Why consult a conveyancer first?
Because your conveyancer can guide you through the mine field involved in buying real estate. You will need to know what you can and cannot do when dealing with an Estate Agent and you should be aware of your cooling off rights before you enter into a contract to purchase property. You should also be aware of all the costs involved before you commit yourself to anything so that you have worked out a budget and know exactly what you can afford before you start to negotiate a price with your agent.
You will be able to clarify any matters that you are not completely aware of and your conveyancer can help you with any and all matters relating to the purchase of property.

What is a Section 32 Statement?

A Vendor of real estate cannot legally sell a property without first providing a prospective Purchaser a statement setting out the particulars required by Section 32 of the Sale of Land Act 1962 signed by the Vendor. Failure to do so provides the Purchaser with a right to terminate a contract for the sale of that real estate.

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The Law provides that the Real Estate Agent must have available at all times a complete contract for the sale of any residential property. A copy of the contract is to be made available for any prospective purchaser to look at and to get legal advice on.

The contract will contain all the details of the property and will have attached to it a zoning certificate showing whether the property is zoned by council as residential or for some other zoning purpose. Also attached will be a full title search showing any easements or restrictions that effect the use of the property and any mortgages or other matters effecting the title of the property. A sewer diagram must also be attached so that you can see if, and or where, the sewer main crosses the property.

Not all things that effect the sale will be written into the contract. There are several matters enshrined in legislation that effect the contract for sale of land that are not spelt out in the written contract and it is best that you have your conveyancer explain the effect of the contract before you sign and commit yourself to it.

The contract date will determine the date of settlement or completion. The contract will normally have a specified time for settlement to take place after the date of the contract, this time period is normally 42 days (or 6 weeks). The time for settlement can be negotiated and depending on other matters, for example the settlement date in any contract to sell property that must settle simultaneously with the purchase, this date should be discussed with your conveyancer before it is signed.

The contract also contains a description of all inclusions that are to be sold with the property. These things should be confirmed with or negotiated through your conveyancer before the contract is signed.

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Before you commit yourself to the purchase of a property you need to decide whether it is prudent to obtain inspections for structural defects and pest activity. A standard contract does not cover the quality of the buildings on the property.
If you are buying a house then you will want to know that the building is structurally sound and that it is not infected by white ants or any other structural problems.
You should expect that any building that is not brand new will have some defects but most will be minor maintenance or cosmetic work that is probably visible on your own inspection. A building inspection will show these matters but what is most important is that an experienced inspector will advise on any structural problems that may not be obvious to the untrained eye. It will also report on any obvious drainage problems.
A Pest inspection will report on any pests that may be present or advise on any pest activity affecting the property. This report is for the activity of structural pests and will not normally advise on the presence of cockroaches, mice etc.
It is recommended that you obtain both a Pest and Building Inspection, they will give you peace of mind and compared to the price of your purchase the cost of these reports is minimal.
You should choose inspectors that carry Professional Indemnity Insurance so that if they miss something that is detrimental you have some chance of being compensated for this error or oversight. Try and use someone who has been recommended to you so that you know of their work and competence.

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When buying a unit, townhouse or villa you are buying into a strata scheme. Whether you obtain a pest and building inspection is your choice, it is nice to know that the lot you are buying is clear of any structural or pest problems but these reports will not normally advise on the other lots in the scheme so that you do not know of any problems with any other lot in the scheme.

You should obtain an inspection of the books and records of the owners corporation, commonly called a strata inspection. There are firms who specialise in these inspections and are experts in their field. They do not inspect the building only the written records kept by the owners corporation. Usually a managing agent is appointed by the owners corporation to keep these records so that the inspection is done at the office of the managing agent.

The inspection will tell you of things such as:

- What insurances are in place

- What the quarterly levies are

- What the financial position of the scheme is

- If there are any ongoing maintenance problems

- If there are any special levies struck for the cost of any works to be done

- And any other matters that may be reported in the records or minutes of meetings.

If a lot owner has any structural or maintenance problems with their lot they are usually reported to the managing agent and they should record those reports, however this cannot be relied on.

