Two key documents that sellers must check are in order are the vendor's statement/Section 32 and the contract of sale.
The vendor's statement is a legal requirement which requires a vendor to provide certain mandatory information about the financial, legal and planning details of the property. Both the buyer and the seller must sign the vendor's statement before the contract of sale can be signed.
Make sure you obtain legal advice before you sign any document. For professional conveyancing advice contact our legal services partner Galilee Solicitors.
Vendor statements across Australia
The name of the vendor's statement may vary state by state. For example, in Victoria it is known as a Section 32 and in NSW it's a Contract of Sale.
Contact a solicitor or visit your state government website to confirm the legal documentation required when buying or selling property.
The seller usually gets the vendor’s statement completed by a solicitor or conveyancer.
The vendor’s statement must be made available to a potential purchaser for examination and advice before the contract of sale is signed. If you are being pressured to sign the contract of sale without the opportunity to examine the vendor’s statement you may be headed for trouble. Ask for the vendor’s statement up front and if you are being pressured seek legal advice.
Who holds the deposit?
The deposit is paid by the buyer to the seller once they have exchanged contracts at the time of sale. It effectively concludes the sale and then gives the buyer an interest in the property which can be protected by registering a caveat over the title.
If you are the buyer, you would make out a cheque for the amount of the deposit and give it to your solicitor. It is usually held by the vendor’s solicitor in a trust account until the settlement date. Interest on funds placed in trust is paid to the statutory insurance scheme designed to protect people against any trust account defaults.
The seller may ask the buyer to release the deposit money earlier than the settlement date which requires authorisation in the form of a statutory deposit release statement.
Get your solicitor to oversee these matters, and ensure all are legal and proper.
Overall, your legal representative's obligations are as follows:
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To ensure that the sale contract is in your best interests and that the sale is subject to the satisfactory completion of all necessary conveyancing, inspections and finance
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To fully explain the implications of the sale contract
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To make thorough inquiries of local council, water and motor authorities and other government bodies to ensure there are no easements over the property
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To conduct title searches to ensure that the land titles are clean: for example, that they are owned by who they say they are owned by and will carry no debt upon transfer
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To ensure any unacceptable caveats are withdrawn by settlement
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To ensure all rates and taxes are paid when the property is transferred to you
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To prepare documentation such as the Transfer of Land, Notice of Sale and Requisitions
Don’t authorise the release of deposit to the vendor until you are satisfied that you will secure clear title to the property at settlement and that the purchase price will be enough to clear any financial encumbrances (mortgages, unpaid rates and taxes etc) on the property. Your legal advisor will advise you on these matters during the conveyance process.
Buying