Selling a property is an exciting time. Following a few steps will ensure the best result.
Part 1 covers the correct legal documentation you need. Part 2 gives you tips to make sure your home looks its best when you open the doors to potential buyers.
In all Australian states and territories the process of selling and buying property is regulated by legislation.
While the specific details differ, the common requirement is that vendors prepare a series of legal documents which require certain mandatory disclosures, representations and warranties.
This is to let potential buyers do due diligence on the land and any improvements. Let’s call these documents the Vendor’s Statement.
It’s critical that the Vendor’s Statement is prepared in accordance with the relevant legal requirements and that it contains all the required information. If the Vendor’s Statement is not correctly prepared, a purchaser will have different rights depending on where the property is. In some instances if the Vendor’s Statement is defective a purchaser has the option of walking away from the sale altogether.
The other important document is the Contract of Sale (which usually incorporates the Vendor’s Statement into its terms and conditions). The Contract of Sale captures all of the agreements between the vendor and the purchaser.
These terms include:
- The identity of the vendor and the purchaser
- The address of the property
- The title details
- The price
- The agreed deposit
- The length of the settlement period
- Any fixtures or fittings being sold with the property
- Any special conditions such as whether the sale is subject to the purchaser obtaining finance approval by a certain date
- Any other special conditions that the parties agree to
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 write a cheque for the deposit amount and give it to your solicitor. It is usually held by the vendor’s solicitor in a trust account until the settlement date. The trust account purely a holding deposit for the purchase of the property for sale. Interest on funds placed in trust are 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 solicitor’s obligations are:
- 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
- To fully explain the implications of the Sale Contract
- To make thorough inquiries of local council, water and motor authorities and other government bodies to ensure there are no easements over the property
- 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
- To ensure any unacceptable caveats are withdrawn by settlement
- To ensure all rates and taxes are paid when the property is transferred to you
- To prepare documentation such as the Transfer of Land, Notice of Sale and Requisitions
The Contract of Sale also may be subject to different state property legislation so it is essential to get the right legal advice on preparation of both the Vendor’s Statement and the Contract of Sale.
Get legal advice before you sign anything. For professional conveyancing advice throughout Australia, contact our legal services partner Galilee Solicitors.
- When you sell or purchase a property, you will need to transfer large sums of money, sign a contract of sale and check that the Vendor’s Statement and other documentation is accurate and correct. It pays to have expert help.