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Before you apply for a loan you should do a budget to assist you to know how much you can afford to pay each week on loan repayments.
There are many places you can apply for a loan, the banks, credit unions, mortgage lenders or a finance broker. It is wise to shop around and do your homework before you apply so that you have an idea of what is being explained to you. There are so many different types of loans it is difficult to be in a position to understand all the complexities of the different types of loans.
If you have decided on which type of loan you require you can apply direct to the finance provider you have chosen. If you are unsure then it may be a good idea to consult a finance broker. Finance brokers have access to many banks, credit unions and mortgage lenders and can find the loan that best suites your needs. Normally there is no extra cost for using a broker because the finance provider pays the brokers fee for referring the loan to them.
Be aware that different institutions pay different commissions to brokers so that it is always a possibility that the loan you are referred to may not be the best for you but in fact be the best commission paid to the broker. For this reason you should have done some homework to have an idea of what rates etc are available at the time you apply.
With finance institutions offering generous loans such as 100% loans you should be aware that these types of loans and any loan that is more than 80% of the valuation of the property there will be mortgage insurance to be paid. This insurance insures the lender not you. The premium depends on the loan to valuation ration and increases, as the loan gets closer to the valuation. It is an extra expense that you may not have allowed for and can be several thousand dollars depending on the amount of the loans.

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Contracts are signed by all parties involved in the transaction and when the seller and buyer have both agreed on a price and the conditions of the sale the contracts are exchanged and dated and the deposit paid by the buyer.

Contracts are drawn up in duplicate and one copy is signed by the seller and one copy is signed by the buyer. The exchange of contracts is the exchanging of copies so that each party ends up holding the copy signed by the other party.

The contract can be exchanged in one of two ways:

1.           By the estate agent. In this case the contracts are signed and exchanged shortly after the sale price has been agreed to. The agent will send the appropriate copy of the contract to the parties conveyancer and the buyer will have a 5 working day cooling off period in which to get any reports, finance approval and have the contract explained by their conveyancer. The seller does not have the benefit of the cooling off period.

2.           By the Conveyancer. In this case it would be normal for the buyer to have all reports done, financial approval and the contract explained by their conveyancer before the contracts are exchanged. It is usual practice for the buyer to waive their cooling off rights so that the contract is binding on both parties as and from the date of the exchange taking place.

Until such time as the contracts are exchanged either party can withdraw from the transaction, it is only once contracts are exchanged that the parties are bound to proceed, and in the case of the buyer having a cooling off period the buyer is not bound until the cooling off period expires.

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Every contract for the sale of residential property (less than 2.5 hectares) has a cooling off period of five working days the cooling off period ends at 5.00pm on the fifth working day). This means that after entering into the contract the purchaser has five working days in which to "cool off". The seller is locked into the contract and cannot withdraw from the sale. If the purchaser finds that for any reason he or she does not want to proceed with the purchase they can rescind the contract within the five day period. If they do rescind the contract they forfeit to the vendor 0.25% of the sale price. The contract is then at an end and neither party has any further claim against the other.

The purchaser can waive the cooling off period by having the contract explained by a conveyancer or solicitor and a certificate signed by that conveyancer or solicitor and the certificate handed to the seller's conveyancer. The certificate is drawn under Section 66W of the Conveyancing Act and is commonly called a "Section 66W certificate"

The cooling off period can be shortened by the use of the 66W certificate whereby it will be stated that the purchaser has agreed to shorten the period to whatever number of days has been agreed. It can also be shortened by a condition in the contract.

There is no cooling off period if the property is sold at public auction or on the same day as the property was listed for auction sale.

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It is an essential term of a contract that the deposit be paid on or before the date of the contract (exchange of contract). The deposit paid can vary but it is usually 10% of the sale price. It is normally paid to the estate agent who holds it in trust pending completion as stakeholder.

If a holding deposit has been paid before the contracts are exchanged then it becomes part of the 10% deposit and it is the 10% less the holding deposit that is paid at exchange of contracts.

The agent holds the deposit in trust for both the seller and purchaser and cannot release it without consent from both parties. It is normal practice for that consent to be handed over at completion so that the agent can account to the seller. The agent will deduct his commission from the deposit.

If the purchaser does not pay the deposit on exchange or if the deposit cheque is not honoured by the bank the seller can rescind the contract at any time up until the purchaser makes good the deposit.

A Deposit Bond is a guarantee that while the deposit is not paid at the exchange of contracts it will be paid on completion and if the buyer is in default the underwriter guarantees payment. A deposit bond is usually used when the buyer is selling and all proceeds are coming from their sale or the buyer is borrowing 100% of he purchase price or for some other reason the buyer does not have a cash deposit. Your conveyancer may be able to issue the deposit bond for you.

