Commonly, buying and selling property will be one of the biggest events in an individuals’ life. Whether you are a first-time buyer/seller or seasoned property developer, there are a number of questions that are frequently asked either prior to signing the final documents or during the settlement process. Below is a list of some of those questions (noting that each example may differ from property to property):
Q: What is included in the Sales documents that are provided to my agent?
A: Generally, a Contract of Sale and Vendor’s Statement will be prepared for your property. Both of these documents are very different but compliment each other. The Contract contains the terms and conditions for the sale (ie: the price, parties involved, special conditions concerning your property and potentially a signed guarantee if a company or trust is involved in buying).
Similarly, the Vendor’s Statement (commonly known as a section 32) contains a variety of disclosure requirements under section 32 of the Sale of Land Act 1962 (Vic). This includes, but is not limited to the services connected, building works completed, estimate of rates and copies of the title and plan.
It is important that you understand what is included in these documents prior to signing. Each Contract and Vendor’s Statement will be unique to your property and you should provide all relevant information to your lawyer at the start of the matter.
Q: How do property settlements occur in Victoria?
A: Over 99% of property settlements in Victoria occur electronically via an online platform called PEXA. At settlement, the transfer documents will be electronically registered with Land Victoria and the funds disbursed through each party’s requested bank account. Prior to settlement, if you do not have a mortgage on Title, the paper title will need to be provided to your representative. If you cannot locate it, settlement cannot proceed and a lost title application may be required.
Q: Can you secure an early release of the deposit prior to settlement?
A: Victoria is one of the few States that permits the Vendor to seek an early release of the deposit prior to settlement. This is governed by section 27 of the Sale of Land Act 1962 (Vic). Essentially, a Vendor will need to sign a document outlining the mortgage particulars/caveat particulars on Title and serve this on the Purchaser. Broadly, the Purchaser will then have 28 days from service to validly object to an early release. Grounds for objection can include lack of equity in the property, issues concerning the Title or if there are conditions in the contract that have not been satisfied that are beneficial to the Purchaser (ie: the contract is subject to finance). Should this occur in your matter, your lawyer can advise further.
Q: How can multiple people or companies be recorded on Title?
A: This is an important question to ask and understand prior to settlement as it can have major repercussions for your Estate. If you are buying with another party, you can be recorded as either Joint Tenants or Tenants in Common. If you are Joint Tenant, there are no distinct shares recorded on Title and once one proprietor passes away, the right of survivorship will apply. The surviving proprietor will obtain the deceased’s interest. Alternatively, Tenants in Common do have distinct shares and upon the death of one, their interest shall form part of their Estate.
Further, if you are buying as a Trustee of a Trust, you must advise your representative of this fact. The Trustee will be recorded on Title but the Trust will not. Instead, a Declaration of Trust and Notice of Trust Acquisition will be completed.
Q: Can you sell a property with a deceased person on Title?
A: As an executor or administrator, you will be permitted to sell a property with the deceased on Title. However, you will not be able to settle until the deceased has been removed (either by an application by surviving proprietor or application by personal representative). This should be discussed with your legal representative.
Q: What tax issues should I be aware of when selling my property?
A: Depending on your situation, both GST and Capital Gains Tax may apply to your sale. You should ensure that you have obtained the necessary financial advice prior to signing the Contract.
Q: Someone robbed my house or a family member passed away at the house, what should I say to the Purchaser?
A: Under section 32 of the Sale of Land Act 1962 (Vic), arguably neither of these points would need to be disclosed to a Purchaser. However, section 12 of the Sale of Land Act 1962 (Vic) does provide a requirement for Vendors to disclose “material facts” and not knowingly or recklessly conceal this information to Purchasers. Unfortunately, the question of what is material very much is determined on a case by case basis. If an individual was murdered at the property or it was constantly robbed, then this would arguably be material to Purchasers. If an individual died at the property from illness, this may also be material in some circumstances.
If in doubt, you should discuss any specific concerns with your legal representative.
If you are considering buying or selling your property, there are quite a few legal steps that must be completed. We can help you navigate any specific concerns or complexities surrounding your matter to ensure that you are aware of your rights and obligations throughout the process. If you would like our assistance, please do not hesitate to contact us on (03) 8658 0040 or by email to firstname.lastname@example.org