ROCKHAMPTON CONVEYANCING, PROPERTY & BUSINESS LAWYERS
RK Law provide advice and representation to those looking to buy or sell a business. We provide a range of assistance to businesses in Central Queensland, including fixed fee:
- Debt recovery;
- Contractual disputes;
- Human Resources & Employment Law;
- And more.
Call Rowan King (Principal Lawyer) on (07) 4922 0146 to discuss how RK Law can help your business.
RK Law are available 7 days a week. RK Law provide advice to anyone looking to buy or sell property between Rockhampton, Yeppoon, Blackwater, Gladstone and Brisbane. We also represent those with Property Law disputes.
Buying or selling property is stressful. The dates for compliance and the terms of the contract can be confusing. The real estate agents can be forceful when it comes to signing up on a weekend without independent advice.
Conveyancer Beverly Pinkham is available 7 days on 0434 388 832. Call Beverly before you sign the contract.
Fixed Fee Conveyancing for:
- Residential house sales/purchases;
- Residential unit sales/purchases;
- Land sales/purchases
- Commercial sales/purchases;
- Residential Leases
- Commercial Leases
RK Law Principal Lawyer – Rowan King, represents those with property law disputes, including:
- Residential/Commercial Lease Litigation
- Fence disputes
- Tree disputes
- breaches of sale/purchase contracts;
- and more.
Why lose another night’s sleep, call Rowan King (Principal Lawyer) on (07) 4922 0146.
Rockhampton Conveyancing & Property Lawyers RK Law will see to the transfer of ownership to you and make sure that you get a good title to the property. We will make or recommend all necessary enquiries about the property and generally advise you and look after your interests.
The following is a brief overview of points of interest.
The contract document regulates the transaction. In nearly all cases the contract used is one written by the Real Estate Institute of Queensland that even-handedly protects the interests of both parties.
Special conditions are usually added to the contract by the seller’s solicitor. These deal with issues that do not form part of, or reverse what is provided for, in the standard contract.
Call Rockhampton Conveyancing & Property Lawyers – RK Law if there are any questions about the contract
On signing a deposit is usually required and is held by the agent or seller’s solicitor as a stakeholder.
The amount of the deposit is negotiable. Traditionally 10% of the purchase price was asked, however, in recent times this now varies between the amount of $100 and 10% of the purchase price.
If it is a significant sum or if the settlement is well in the future then it may be invested and the interest earned shared. Normally this is not done as the amount is small and the administration expenses do not justify it. If this is to be done then we will need your tax file numbers to avoid the maximum rate of tax being deducted from the interest by the institution with whom it is invested.
As an alternative, a deposit bond can be bought at a cost of about 1% of the price. This is an insurance policy, which provides that if you default the seller can call upon the insurer to pay the deposit.
Call Rockhampton Conveyancing & Property Lawyers – RK Law if there are any questions about the deposit
Pest and building reports
You need to be sure that you are informed of and happy with the condition and state of repair of the buildings.
Hence the need for pest and building reports, which we strongly recommend.
Please tell us whether or not you wish us to arrange a building and pest inspection. In most cases, clients make their own arrangements. If we do arrange a report, we must stress that we in no way accept responsibility for the content of any report.
Whilst other clients have been happy with the work done by those we recommend we do not know whether or not such contractors are competent or otherwise. If you have any doubts then you must instruct a contractor directly.
Call Rockhampton Conveyancing & Property Lawyers – RK Law if there are any questions about Building and Pest inspections
Identifying the property
It is important that the property, the subject of the contract, is the one intended to be bought. This sounds obvious but in reality, buyers have been known to buy the wrong property. Care needs to be taken to identify the property for instance in a strip subdivision of featureless land when an agent can readily number the lots differently from the lot numbers in the deposited plan.
Surveys solve this problem. They are often not required but on occasions should be obtained. They also serve other purposes, which may be important in that they identify any encroachments by or upon the property and can certify whether buildings comply with covenants and restrictions as to use.