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The risk of damage to the property is the seller's up until completion or until the purchaser takes possession of the property if that happens prior to completion.

The seller is liable to take care of the property up until completion and the property should be handed over at completion in the same condition, subject to fair wear and tear, as it was at the date of exchange.

If the property is substantially damaged before completion the purchaser has a right to rescind and have the deposit refunded provided they do so with 28 days of becoming aware of the damage. If the damage is not substantial then the purchaser may chose to proceed with the purchase subject to an adjustment of the sale price to account for the cost of repairing the damage done.

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Stamp duty is payable on the contract and on the mortgage. The duty payable on the contract is calculated on the sale price, the higher the price the higher the duty. It is the purchaser's responsibility to pay the stamp duty and this must be done before completion if you are borrowing money and in any event within three months of the date of the contract or a fine is payable for late payment.

1A. Duty rates for a principal place of residence (for contracts entered into on or after 1 January 2007)

Dutiable value range              Rate

$0 - $20,000                          1.4 per cent of the dutiable value of the property

$20,001 - $115,000               $280 plus 2.4 per cent of the dutiable value in excess of $20,000

$115,001 - $400,000             $2,560 plus 5 per cent of the dutiable value in excess of $115,000

$400,001 - $500,000             $16,810 plus 6 per cent of the dutiable value in excess of $400,000

$500,001 - $870,000             $25,660 plus 6 per cent of the dutiable value in excess of $500,000

More than $870,000              5.5 per cent of the dutiable value

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Council Rates;

The Contract provides that council rates be adjusted between the vendor and purchaser as at the settlement date.

Council rates are levied for the financial year. They will be adjusted so that the vendor pays the rates up until the day of settlement and the purchaser will be liable from then until the end of the rating period, in this case the 30 June. They are adjusted as if the rates are paid in full regardless of whether they are in fact paid or not. Any outstanding rates are paid from the sale proceeds (being the vendor's money).

Council rates may be paid by instalments but are an annual levy and hence it is normal practice to adjust the rates for the next full year not according to what instalment may be due next.

The rates are a charge on the land and any outstanding rates become the liability of the purchaser, so it is essential that they are paid up to date at settlement. One of the inquiry certificates the purchaser's conveyancer will obtain is from council and sets out the amount of the annual rates, what payments have been made and what is outstanding.

Water Rates;

In some country areas the water rates are paid to council and may be incorporated within the council rates. In other areas were a separate water authority supplies the water and or sewer an adjustment of these rates must be made at settlement.

Water rates are usually quarterly rates and the adjustment made will only be for the current quarter. The same principals apply to water rates as they do for council rates. A water usage charge may have to be paid by the vendor. To assess if a charge is payable or not can be done in one of two ways.

1.) A meter reading can be organised, this will cost whoever organises it whatever the authority charges for a meter reading.

2.) An estimate can be done, by using the last quarter's water usage charge.

It is usual to use the estimate system to calculate the usage charge because quite often the cost of having the meter read is more than the charge itself. The seller will make an allowance to the purchaser for the usage charge so that when the actual bill for water usage is received the whole bill becomes the purchaser's responsibility.

Strata Levies - Unit, Townhouse, Villa;

If you are purchasing a lot in a strata scheme the quarterly strata levy will need to be adjusted. This levy is adjusted in the same manner as council rates except that they are adjusted on the quarterly not annual rate. The quarter for strata levies may begin at any time, they are not necessarily the quarters of the calendar year. Because the levies commenced on a date determined at the first annual general meeting held by the Owners Corporation the quarterly levies can commence at any date but for convenience it is usually but not necessarily from the beginning of a month.

There may also be special levies to take into consideration. A special levy is struck when and if there are not enough funds held by the owners corporation to cover either the normal running expenses or a special job has to be carried out and there are not enough funds held to cover the cost of that job.

Normally a special levy struck before the date of the contract has to be paid in full by the seller. Some times the special levy may be paid by instalments, if this is the case all instalments must be paid by the seller. If however a special levy is struck after the date of the contract then that levy is adjusted between seller and buyer. Hopefully any strata inspection would show if it is intended to raise a special levy that may be struck after the date of the contract but this cannot be relied upon.

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As a purchaser you are entitled to, and should take advantage of, a pre-settlement or final inspection of the property before you make the final payment and take occupation of the property.

