By Remy Forster
The most stressful part of selling a property is generally considered to be the steps taken prior to a contract being signed – constant open homes, receiving (and rejecting) unreasonable offers, staging a house and negotiating with tenants are all common aggravations. Unfortunately the work of selling a property doesn’t stop there, and it is usual for a step or two to be missed in the process of preparing for a property settlement once the stress of finding a Buyer has been alleviated. Below we outline the major items to prepare for as a Seller to help you get your property settlement completed on time.
1. Make sure you can sell the property.
Not all Sellers are disposing of property that they legally own. If you are selling a property on behalf of someone else, or if you will be acting on their behalf for a part of the conveyance due to their absence, it is vital that you have the correct documentation in place for the settlement to be completed. For example:
- If you have changed your name since you purchased the property, you will need to be able to provide evidence that you are the same person (for example a marriage certificate or change of name certificate),
- If you are assisting a partner or spouse in selling a property, your legal representative should not be able to accept your instructions on their behalf without a signed authority (such as a Power of Attorney),
- If you are selling the property on behalf of a family member, partner or spouse and you intend to execute all associated documentation on their behalf, you will need a registered Power of Attorney (for further guidance on this, see our blog on registering a Power of Attorney), or
- If you are selling the property on behalf of a deceased estate, you will need evidence that the estate is being administered and/or has been registered. The title to the property will also need to be transferred out of the name of the deceased and into the name of the personal representative before settlement documentation can be executed.
If you are unsure as to whether you have sufficient documentation, or if you have the legal ability to sell a property, we would recommend that you contact your legal representative prior to executing any sale contracts.
2. Release your property debts.
In order to sell your property, you will need to be able to release any debts held over the property title. Most sellers will only have a mortgage over the property title, and having this debt released requires you to contact the financial institution which holds the mortgage (for further guidance on this, see our blog on tips for discharging a mortgage). However, if you have any other debts over the property, such as a writ or caveat, you will also need to contact the parties who hold these debts to arrange the debts to be released. If you have a debt over the property to a less formal party (for example, a mortgage over the property which has been lodged by a family member), you will still need to contact that party for them to arrange releasing their debt over the property.
3. Obtain a Capital Gains Clearance Certificate
Due to recent legislative changes, certain property settlements require the Sellers to provide evidence from the Government that the Buyers are not required to withhold a portion of the purchase price. This evidence is provided by the Government in the form of a “Capital Gains Clearance Certificate” upon application by the Seller. We recommend that all Sellers verify if their property falls within the requirements for this Certificate to be provided (for further guidance on this, see our blog on Capital Gains Clearance Certificates) and apply for the Certificate once their property is listed for sale. Certificates are valid for twelve months when issued, and a new application can be submitted if the Certificate expires prior to the property settlement occurring (applications can be made online).
4. Have your identity documents ready
It is a requirement in Queensland for all legal representatives to verify the identity of their clients in conveyancing transactions. For sales this is especially important to ensure someone is not fraudulently selling a property they do not own, or do not have right to. This requirement means your legal representative should ask for a certified copy of 100 points of identity documentation, or for you to complete a Verification of Identity with a verification provider (for example, Australia Post). The most common documents which you can use to verify your identity are your current Australian passport, current Australian Driver’s license and any change of name or marriage certificates which show your name has changed since your passport and/or driver’s license were issued (if you don’t have these documents available, please see Schedule 8 of the Participation Rules which list a table of the possible documents you can provide). If you cannot provide sufficient documents to prove your identity, your legal representative may not be able to act on your behalf in the transaction.
5. Check if you will be available during the transaction.
In the mysterious ways of the universe, it is common for the perfect Buyer for your property to come along when you already have a trip or other adventures planned. It is always important when signing a contract that you make sure you will be available for at least a portion of the transaction, and that you advise your legal representative if you will not be available for the entire time. During a conveyancing transaction there will be additional documents for you to sign as the transaction progresses, and most likely instances where your legal representative will need to contact you for your instructions. If you are unable to complete these steps, it will make it difficult for your settlement to be completed on time.
6. Disclose, disclose, disclose.
Standard conveyancing transactions require Sellers to disclose certain information about the property to any potential Buyers, and these disclosures need to be reflected on the Contract the parties sign. For example, a Seller is required to disclose to the Buyer:
- If they have conducted work on the property under an Owner Builder License,
- If there are any work notices issued by the local council for the property,
- If there are any tree disputes registered with QCAT that involve the property, or
- If there are any defects or circumstances relating to the Body Corporate which would materially prejudice a Buyer.
If the Seller does not disclose this information, the Buyers may be able to either terminate the Contract or pursue the Seller for costs. We recommend that Sellers gather any information about the property that they have in preparation to disclose this information to the Buyers.
7. Gather your settlement documents
If you’re selling a residential home, you may not have any documents to gather or collect. Below is a list of documents which affect some property sales and we recommend that you peruse to see if they apply:
- Certificate of Title – some Sellers have an original Certificate of Title for their property. These Certificates were only originally issued prior to the 1990’s, and since then have only been issued upon request by the party who owns the property. You can check if you have a Certificate of Title by viewing a copy of a Title Search for your property (which your real estate agent should have ordered as part of preparing the contract of sale).
- Tenancy documents – if the property has tenants and you have copies of rental agreements, rental ledgers or bond forms, you will need to provide these to your legal representative prior to settlement. If you have a property manager, they may hold these documents for you.
- Building finals – if you have conducted any work on the property since you purchased it, you may have copies of final inspection certificates for this building work. It is not a legal requirement in Queensland for you to provide these to the Buyer (unless there is a special condition in your contract requiring this), but having these on hand can smooth over issues which arise during the conveyancing process.
- Rates, water and body corporate notices – the Buyers are supposed to conduct searches on these accounts during the conveyancing process, however if they do not, having copies of these notices will assist your legal representative in preparing for settlement.
Finally, you will need to make sure you have collected all keys, remotes and access cards that you hold for the property for these to be handed to the Buyer following settlement.
If you have any queries about the conveyancing process, or generally about what to do when selling a property, please contact our Conveyancing team.