With properties getting snatched up within 24 hours, it is easy to get caught up in the emotions and hype when searching for your perfect property. These are the top five things you should know before you sign on the dotted line in Queensland.
Tip 1: Always get pre-signing advice from a solicitor
One of the most important parts of a conveyance begins before you sign a Contract of Sale. In Queensland, the real estate agent usually prepares the contract and gets you to sign as the buyer before submitting this to the Seller to sign. Before signing a Contract, it is essential that you have the Contract reviewed by your solicitor. Purchasing a property is a huge, and often overwhelming process, especially if this is your first home. Before entering into a Contract, it is extremely important to understand what you are signing and your strict contractual obligations. You could find yourself in breach and facing penalties potentially costing you a lot of money, if you are unable to meet all of your legal obligations under a Contract.
Though the standard QLD Contract of Sale contains a standard set of terms and conditions , in some cases the Contract may require additional special conditions permitting you to undertake additional property searches or subjecting the Contract to a prior sale where you will require funds from a sale of an existing property to complete the purchase (and sometimes in another state).
Did you know: Real estate agents are not qualified to provide legal advice on a Contract, draft or insert special conditions in a Contract or modify the pre-printed Contract in any way.
At Attwood Marshall Lawyers, our property lawyers will review the Contract and provide you with free pre-signing advice. This advice ensures the Contract details correctly reflect your offer; any special conditions you require are drafted correctly and reflect your best interests and it provides you with the opportunity to gain a complete understanding of your rights and the standard clauses or conditions in the Contract. That old saying rings true: Don’t sign anything until you get legal advice!
Although you have the right to terminate the contract within 5 business days after signing under the cooling off provisions (see Tip 3 below), you forfeit 0.25% OF THE PURCHASE PRICE if you do – to put this in context, if you sign up for a $650,000 purchase and terminate under the cooling off, it will cost you $1625! Another great reason to get some legal advice before you sign.
Tip 2: Always request a copy of the title search prior to signing a Contract
Title searches provide key details about a property. Conducting a title search prior to signing a contract will provide key information to you and you solicitor including the following:
- Registered Owners
A title will include the names of all the registered owners. It is important a Contract of Sale includes the correct details of all registered owners on Title as a Contract can become voidable if the details are incorrect and affect whether a party can carry out their obligations.
- Easements
An easement is a right given to another person who does not own the property, to use the property for a specific purpose. This may include service workers access to service electricity poles or a right of way access for a neighbour’s driveway. An easement can either benefit or burden the land and also restrict the use of the land. It’s important you’re aware of them before you buy as they can also prevent you from building on top or around the easement.
If you are unsure if an easement may affect you purchasing a property, contact Attwood Marshall Lawyers for advice.
- Mortgages
Any mortgages the seller has registered over the property will be noted on title. It’s important for the seller to discharge the mortgage before settlement or there may be significant delays.
- Caveats
A caveat is a legal notice lodged with the state land registry and is essentially a warning that another person or company has an interest in the property. If someone has a potential claim to part or all of a property, they may lodge a caveat over the property, preventing the owner from selling their property. If you are looking to purchase a property with a caveat on title, you should seek immediate advice from one of our experienced property lawyers to determine the best way to move forward.
- Covenants
Covenants are guidelines and/or restrictions on the land that can limit what can be built on it, where it can be built and from what materials it may be built. These rules must be adhered to when altering a property. Breaching a covenant can have serious consequences, so it is necessary to be aware of any covenants on a potential property.
Tip 3: You have the right to terminate the Contract within 5 business days after signing under the cooling off provisions
When purchasing a residential property in Queensland, unless you buy at auction, the standard Contract of Sale provides you with a five-business day cooling-off period, commencing on the date you or your solicitor receives the signed Contract. The cooling-off period grants you the right to terminate the Contract for any reason including changing your mind. You must provide written notice to seller, or their solicitor prior to 5pm on the 5th day of the cooling-off period if you wish to terminate the Contract. Upon receiving notice of your decision to terminate the Contract, the seller must refund the deposit to you within 14 days.
If you elect to terminate the Contract, the only setback you may face is the seller’s right to impose a financial penalty of 0.25% of the purchase price, usually taken from your deposit. This penalty is imposed at the discretion of the seller and they can elect to return the full deposit amount to you. If the seller elects to take a penalty of 0.25% of the purchase price, the balance of the deposit, less the penalty amount, must then be returned to you.
This five-day cooling-off period can be waived or shortened at your discretion and it does not apply where a property is purchased as part of an auction. If you have any questions about your rights during the cooling off period, make sure to speak with one of our property lawyers before your cooling off period expires.
Tip 4: Don’t forget to organise insurance after you sign!
Many buyers don’t realise after they have signed a QLD Contract of Sale, that they are now responsible for the property, even though they don’t own or reside in it yet and the contract is subject to finance and pest & building etc.
Clause 8.1 of the Contract provides:
“The property is at the buyer’s risk from 5.00 p.m. on the first business day after the Contract date“.
After you have signed a Purchase Contract, you will need to contact your insurance broker or arrange a cover note of insurance for the property immediately. In the event something happens to the property such as fire or flood damage, between the first business day after the Contract is dated and settlement date you may be liable for the damage to the property. In the event of loss, subject to any statutory provisions or contractual terms to the contrary, you will be bound to complete the Contract, notwithstanding the damage or destruction to the property. You are also not entitled to terminate the Contract or entitled to a reduction of the purchase price.
If you are purchasing the property with included fixtures or chattels, it is recommended you also take out content’s insurance. If you are purchasing vacant land, you will need to organise public liability insurance rather than building insurance.
Attwood Marshall Lawyers can provide a referral for the insurance you will need to protect yourself and your property. Just ask our friendly team!
Properties within a Body Corporate slightly differ as the building is usually insured by the body corporate. However, you should still take out content’s insurance for the internal fixtures and fittings if purchasing in a body corporate. It is always a good idea to confirm with the body corporate what insurance policies they hold. If you are unsure if the body corporate covers the insurance, we will be able to provide you with further information so that you can ensure you are protected.
Tip 5: Don’t feel pressured by the real estate agent to sign the contract
Buyers can be unaware of the selling tactics that agents may use to influence your decisions when buying a property and entering a legally binding agreement. Sometimes a buyer can overpay or make an unsuitable purchase choice due to the subtle pressure of agents. Real estate agents may unintentionally feed into a buyer’s fear of missing out by mentioning other potential offers or declaring that the seller won’t accept their offer if they want to put in certain terms and conditions.
A Contract is effective immediately upon signing by both parties, so it’s important you are completely satisfied with the Contract and special conditions before signing. Don’t be pressured into signing a Contract without taking the time to read through and understand the Contract and obtain trusted legal advice first.
How can Attwood Marshall Lawyers help?
If you have any doubts, Attwood Marshall Lawyers can help, we offer free pre-signing advice (Queensland contracts). Our Robina Town Centre office is also open Thursday nights and Saturday mornings for your convenience. If you have visited an open home on Saturday morning and need some advice, contact us!
Attwood Marshall Lawyers is an experienced electronic conveyancing firm. We are positioned right on the QLD-NSW border and with offices at Coolangatta and Kingscliff, our team can assist buyers with residential homes and investment properties in both states. We also have offices in Brisbane and the Robina Town Centre. Our experienced conveyancing team ensure new home buyers and property investors receive the most professional property law services when making their purchase. Our team will ensure a smooth and seamless property transaction, and that settlement happens on time.
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