Once settlement takes place it is too late to be finding that some of the inclusions are missing or that something has been damaged. It is extremely difficult to be able to have repairs done or inclusions returned after the seller has left and settlement completed.

The ideal time to do the pre-settlement inspection is immediately before the settlement, however this is usually not very practical. It is usually done the day before the settlement. This way if there is a problem there is some time to sort out the problem before settlement. If there is some concern that something may go missing or damage be done between the inspection and settlement then you have no alternative than to re-inspect just before settlement takes place.

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Prior to the settlement date you should make a list of all those places you need to advise your change of address and see that this is done immediately settlement takes place. Do not do it before settlement just in case there is a delay in the settlement.

As settlement will normally take place at a venue not necessarily close to your conveyancers office, any final moneys that need to be paid by you will need to be drawn and given to your conveyancer the day before settlement. You should be advised by your conveyancer who to make this payment in favour of a couple of days before it is due. However, you should be aware that because of the procedures followed by some financial institutions the final cheque details may not be known until the day before settlement. You should be prepared to receive the details and be able to provide your conveyancer with the final cheques on short notice. While this is not very convenient it is in most cases unavoidable.

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The day of settlement is determined firstly by the date of exchange of contracts and is normally 42 days after that date. It is possible for settlement to take place on an earlier or a later date if both parties agree.

Contracts normally have a condition that if settlement is delayed through no fault of the vendor then the purchaser will pay interest to the vendor in compensation for the delay in settlement. There is normally no penalty on the vendor for delaying settlement.

If when signing the contract, you consider the settlement date is not convenient to you it should be discussed with your conveyancer at that time. It is too late to realise the settlement date is not convenient after the contract is exchanged, unless by chance the vendor agrees.

The settlement time is determined by the availability of all parties to the transaction.

Your conveyancer or your conveyancer's agent will attend the settlement on your behalf. There is no need nor is it normal practice for you to attend the settlement. As there will normally be four parties attending a simple purchase settlement and more if one or more of the parties are simultaneously selling and buying the time of settlement is made according to when all parties are able to attend a certain venue at the same time. This means that while you may prefer a morning settlement it may not be possible.

The settlement venue is determined by the person or institution that holds the deeds to the property, normally a discharging mortgagee.

The parties normally attending a settlement will be the conveyancer for the buyer, the buyer's lender, the conveyancer for the seller and the sellers discharging lender.

It is at settlement that the deeds to the property are handed over for payment of the sale price.

The title deeds and any related documents will be held by your lender until such time as the loan is repaid.

It is your lender who attends to registration of your ownership of the property and the Land Titles Office and they should do this shortly after the settlement date.

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It is normal practice that occupation of the property is not granted until after the settlement has been completed, unless some other arrangement is made. You should not assume that the seller will allow you to move in before settlement even if the property is vacant.

Because you may not have a firm time and date for settlement when you want to book the removalist it is difficult to organise the time for the removalist to arrive and load and then to arrive at your new property coinciding with the settlement time. Unfortunately this is a fact you just have to deal with and it may be best to arrange for the removalist to do an afternoon move in preference for paying the removalist to sit and wait for confirmation to unload.

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If a tenant occupies the property and they have a current lease than you take over the vendors role as landlord immediately settlement has been effected.

There is no need to enter into a new lease as the current lease remains in force and as the new landlord you are bound by the terms of that lease.

If you want to have the tenant vacate the property then you will need to serve on the tenant a notice of termination which must allow the required period of time depending on when it is issued.

1.           When the fixed term period is due to run out either party can give 14 days notice to end the tenancy and it can be served at any time up to the last day of the fixed term.

2.           When the fixed term has expired, if the tenant wants to give notice to terminate then at least 21 days notice must be given. The landlord on the other hand must give at least 60 days notice.

3.           If the property is sold and the fixed term has expired then the landlord must give at least 30 days notice of termination, after the date of the contract.

When the tenant remains in the property the rents need to be adjusted. If the rent is paid in advance then the seller will give you a credit in the settlement figures for that portion of the rent already paid to the seller that applies from the day after settlement.

If the rent is in arrears then no adjustment is made as the purchaser is not expected to take over a debt that is owed to the prior owner.

Quite often the adjustment of rent will be made by the managing agent as they often collect rents weekly but account monthly to the landlord so they could be holding rents in their trust account. Your conveyancer will determine what and how adjustments are made.

