Just Us News

BY REMY FORSTER

When it comes to selling or buying property, the settlement date is what everyone looks forward to. Sellers get to pay out their mortgage, dream of what they will spend their extra money on and the excitement of what they will be moving onto next, and buyers get to move into their dream property, or begin a new investment opportunity that will hopefully do well for them in the future.

It’s pretty standard practice when you’re buying or selling a residential property that the settlement date will be along the lines of “on or before 30 days from the contract date.” In Queensland, this is the most standard thing to see on a contract mostly because 30 day settlements have become the norm – but 30 days is not always enough time for the Seller and Buyer to be ready to settle, and it is important to know when you are signing a contract if you are in the position to need a longer settlement period than most.

As a Seller, there are a few main reasons that you may need a longer settlement than 30 days:

1. If the mortgage on the house you are selling is linked to a business loan or other property loans, some lenders require a full 20 business days to be ready for settlement. This is definitely not most lenders, but it is best for you to check with your lender if they will need this long.

2. If you are experiencing financial hardship and have fallen behind on your mortgage repayments, or are in arrears. The process lenders have to go through when you are selling a property in these circumstances is much more complicated than a normal mortgage discharge, and most Sellers in this position end up requiring an extension of the settlement date when they only have 30 days.

3. If you have an original Certificate of Title (a physical title deed) for the property but cannot locate the Title. Original Titles are required for settlement if they exist, and the process for having the Title cancelled can take up to two or three months, and possibly longer depending on how the Title was misplaced.

4. If you need to find another property to purchase, and want them to settle on the same date. You will usually need 30 days from the time you find another property to buy to be able to settle on that property, so unless you find a property immediately you won’t have enough time.

5. If you will be going on holidays either overseas, or to a place where you won’t be contactable (eg. if you are a FIFO worker) for most of the 30 days. There are important documents you have to sign as a Seller that your solicitor will need the originals of, and these are hard to do if you will be overseas or in a regional location.

6. If you are currently engaged in a dispute with a third party who has lodged a caveat on the property. As a Seller, you are required to be able to remove any mortgages, caveats or notices on the title and disputes over caveats can last a very long time.

7. If you are selling the property as personal representative, or on behalf of an estate, due to someone’s passing. When someone passes, their name has to be removed from the title to any property they own before you can have settlement – this process is simple in most cases, but it’s best to check with your estate lawyer how long they need to have this process completed.

Of course, yourself and the Buyer can agree on whichever settlement date is best for the both of you no matter the circumstances! For some, longer settlement periods are preferable so that they don’t have to rush through the 30 day process and some ‘cash’ contracts (where the Buyer is not borrowing any money) can have settlements as short as 14 days. In some cases it may also be easier for you to write a specific date on the contract rather than have a period of time – for example, you may know that you want settlement to happen on 2 June 2016 because you are moving overseas on 9 June 2016.

If you’re unsure about how long you will need for settlement, it is always best to have chat to your solicitor about the circumstances of the sale before you sign a contract to sell so they can assist you in choosing a date.

Below is a checklist of tips to assist you with purchasing at an Auction:-

Do your homework

• Prior to the auction the first step is to talk to Just Us Lawyers regarding pre-contract advice. Our experienced team of Conveyancers and Solicitors will be able to advise you of the contents of the draft Contract.
• Investigate and undertake as many property searches which you think would be relevant for the property. Searches to consider would be Council Building Approvals, Qld Building and Construction Commission, Flood Enquiry, Main Roads, Planning and Development, QCAT Tree Register, Transport Noise Corridor and Contaminated Land just to name a few.
• Organise a building and pest inspection with a licensed building and pest inspector to check that the property is structurally sound and is free of termites.
• Be sure to attend the property viewing prior to the auction and compare the property against similar ones in the surrounding area.
• Express your interest to the agent if you are prepared to bid on the property and request to be notified of any offers made prior to the auction.
• Before the auction it is important that you establish a bidding limit for yourself. You should consult your banker or mortgage broker prior to attending the auction to discuss your financial situation. It is important that you do not get carried away on the day and bid beyond your means.

With this forward-planning and assistance from the Conveyancing team at Just Us Lawyers you’ll be well on your way to success at your next auction.

There are many pitfalls in conveyancing and a lot of these can be avoided by getting pre-contract advice before signing your Contract.

It is important that you know that you are entitled to pre-contract advice before signing the Contract whether you are a buyer or a seller.