Call Rockhampton Conveyancing & Property Lawyers – RK Law if there are any questions about how to legally identify the property.
Inclusions and exclusions
Fixtures are part of the land so that items such as built-in pantries are included without further mention. Please check the inclusions and exclusions shown on the contract and let us know if the lists are deficient in any way.
Call Rockhampton Conveyancing & Property Lawyers – RK Law if you want to include and item in the contract.
Statutory warranties for residential property
Under the Queensland Building Services Authority Act some protection is afforded to buyers of residential property in relation to structural faults in new homes that appear within 6½ years of construction. The original or any subsequent owner can bring the action. If the builder has either disappeared, died or is insolvent then an action lies against the Queensland Building Services Authority who will appoint another builder to undertake necessary works under the compulsory warranty insurance.
However, we suggest that there is little comfort to be found in a right to sue for breach of warranty and it is best to thoroughly check the property and get pest and building reports before contracting.
There are many more considerations with rural property that need discussion such as share farming or agistment agreements, pipelines, soil conservation or timber harvesting, water licences or rights, access roads or tracks, enclosure permits, stock diseases, chemical pollution or noxious weeds, Native Title, Aboriginal Land Rights, threatened species, native vegetation conservation, National Parks and Wildlife, and Crown leases.
Land in a community title scheme (CTS) is divided into lots and common property. A lot is comprised of the cubic space delineated by the inner surfaces of the walls, ceilings and floor. The walls, ceilings and the floor which are the boundaries of the lot, and the rest of the building and all other improvements, and the land, form the common property which vests in the body corporate. Title to a lot in a strata scheme confers legal title to the lot and an interest in the common property as a tenant in common with the other lot owners. You can sell, mortgage, lease or otherwise deal with your lot as you wish.
You automatically become a member of the body corporate on settlement and you are bound by its by-laws regulating such matters as the keeping of animals.
The body corporate establishes an administrative fund, to pay regular outgoings and ongoing maintenance, and a sinking fund, to provide for long-term work such as repainting. Your contribution to these funds is determined by the unit entitlement of your lot, as is the value of your vote at meetings and your interest as a tenant in common in the common property. Unit entitlements are calculated on the value of each lot on completion of construction. The total of all lot entitlements becomes the aggregate and each lot is part of that aggregate. So a more expensive penthouse will contribute more to the funds, have a greater voting power, and have a greater interest in the common property than a ground floor bed-sitter.
You cannot alter your lot without the consent of the body corporate.
Call Rockhampton Conveyancing & Property Lawyers – RK Law if there are any questions about buying a unit
The adjoining property owners who must contribute equally to their repair maintenance and replacement usually own the fences built on the boundaries.
If a main runs through the property then the responsible authority has a statutory right to have it there and a right and obligation to maintain it. They can enter for this purpose. They can refuse consent to build over the line or impose conditions if there is no alternative. All services running through adjoining privately owned land need easements over that adjoining land to ensure their continuance. If the property is not sewered then ensure that any septic system is situated within the property boundaries.
If the purchase is of vacant land then ensure that the council will allow the sewerage system proposed, as this is a significant issue in relation to areas for absorption and nearby creeks. It is also important to plan for the disposal of stormwater, which cannot be into the sewer and cannot be across neighbouring land without an easement.
If there is doubt as to the soil conditions the builder or council may well require a geotechnical report to be carried out for the purpose of the design of the subfloor of any building to be constructed on the vacant land. This can be expensive if the soil is particularly unstable.
Frequently the subject of the sale is a lot or unit that is yet to be subdivided or built, and completion of the purchase is subject to this taking place. A plan of the proposed subdivision is attached to the contract and provisions included that the seller will diligently do the things necessary to complete the works and have it registered.