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Immediately following settlement the estate agent will be advised so that he has authority to release any keys being held so that the buyer can have access to the premises. It is normal practice for the buyers conveyancer to give to the sellers conveyancer at settlement, a written direction to the agent authorising release of deposit and keys. This direction or "order on agent" is usually faxed to the agent so they have written authority to release the keys to the buyer. When confirmation of the settlement is given to you by your conveyancer you can then collect the keys from the agent and move in.

Your conveyancer will send to you, usually during the week after settlement final letters of confirmation of your purchase together with final statements and any other documents they hold.

You will not receive a Certificate of Title (Title Deed) if you have borrowed any money to assist with the purchase because all title documents are retained by your lender. It is the lender who will register the transfer into your name at the Land Titles Office.

When your lender attends the Land titles Office they will also lodge with the title documents a "Notice of Sale". It is this document that is used by the Land Titles Office to notify Council, Water authority and Valuer General of the change in ownership so that all future rate notices issue in your name. Sometimes there may be a delay in your lender lodging these documents for registration and consequently there is a delay in advising the rating authorities of your details. If the settlement occurs just before Council or Water authority issue their rate notices they may issue in the wrong name. Be aware of this so that if you move into the property and receive correspondence from Council or Water authority in the previous owners name the enclosed assessment is probably for your payment and not the previous owner.

You should now notify all those places that you have determined need to know of your change of address.

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When you have decided to sell any residential property the first thing you should do is consult your conveyancer. You may have been contacted by a Real Estate Agent or you may have one in mind to use, but they cannot proceed until after you see your conveyancer.

The Law provides that before anyone, estate agent or owner, can place a property on the market they must have a proposed contract prepared so that a prospective buyer can inspect the contract. There are hefty fines imposed on anyone caught promoting the sale of a property in anyway whatsoever before a contract is prepared.

Your conveyancer will prepare the contract for you so that you can instruct your estate agent to proceed with the sale of the property.

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The Contract details the ownership, title details and the conditions of the sale together with what is included in the sale. It is prepared with all details leaving blank the buyers details and the sale price.

There are certain documents that must be attached to the contract and are specified in law.

These documents are called ”Prescribed Documents”, without these documents attached a buyer has 14 days from the date of exchange of contracts wherein they can pull out of the contract with no penalty.

These documents are:

-  Zoning certificate (S.149) from council.

-  Sewer diagram showing the location of the authorities sewer main.

-  A full title search obtained from the Land Titles Office.

-  Where a building is situated on the land - a statement that the building has smoke alarms installed in compliance with the laws relating to smoke alarms (from 1 November 2006).

There are certain warranties that the seller must give as described in law. These warranties are called “Prescribed Warranties” and they are that as at the date of the contract:

-  the land is not subject to any adverse affectation, and

-  the land does not contain any part of a sewer main, and

-  the zoning certificate attached to the contract specifies the true status of the land, and

-  There is no matter in relation to any building that would justify on upgrading or demolition order,   

    unless specified otherwise in the contract.

There must also be attached to the contract evidence of owner builder warranty  insurance if any building work has been done in the previous six years, the value of which exceeded $12,000.00. This should be discussed with your conveyancer before putting the property on the market for sale.

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An Estate Agent must have an agency agreement signed before he can list your property for sale. If you are not sure of the terms of the agency agreement you should have your conveyancer explain it to you.

There are several types of agency agreements:   

Exclusive agency agreement is most commonly used to sell residential real estate, you are giving the agent the exclusive right to sell your property. While the exclusive agency agreement is current and someone else sells the property (including yourself)  the agent is entitled to be paid the agreed commission.

Sole agency agreement is very similar to the exclusive agency except that it gives you the right to sell the property yourself without being liable to the agent for a commission.

Multiple listing agreement  allows the agent who may be part of a network of agents working together to sell the property. You only pay a commission to the agent who you have signed the listing agreement with. 

Auction agency agreement  is used when the property is to be sold by auction. It is similar to an exclusive agency in that you give exclusive right to the agent to sell the property by auction.

Open agency agreement  will allow you to list with any number of agents you wish. You only pay a commission to the agent who finds the buyer for your property.

Agency agreements are usually for a fixed period of time and cannot be ended prior to the end of that period unless both seller and agent agree. The period of the agreements is negotiated with the agent, it is usually 90 days but can be for any period agreed to. Make sure you only have one agreement at a time and do not commit yourself to payment of a commission to m ore than one agent. Make sure any agreement is properly ended before entering into another agreement with another agent.