Your conveyancer/solicitor will go through the Contract to make sure all bases are covered and especially for your particular circumstance.

Listed below are a few things to think about when putting in or accepting the Contract offer:-

1. The deposit, how is this to be paid by cash or bank guarantee? When is it payable?

2. Is the Contract being purchased in the correct entity (this is especially important where finance is being advanced or it is through a self- managed superannuation fund).

3. Is the property tenanted? Does the buyer need vacant possession?

4. Included or excluded fixtures and chattels do these need to be stated on the Contract?

5. Special Conditions – ensure that conditions are practical i.e. dates to fall before settlement. It must also specify who is to comply with condition meaning the Buyer or Seller?  For example who is to organise the Body Corporate approval of pet?

6. Does the property have new structures which would need Council Approval?

7. Amending or terminating the Contract. Remember that a fully executed Contract is a binding agreement.  Changes must be made either by written correspondence or by formal agreement. Consult a Solicitor further regarding this.

8. Should it be made subject to the sale of an existing property which you may be relying on funds for to complete this new purchase?

In our experience a lot settlements fall over or are delayed because not enough thought is given to these types of matters at the beginning of the process.  Our responsibility is to help you avoid the pitfalls and we would be only too pleased to help you.

There is often misunderstanding in relation to what a caveat actually is and what a caveat does.   This blog answers all the questions commonly asked by clients in relation to caveats.

1. What is a caveat?

A caveat is a notice to the Registrar of Titles (at the Department of Natural Resources and Mines) and which, subject to some exceptions, has the effect of prohibiting the registration of a land interest dealing (unless that dealing is expressly permitted by the caveat) affecting the interest claimed by the caveator until the caveat is withdrawn, removed, lapses or is cancelled.

A purpose of a caveat may be to allow time for parties to apply to the court to enforce or determine an interest in land. Alternatively, the purpose may be to alert a third party as to the interest claimed.

A caveat is commonly used in the breakdown of relationships so that one party can preserve their interest in a property which may be in the name of the other party, but where both parties had made contributions to the property and the relationship.

A caveat must include (among other things):

• The name and address of the caveator (the person who lodges the caveat);
• The name and address of the caveatee (the registered owner) and any other party having an interest in the property (for example, any mortgagee);
• The interest claimed by the caveator; and
• The grounds on which the interest is claimed.

The caveat must be signed by the caveator or on or behalf of the caveator by the caveator’s solicitor.

Because of the significance and impact a caveat may have, we require all caveats to be signed by the client (the caveator).

2. Who may lodge a caveat?

 There are a number of persons who may lodge a caveat, including a person claiming an interest in a lot to be transferred or a person who has the benefit of an order of an Australian court restraining the registered proprietor from dealing with the property/Lot.

3. What is an interest?

 An interest means:

• A legal or equitable estate in land or other property; or
• A right, power or privilege over, or in relation to land or other property.

4. What are the grounds to claim an interest in a property?

In order to establish that you have a caveatable interest over the property, a caveator needs to show that they have sufficient interest over the property. This may be in the form of an equitable mortgage (for example, when a parties’ relationship breaks down) or that they are the buyer of the property where settlement is not to be effected for some time or where proceedings are on foot and the registered owner is attempting to sell the property. These are just some examples.

5. Liability for Lodgment of a Caveat

A person who lodges or continues a caveat without reasonable cause must compensate anyone who suffers loss or damage as a result. It is therefore essential that a caveat be lodged if there is a cavetable interest and the caveat is lodged with reasonable cause.

6. Who receives notice of the caveat?

The Registrar must give written notice of the caveat to all persons whose interest, or whose right to registration of a dealing on title, is affected by the caveat. This includes (for example), the registered owner of the property and any mortgagee which has a mortgage over the property.

7. How is a caveat withdrawn?

A caveat may be withdrawn at the caveator’s request at any time. A request to withdraw a caveat document must be signed and lodged with the Registrar.

A caveat which has been lodged without the consent of the registered owner will lapse within 3 months if the caveator does not initiate court proceedings to enforce their rights.

8. Lapsing of a caveat

The registered owner may serve a notice requiring the caveator to initiate court proceedings to establish the interest claimed in the land within 14 days of receipt of the notice. The registered owner must also notify the Registrar of Titles that such a notice has been issued.

