In Queensland the buyer is required to do its own investigations on the property as the seller has limited obligations to disclose information about existing dwellings. However, the seller provides some statutory warranties about the property to the buyer.
Real estate agents commonly complete a standard form REIQ Contract (Real Estate Institute of Queensland) and attend to exchange of contracts. It is therefore imperative that buyers obtain legal advice on the contract and conduct necessary searches on the property as soon as possible after exchange. Likewise, the seller needs to obtain legal advice regarding its statutory warranties as soon as possible, preferably prior to signing the contract.
The buyers has a 5 business day cooling off period. Usually the Purchaser also negotiates a ‘due diligence’ and / or a ‘building and pest’ and / or a ‘finance’ period into the contract to enable it to satisfy any concerns about the property.
In Queensland time is of the essence so the buyer’s and seller’s lawyers need to act quickly and efficiently.
The property is at risk of the buyer from the contract date and the buyer needs to obtain property insurance from the date of the contract.
New South Wales
In New South Wales the seller is obliged to disclose specific information regarding the property, known as prescribed documents such as:-
- copies of a recent title search;
- a copy of the registered plan;
- any other registered dealings noted on the title search;
- a Section 149 Council certificate; and
- drainage diagrams.
Providing the incorrect information may provide the buyer with an opportunity to cancel the contract.
Sellers are required to have a sale contract prepared by a lawyer or conveyancer before the property is advertised for sale. The seller should have its special conditions noted in the sale contract when the property is advertised.
Purchasers should have the sales contract reviewed by a lawyer or conveyancer to avoid problems further on. Purchasers need to act fast not to lose out to other interested purchasers.
The purchaser has a 5 business day cooling off period but in a sellers’ market it is common practice for purchasers to experience some kind of pressure to waive their cooling off rights.
Should the purchaser exercise its cooling off right it will pay 0.25% of the purchase price to the seller.
The property is at risk to the buyer from the settlement date and the buyer needs to arrange insurance from the settlement date.
The Sale of Land Act in Victoria requires the seller to provide specific information about the property in a Section 32 Vendor Statement. The information contained in this statement has to be accurate or the buyer may be able to cancel the contract.
Section 31 of the Sale of Land Act provides for a 3 business day cooling off period. This allows the purchaser to cancel the contract without any repercussions bar for a minimum payment of $100.00 or 0.2% of the purchase price, whichever is the greater.
Exemptions may apply and the cooling off period may be waived when a purchaser obtains independent legal advice prior to signing the contract.
Australian Capital Territory
Property ownership in ACT is leasehold meaning you don’t receive title to the property rather a very long term lease.
There are strict seller disclosure obligations and the seller is required to obtain building, pest and energy rating inspections before the property is advertised for sale.
The property is at the risk of the buyer soon after exchange (similar to QLD) therefore buyers need to obtain insurance as quickly as possible.
In South Australia the seller is required to provide a Vendors Statement (Form 1) about the property. This is a legal requirement that all vendors, sales representatives, agents and auctioneers must comply with.
The buyer is entitled to a 2 business day cooling off period after having received the Form 1 and the contract.
The purchaser must also be provided with a Buyers Information Notice which contains general information about the property for sale that may affect the purchaser’s safety, enjoyment and use of the property. It should also refer to aspects of the property such as whether there are any asbestos in the property or of any easements.
The Vendor’s statement provides important information about the property. You must be given a copy before settlement but it may be supplied to prospective buyers on request. The cooling off period begins when the later of either the contract for sale is signed or the Vendor’s Statement is given to the buyer.
All the information on the Form 1 must be factually correct and accurate and signed by the seller. If there is any incorrect information the purchaser may withdraw from the transaction.
Information on the form 1 should include:
- Information about the property’s certificate of title;
- Details of any mortgages registered on title;
- Caveats, easements, covenants or other encumbrances;
- Zonings and outgoings such as water rates; and
- The condition of the buildings and whether they comply with all relevant regulations
It is common practice in South Australia to obtain title insurance rather than conducting searches on the property.
In Tasmania there is no current seller disclosure regime. There is also no cooling off period for buyers so they should always obtain legal advice before signing a contract.
Cooling off periods for residential property sales are not recognised in Tasmanian legislation. Also, there are no legal obligations on a seller to disclose defects in the property. ‘Buyer beware’ is the position you should take.
A buyer can ask Council if there are any relevant records in relation to the property. A Land Information Certificate may reveal:-
- Whether completion certificates have been issued for building and plumbing permits;
- Whether there is an occupancy permit for the building;
- If there are any outstanding enforcement notices issued on the property; and
- The zoning of the property.
The Northern Territory also has limited seller disclosure obligations and the buyer must make its own investigations. It is common for contracts to be conditional upon satisfactory inspections by the buyer within 10 business days from the exchange of contract.
Contracts must provide the buyer with four business days cooling off period. The cooling off period starts the day the contract is exchanged.
The cooling off period may be waived, reduced or extended by negotiation and agreement with the seller.
As with any state or territory it is essential to have local knowledge.
In Western Australia, the standard residential sales contract has two sections:
- Contract for Sale of Land or Strata Title by Offer and Acceptance; and
- Joint Form of General Conditions for the Sale of Land (General Conditions).
Buyers do not have the benefit of a cooling off period in Western Australia.
It is recommended that prior to making an offer a buyer should conduct a thorough inspection of the property to make themselves familiar with the fixtures, fittings and condition of the property. If any repairs are required, a condition should be included in the offer compelling the seller to undertake the repairs prior to settlement. It is prudent to make the offer conditional upon all gas, electrical and plumbing equipment being in working order at settlement.
The content of this article is intended to provide a general guide to the subject matter and is not intended to be legal advice. Specialist advice should always be sought about your specific circumstances.