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Contracts are signed by all parties involved in the transaction and when the seller and buyer have both agreed on a price and the conditions of the sale the contracts are exchanged and dated and the deposit paid by the buyer.

Contracts are drawn up in duplicate and one copy is signed by the seller and one copy is signed by the buyer.  The exchange of contracts is the exchanging of copies so that each party ends up holding the copy signed by the other party.

The contract can be exchanged in one of two ways:

1.           By the estate agent.  In this case the contracts are signed and exchanged shortly after the sale price has been agreed to.  The agent will send the appropriate copy of the contract to the parties conveyancer and the buyer will have a 5 working day cooling off period in which to get any reports, finance approval and have the contract explained by their conveyancer.  The seller does not have the benefit of the cooling off period.

2.           By the Conveyancer.  In this case it would be normal for the buyer to have all reports done, financial approval and the contract explained by their conveyancer before the contracts are exchanged.  It is usual practice for the buyer to waive their cooling off rights so that the contract is binding on both parties as and from the date of the exchange taking place.

Until such time as the contracts are exchanged either party can withdraw from the transaction, it is only once contracts are exchanged that the parties are bound to proceed, and in the case of the buyer having a cooling off period the buyer is not bound until the cooling off period expires.

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Every contract for the sale of residential property (less than 2.5 hectares) has a cooling off period of five working days the cooling off period ends at 5.00pm on the fifth working day).  This means that after entering into the contract the purchaser has five working days in which to “cool off”.  The seller is locked into the contract and cannot withdraw from the sale.  If the purchaser finds that for any reason he or she does not want to proceed with the purchase they can rescind the contract within the five day period.  If they do rescind the contract they forfeit to the vendor 0.25% of the sale price.

The contract is then at an end and neither party has any further claim against the other.

The purchaser can waive the cooling off period by having the contract explained by a conveyancer or solicitor and a certificate signed by that conveyancer or solicitor and the certificate handed to the seller’s conveyancer.  The certificate is drawn under Section 66W of the Conveyancing Act and is commonly called a “Section 66W certificate”.

The cooling off period can be shortened by the use of the S66W certificate whereby it will be stated that the purchaser has agreed to shorten the period to whatever number of days has been agreed.  It can also be shortened by a condition in the contract.

There is no cooling off period if the property is sold at public auction or on the same day as the property was listed for auction sale.

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If you owe money to a lender who has a mortgage registered then you will need to have the mortgage discharged at settlement. Your conveyancer will communicate with your mortgagee requesting they have a discharge of mortgage prepared in readiness for settlement, however most lenders will not do anything until they have your written authority to prepare the discharge, this authority also authorises the lender to communicate with your conveyancer, in particular regarding the amount required to payout your loan.

Your conveyancer will try and organise your lender to send their authority form to you but as this can sometimes take time and hold up final settlement you are advised to contact your lender to organise this yourself.

The fixed payout figure will be given to your conveyancer and the loan will be paid out from the proceeds of your sale.

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All buildings on the property are at the sellers risk until settlement. It is therefore essential that all building insurances be maintained and not allowed to lapse before settlement.

If the buildings are damaged by fire or flood or some other catastrophe the buyer is not bound by the contract to proceed with the purchase. Depending on the amount of damage a buyer may proceed with the purchase after negotiating the price down to cover the cost of repairs but it is in the sellers best interest to keep the buildings insured.

If your policy is due before settlement you are advised to renew the policy and then claim a rebate where possible, after settlement. It is better to be sure than sorry.

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A tenant is not bound to move out of the property until: the term of the lease has expired or a notice to vacate has been served.

If selling a property that is tenanted you should be sure that the term of the lease has or will expire before the settlement is due.

You must give 30 days notice to vacate to the tenant and as the settlement date is normally 42 days after exchange of contracts you must arrange with your conveyancer and your managing agent to give the notice immediately contract are exchanged.

It is either you as the landlord or your managing estate agent who must give the notice to the tenant. Your conveyancer cannot give the notice but should check to see the notice has been served.

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Council Rates;

The Contract provides that council rates be adjusted between the vendor and purchaser as at the settlement date.