If the caveator receives such a notice, the caveator must do two things to stop the caveat lapsing:

• Initiate proceedings in a court of competent jurisdiction to establish the interest claimed under the caveat within 14 days of notice being served; and

• Notify the Registrar within 14 days that proceedings have been started and identify the proceedings.

If the caveator does not comply with both requirements above, the caveat lapses.

If the registered owner does not serve a notice under section 126(3) of the Land Title Act, as described above, on the caveator, the caveator must still take action to stop the caveat lapsing by:

• Initiate proceedings in a court of competent jurisdiction to establish the interest claimed under the caveat within 3 months of the lodgment of the caveat; and

• Notify the Registrar within 13 months that proceedings have been started.

If the caveator does not comply with both requirements, the caveat lapses.

9. What proceedings must be commenced?

Proceedings must be commenced in a court of competent jurisdiction to establish the interest claimed under the caveat.

10. How is a caveat removed?

The registered owner may apply to the Supreme Court for an order for removal of the caveat. The Supreme Court may make an order determining whether or not the caveator has been served with the application and may make the order on terms it considers appropriate.

11. Injunction supporting caveat

If you are seeking to restrain dealings in a property, one option is to seek an interim injunction in the Supreme Court of Australia, restraining dealings with the property. A copy of the injunction can then be lodged with the caveat to support the caveat.

With an injunction supporting the caveat, the caveat will not lapse.

12. How is a caveat cancelled?

The Registrar may cancel a caveat on receipt of a Form 14 General Request if:

• The interest claimed by the caveator has ceased or the claim has lapsed, been abandoned or withdrawn;

• The claim has been settled or satisfied; or

• The nature of the interest claimed does not entitle the caveator to prevent registration of an instrument that has been lodged.

The Registrar must give 7 days’ notice to the caveator before cancelling the caveat.

13. Can a second caveat be lodged? 

A person may not lodge a further caveat for the same property on the same or substantially the same grounds as the first caveat without permission from a court of competent jurisdiction.

If you are thinking of lodging a caveat over a property, please contact us and we can advise as to whether or not you have sufficient grounds to establish a caveatable interest in the subject property.

Before purchasing a new home or investment property we strongly recommended that buyers undertake building and pest inspections to ensure that there are no costly hidden problems with a property.

In Queensland it is standard for contracts of sale to include a building and pest condition. This allows buyers to engage qualified building and pest inspectors to attend the property and provide written reports.

Buyers must decide whether they are satisfied with the reports and provide notice to the seller by 5:00pm on building and pest inspection date.  If the buyer is not satisfied with the reports obtained they may have the option to terminate the contract.

It is crucial that both parties are mindful of this deadline. The seller will also have the right to terminate the contract if the buyer has not given notice on time under this condition.

So what should you do if you are concerned about the results of the inspection reports?

The reports should reveal any potential issues with the property, which may range from small defects to major structural issues. If you have concerns about the property it is best to discuss these with your building inspector first and then consult your solicitor.

Buyers should be aware that sellers are not obliged to fix all issues raised by the building or pest inspector and not every issue will automatically give buyers a right to terminate the contract.

In order to terminate under the building and pest condition buyers must act reasonably. Whether or not it is reasonable to terminate the contract will depend on a variety of factors, such as the age of the property and if the issue was obvious when the contract price was negotiated. Major structural issues or severe termite infestation are examples where it would be reasonable to terminate.

If you do not wish to terminate the contract, the building and pest reports can be a useful tool to negotiate with the seller for a reduced purchase price or to ask for defects to be remedied prior to settlement.  Any negotiations with the seller must be agreed in writing before the building and pest condition expires.

Here are some simple tips to ensure that you get the best outcome under the building and pest condition:

1. Make sure that you arrange the inspections well before the due date to allow time for the inspector to prepare the reports as well as time for any negotiations to take place.
2. Be present at the property while the inspections are carried out. This way the inspector can point out any potential issues and provide you with more background information than what will be included in the report.
3. Keep your solicitor informed and provide plenty of notice if you wish them to undertake negotiations with the seller on your behalf. This ensures that you do not miss any deadlines.

For more information please contact the friendly team at Just Us Lawyers on 07 3369 7145.

Are you prepared for when the time comes when you’re no longer able to make decisions for yourself?

The best way to provide peace of mind is to legally appoint a trusted person – or people – NOW to manage your financial, personal and health matters in case in the future, you are unable to do so yourself.
Our team is here to assist you with preparing your Enduring Power of Attorney.

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