The contract usually allows up to 18 months sunset time for the seller to complete the subdivision and register the plan, failing which either party can walk away. Completion cannot take place until the title for the lot issues following registration. In a normal market, both the seller and buyer want completion to take place within the sunset period. However, if the market turns for the worse and property values drop a buyer may well want to get out of the contract as the price is now too high. If the market surges forward than the seller may want to delay past the sunset period so that the property can be sold to another buyer for a better price. An insoluble problem, so the best that can be done is to agree to a sensible time frame.
With new lots in a subdivision, it is important to ensure that all services that you expect are to be provided to the lot normally water, gas, electricity, telephone and sewerage.
With new units or houses, the important matters are the layout and position of the dwelling and the fixtures, fittings and finishes being installed.
Funds coming from sale
Frequently buyers move from one house to another and rely upon the proceeds of their sale to pay for the purchase. It needs to be borne in mind that if the sale falls through then there will be no funds to complete the purchase. In theory one default balances the other and the loss of the deposit on the purchase is offset by the keeping of the deposit on the sale. In practice, this is not necessarily the case particularly as in both cases actions lie for damages as well as loss of the deposit. If possible having an alternative arranged, such as bridging finance to enable completion of the purchase whilst reselling, is preferable.
Arguments occur fairly frequently as to the condition of the property when the buyer takes possession. Usually, just prior to completion the buyer makes a final inspection. However, completion cannot be delayed for minor matters of tidiness or cleanliness. For any remedy to be available the condition of the property would have to either prevent the buyer from being able to use it or it would have to have changed the property significantly.
Sometimes buyers move into premises before completion. It is not wise to spend much on improving the property before completion as if for any reason completion doesn’t eventuate then the cost of the improvements cannot be recovered from the seller.
The seller pays the rates until the day of completion after which the buyer pays them. Usually either the rates for the current rating period are paid or a cheque is drawn out of the seller’s money at settlement to pay them. As an adjustment at settlement, the buyer then pays the seller that part of the rates for the quarter that apply for the period following settlement.
If the settlement does not occur on the date agreed then a process begins of enforcing the contract. This might see a small delay or in the worst case scenario end in litigation taking months or years to resolve. Fortunately, it is an infrequent occurrence, but it has to be understood that there are no contract police who force defaulting parties to comply with the contract. Default ultimately results in slow and expensive court cases to be avoided at all costs.
The result of default by a buyer is a termination by the seller who then is entitled to keep the deposit and sue for the shortfall if any between the price at which the property was sold and the price achieved in a subsequent sale. As stated above, unless a negotiated compromise is reached, this can involve costly litigation.
If the property is not to be your principal place of residence then on resale there will be a taxable profit or deductible loss either under normal income tax rules or under the capital gains tax rules. If you are a developer then the sale will probably produce a tax result under the usual rules relating to income.
If you are not a developer the only matter to be decided at the time of purchase is the entity through which to buy. The main provision to bear in mind is that the 50% discount on capital gains does not apply to companies.
Nevertheless there may be losses in a company to offset or other good reasons to use a company. GST does not apply to residential property unless new or vacant land. It does apply to commercial and industrial property. There are a number of possibilities that might apply to the purchase. You should seek an accountant’s advice about the GST implications of the sale.
Capital gains withholding payments
Where the sale price is $2 million or more then the foreign resident capital gains withholding payments provisions of the Taxation Administration Act 1953 apply from 1 July 2016. If the provisions apply to this transaction we will need to discuss this with you further. The seller must establish that they are not a foreign resident failing which the buyer must remit up to 10% of the sale price to the Australian Taxation Office.
Transfer (stamp) duty is payable on the transfer of property and can be a significant expense when buying a property. The rates of duty vary according to the value of the property conveyed, the price paid for it, and whether the buyer/s are first home buyers, whether they will occupy the property as their principal place of residence, or whether the property is to be used as an investment. The rates and rules surrounding eligibility for exemptions are also constantly changing.
Stamp duty on mortgages was abolished as of 1 July 2008.
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