Buying a Strata Property
Bob and Katherine are buying an inner city apartment, however they are unaware of all the obligations that come with buying strata title property – including the need to pay strata levies and comply with by-laws that dictate how the property can be used.
When budgeting for the purchase, the couple will also need to be mindful of any additional money that may be required for communal strata issues which can be expensive. These can include plumbing, roof and window repairs, and other general property maintenance.
By talking to a solicitor prior to the purchase, they would have had better picture of strata living. The solicitor can also advise them to obtain an inspection report on the strata records which would help them know whether there is likely to be enough money available to cover these additional costs – thus avoiding a blowout in the cost of their strata purchase.
Selling a Residential Property
Jim is selling a residential property. As the vendor, Jim has an obligation to comply with a number of vendor disclosure requirements which are stipulated under NSW legislation. If these requirements are not fulfilled the buyer can cancel the contract of sale and Jim will be required to return the deposit.
Unless the contract contains specific information that states otherwise, by putting the property on the market Jim is deemed to have made a number of promises about it. These include that the land is not subject to any ‘adverse affectation’ such as a government proposal that might affect the land.
Jim’s solicitor will walk him through the vendor disclosure requirements and obtain copies of all the documents that must be attached to the contract for sale to ensure that the sale can be completed smoothly This will be particularly important if Jim is relying on his sale to complete his new purchase.
Buying at Auction
Tom and Janice have been looking for a property to live in for some time and spotted one in the Saturday property section that ticked all the boxes. They decided to register as bidders and go along ‘just in case’ the property was within their budget. Despite not having inspected the property or the contract thoroughly, Tom placed a bid and ended up purchasing the property as the highest bidder.
Unfortunately, when the couple go over the contract for sale with their solicitor they discover that the property is currently tenanted and the sale is subject to the tenancy which has a further five months to run. However, due to the nature of sale of property by auction Tom and Janice are now locked into the purchase.
By asking a solicitor to go over the contract before the auction, Tom and Janice would have been made aware of tenancy. Any terms that were not in Tom and Janice’s favour could have been identified and requests made to the vendor’s solicitor seeking to have them changed. The solicitor could have ensured that the couple was aware of what they were buying and perhaps Tom and Janice may have chosen to keep looking for their new home.
Buying or selling residential property in NSW – Key Messages
These two free guides give consumers information on the process of buying and selling residential property in NSW:
- Your Guide to Selling a Home*: A checklist for selling a house or apartment in NSW includes topics such as preparing the contract for sale; what laws you will need to comply with as a seller; how the conveyancing process works; information about agent’s fees; how the ‘cooling off’ period works; and what happens at settlement.
- Your Guide to Buying a Home*: A checklist for buying a house or apartment in NSW includes the pros and cons of buying ‘off the plan’; the differences between an auction and private treaty; should you pay for inspections; Stamp Duty and other taxes; information about different types of ownership, such as strata title; and what happens at settlement.
* Free downloadable PDFs made available from the Law Society website.
The guides provide some clear guidelines for buying and selling residential property and the important role solicitors play in this process.
- Making a mistake or misunderstanding the legal requirements when buying or selling property can have a significant impact on your finances and lifestyle.
- It’s better (and often less expensive) to talk to a solicitor at the start of the process rather than when things have gone wrong.
- Buying or selling a home is often the biggest financial decision we’ll ever make, especially in a city like Sydney, where property prices can be astronomical.
- It is important that if you are thinking of buying or selling a property you should get in touch with a solicitor as soon as possible so that they can talk you through the process and advise you on how to proceed.