlays, the position of easements (for sewers, drainage and electricity), and any covenants, section 173 agreements, or owner’s corporation rules which may impact on what you can do with the land.
For developers, investigate if the area is fire or flood prone, if there are contamination or groundwater issues, whether you are required to pay a growth areas infrastructure contribution (GAIC) or if there are special biodiversity conservation requirements, to save the Golden Sun Moths for example.
What are the costs?
Remember it’s not just the agreed price that you will have to stump up. Consider if GST is payable and get an estimate of stamp duty, registration fees, legal costs, and finance and valuation costs.
Be aware of not just the transaction costs but any other amounts you will be liable for such as ongoing rates and charges, land tax, service connection fees, insurance costs, the cost of complying with notices.
*In the words of Darryl Kerrigan in my favourite legal documentary (aka 1997 Australian comedy film) The Castle.