Council rates are levied for the financial year.  They will be adjusted so that the vendor pays the rates up until the day of settlement and the purchaser will be liable from then until the end of the rating period, in this case the 30 June.  They are adjusted as if the rates are paid in full regardless of whether they are in fact paid or not.  Any outstanding rates are paid from the sale proceeds (being the vendor’s money)

Council rates may be paid by instalments but are an annual levy and hence it is normal practice to adjust the rates for the next full year not according to what instalment may be due next.

The rates are a charge on the land and any outstanding rates become the liability of the purchaser, so it is essential that they are paid up to date at settlement.  One of the inquiry certificates the purchaser’s conveyancer will obtain is from council and sets out the amount of the annual rates, what payments have been made and what is outstanding.

Water Rates;

In some country areas the water rates are paid to council and may be incorporated within the council rates. In other areas were a separate water authority supplies the water and or sewer an adjustment of these rates must be made at settlement.

Water rates are usually quarterly rates and the adjustment made will only be for the current quarter. The same principals apply to water rates as they do for council rates.

A water usage charge may have to be paid by the vendor. To asses whether a charge is payable or not can be done in one of two ways.

 1.) A meter reading can be organised, this will cost whoever organises it whatever the authority charges for a meter reading.

2.) An estimate can be done, by using the last quarter’s water usage charge.

It is usual to use the estimate system to calculate the usage charge because quite often the cost of having the meter read is more than the charge itself. The seller will make an allowance to the purchaser for the usage charge so that when the actual bill for water usage is received the whole bill becomes the purchaser’s responsibility.

Strata Levies – Unit, Townhouse, Villa;

If you are purchasing a lot in a strata scheme the quarterly strata levy will need to be adjusted.  This levy is adjusted in the same manner as council rates except that they are adjusted on the quarterly not annual rate.  The quarter for strata levies may begin at any time, they are not necessarily the quarters of the calendar year.  Because the levies commenced on a date determined at the first annual general meeting held by the Owners Corporation the quarterly levies can commence at any date but for convenience it is usually but not necessarily from the beginning of a month.

There may also be special levies to take into consideration.  A special levy is struck when and if there are not enough funds held by the owners corporation to cover either the normal running expenses or a special job has to be carried out and there are not enough funds held to cover the cost of that job.

Normally a special levy struck before the date of the contract has to be paid in full by the seller.  Some times the special levy may be paid by instalments, if this is the case all instalments must be paid by the seller.  If however a special levy is struck after the date of the contract then that levy is adjusted between seller and buyer.

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If the property is sold with vacant possession then you need to make arrangements to vacate the premises prior to or by the time of settlement.

The property should be left in a clean and tidy condition and all possessions moved from the property.

It is not always easy to arrange for removalists etc. to have you moved out before the settlement time but you should be advised that the buyer does not have to settle if you have not left the property vacant by the settlement time. If need be, and you are able, you might consider moving out the day before settlement but remember that you are still liable for insurance and the safety of the premises until such time as settlement takes place.

If you are selling and buying simultaneously you may have to arrange to have left the sale property and to be en-route to the property you are buying while the settlement takes place. If this is the case make sure you are available in case something goes wrong or there is a hold up in the settlement.

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If there is a tenant in the property who is staying after settlement, an adjustment of the rents will be made at settlement.

If the rent is paid in advance then you will make an allowance in the settlement figures to credit the new owner with that part of the rent that applies after the settlement date. If the rents are in arrears no adjustment in your favour is made as the new owner is not expected to take over a debt that is owed to you.

Quite often the managing agent may be holding rent in trust as they may collect rent weekly but account to the owner monthly. If this is the case the adjustment of rent will be made by the managing agent. Your conveyancer will determine how and what adjustments are to be made.

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When settlement has been completed your conveyancer will account to you for any of the proceeds of sale that are to be paid to you after all adjustments are made and any loan repaid. You may have to make special arrangements for collection of any cheques from the conveyancer depending on where you have moved to etc. Quite often the sale proceeds are not available until the next working day as the settlement normally is not done at the conveyancers office but at the office of your discharging lender and cheques may not be delivered to your conveyancer until the next working day.

The change of ownership details will be notified to Council, Water Authority and Valuer General when documents are lodged for registration at the Land Titles Office following settlement. This may not happen for a couple of weeks depending on the transaction and if you receive either council or water assessments for the property you should redirect them back to the new owners or to your conveyancer to deal with. Please do not throw them away as the new owner may then have interest to pay on late payments of rates they never received.