Selling a property: what steps are involved?

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Before the sale

Vendors seeking the advice of a conveyancer should consider a number of issues prior to sale. Clear instructions should be provided at all material stages. Even where a point may seem insignificant, a phone call to the conveyancer can clarify misunderstandings and save you time and money in the long run. Additionally, vendors should consider whether any matters relating to subdivision have been attended to or whether there are plans awaiting approval for the property.

Conveyancers must give their clients a statement under the Legal Practice Act 1996 detailing their insurance arrangements and also providing the details of any legal practitioner intended to be retained for the transaction, and if this is not provided then a statement indicating that the conveyancer is not authorised to perform legal work, is required in its place.

Vendor's Statement

This is the most important part of the vendor's responsibilities in the sale of land. The information contained below is extremely summary. It is not to be relied upon in any way, and if you are considering selling land you should seek expert advice to ensure full compliance with s 32 of the Sale of Land Act 1963 (Vic).

Although the principle of ‘buyer beware’ certainly still applies to the sale of land in Victoria, s 32 has placed very specific responsibilities upon the vendor. The statement must include specific information on a number of matters. The law deems the following to be the basic information that the vendor should be expected to hold and pass to the purchaser. For example, the statement should include:

sufficient evidence of the right to sell;
the official planning certificate;
information regarding payment of rates;
information regarding building permits in the previous seven years;
insurance details;
encumbrances or restrictions on title (such as easements or covenants); and
body corporate information where the property is a strata title.

This list is not complete.

The Contract

Your contract should clearly separate chattels and fixtures. "Chattel" is the legal term for items that are moveable and that, in relation to land, have a temporary position. "Fixture" is the legal term for items that are attached to a property or structure and that, in relation to land, have a more permanent position (although nothing is forever!). Fixtures are sold with the property, chattels are not. It is absolutely essential that the contract specify all relevant items to be either one or the other. There have been very many court cases where vendors and purchasers each expected different items to be included with the property. Vendors should therefore seek expert advice to avoid complications prior to settlement.

Between Contract and Settlement

This stage involves much more custom and practice and fewer strict legal requirements. Vendor's are entitled to ask for explanations concerning any stage or step that they do not understand. Generally, however, this stage involves a lot of to-and-fro between the various parties involved in the transaction. The various activities involve, for example, the payment and holding of deposits, use of deposit bonds, exchange of contracts (if it has not already occurred), exercising rights surrounding the statutory cooling-off period, requisitions on title (see below), inspection, and organisation of settlement monies. This list is not complete.

Requisitions on title

The purchaser is entitled, in addition to what they receive in the s 32 statement, to request particular information in relation to the property. This request is known as a requisition on title. A requisition on title does not encompass any inquiry the purchaser sees fit to make: there are limits to the information requested. There are some variations on the practice of requisitions, such as a vendor pre-empting such inquiries by providing in advance certain answers as might be required. This approach requires expert advice and vendors should tread carefully in this area.

There are various other arrangements that can be made in relation to finance and the title to property, and these arrangements will vary depending on the circumstances.

Final Matters

After settlement, a number of matters must be attended to. Keys must be obtained, the local council and the water board must be notified of the change in ownership and, if there is finance involved, the arrangements relating to the security for the loan must be completed.

If you have borrowed against this property, your lender will normally take the title and transfer documents, arrange for the registration of the transfer into your name, and hold the title until you have repaid your loan. There are various other arrangements that can be made in relation to finance and the title to property and arrangements will vary depending on the circumstances.

Finally, the transfer of the property must be stamped and registered with the Titles Office. At this point the transfer is complete.

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