Cooling Off and Exchange
If a purchaser signed a contract seven days ago and the agent took the Contract away to have the vendor sign but has not been back in contact …..can the purchaser cool off?
The purchasers right to cool off is lost three working days after the purchaser signs, irrespective of whether the vendor has signed.
It has been held that if the purchaser’s offer is not accepted and the vendor submits a counter offer, then the purchaser has another three working days after confirming the counter offer.
Can a Purchaser avoid the Contract if they, before settlement, discover that the property has a number of defects such as defective drainage and cracked walls?
No, the principle of Caveat Emptor still applies and a purchaser should complete enquiries prior to the signing of the Contract.
A purchaser has conducted an inspection of the property prior to settlement and has discovered that the Vendor has removed the curtains, which were included in the contract. Settlement is today; can the Purchaser deduct the estimated cost of replacement from settlement monies?
The Vendor carries the risk of loss or damage to the property until settlement and must deliver the property to the Purchaser at settlement in the same condition as it was in at the day of sale expect for fair wear and tear.
The Purchaser must not delay settlement because one or more of the goods is not in the same condition when inspected on the day of sale.
The purchaser may however nominate an amount not exceeding $5,000.00 to be held by a stakeholder to be appointed by the parties. The nominated amount may be deducted from the amount due to the Vendor at settlement and paid to the stakeholder but only if the Purchaser also pays an amount equal to the nominated amount to the stakeholder.
During the course of the Contract the vendor asks the purchaser to settle one week early. The purchaser agreed to this request and an appointment to settle on the early date was made. At the last moment the Purchaser was unable to settle on the earlier date but was able to settle prior to the original date fixed for settlement. Is the purchaser obliged to pay penalty?
Yes, where an earlier or later date is agreed between the parties and confirmed, either in writing or orally, then the date becomes the settlement date and failure to settle on that date constitutes a breach of the contract.
The purchasers made enquiries of the local council after signing the Contract and it has been revealed that the Vendor has not obtained a permit for the pergola constructed to the rear of the property. Can the purchaser avoid the Contract?
No, in the absence of a Notice served prior to the Contract, the purchaser may not avoid. Any Notice served after the date of the Contract will be the purchasers responsibility.
Settlement – Time and Place
Where should settlement take place and at what time?
Settlement is effected where the Title is held. The Vendor may nominate the location of settlement and a time for settlement is mutually agreed between the parties.
This would need to take into consideration, some reasonableness as to the availability of the outgoing and incoming lenders for all parties to be present at the same time where the Title is being held.
Swimming Pool Fences
The Vendor has not fenced the swimming pool. Does the purchaser have any rights?
The fact that the vendor has not complied with these regulations does not improve the purchasers position. The vendor may be liable for a fine but this is just like any other illegal structure situation and the purchaser is not entitled to require the vendor to comply with the regulations prior to settlement.
The purchaser should fence the pool within 30 days of settlement or the purchaser will be in breach of the regulations
Identity of the Land
Should the Purchaser check the location and dimensions of the property?
It would be more prudent for all purchasers to check the dimensions and location of the property prior to signing the contract. An omission or mistake in the description. measurements or area of the land does not invalidate the sale.
The Purchaser may not; a. Make an objection or claim for compensation for any alleged mis-description of the property or any deficiency in its area or measurements or b. requre the Vendor to amend Title or pay any costs of amending the Title.
What should a purchaser do about Insurance?
As from the signing of the Contract a purchaser has an insurable interest in the property and should arrange for immediate cover on all improvements once the Contract becomes unconditional. Whilst the Vendor has a legal obligation to have the property insured at the time of the Sale, the property remains at the risk of the Vendor until final settlement is effected.
Purchasers should note that if a lender is involved that the lender will require a Certificate of Currency of Insurance noting the lenders interests thereon before they will advance monies for settlement.
Inspection of the Property prior to final settlement
What rights do purchasers have to inspect?
The contract provides that a purchaser has the right to inspect the condition of the property and the chattels at any reasonable time during the period of seven days prior to the settlement date.
The Purchasers should exercise this right and at the time of the inspection, make arrangements with the Vendors for collection of the keys on the settlement date.
It is normal practice for all keys to the property to be left at the Real Estate Agents for collection by the purchaser after settlement has been effected, however if the Vendor has retrieved the key from the Real Estate Agent once the sale has been effected, you will need to ensure that a key is available to you when settlement has been confirmed.
My loan is not approved and the finance approval date in the contract is due now, what can I do?
You must contact us immediately. Our team will ask the vendor for an extension of the finance approval date. This is not an uncommon request and is usually granted. You do not have to do anything – we will do it all for you.
If you need a further extension of finance approval, please contact us and we will put in another request on your behalf. This is where it is very important that you communicate with us. If we are not kept informed, your Contract is at risk of becoming UNCONDITIONAL.
If your Contract becomes unconditional, you are bound by all terms of the Contract and you must complete the Contract, notwithstanding you do not have finance! Beware and Be Aware!
Paying the Deposit
The agent is asking for the deposit and my finance has not been approved yet, what do I do?
You must pay your deposit on the due date or any extended date allowed by the vendor. If you do not pay the deposit you are in breach of the terms of the contract.
We could obtain an extension of the finance date together with an extension of the payment of deposit on your behalf. You would need to contact us immediately.
Purchasers Contribution at Settlement
When, as a Purchaser, will I know how much I have to pay at settlement?
It would be ideal to know the final figures you require for settlement a few weeks prior to settlement.
Unfortunately, this is usually not possible because the vendor relies on the advices of his Lender.
The vendor has the right to direct payment due to them at settlement in any way they wish. If they ask for more than three bank cheques, we can deduct a fee from them for every additional cheque they may require you to draw for settlement.
If your Lender is advancing all funds, it is simple then for ask to provide them with the final cheque direction by the vendor which alleviates the need for you to send/attend our office to provide your contribution.
If the Lender is only advancing some of the monies, you will need to draw the balance. We will advise you how much and to whom, once we are directed by the vendor.
Who pays GST on property transactions?
GST is a tax on the supply of goods and services. In property transactions, it is the seller of real estate that may be obliged to remit GST. Often a Contract passes the GST payment obligation to the purchaser.
However not all supplies attract GST. A number of criteria must be satisfied before GST becomes payable. Some transactions may also be GST free.
Transactions involving GST issues should be negotiated with care to ensure there is clarity on whether GST is applicable and who is obliged to pay the GST.
The question of whether you are responsible for GST should be resolved prior to any Contract of Sale be entered into.
First Home Owner Grant
I am a First Home Buyer. Do I get any assistance from the government?
You may be eligible for the First Home Owner Grant scheme.
To check the eligibility requirements for Victoria, please visit the Victorian State Revenue Office website.
What is State Land Tax?
Land Tax is a tax levied on the ownership of land in Victoria owned as at mid-night on the 31st December of each year. It includes vacant land, dwellings, flats, holiday homes, and commercial properties and is based on value.
Your principal place of residence or land used for primary production is normally exempt from land tax.