What is Conveyancing Work?
In the Conveyancers Act 2006 the definition of conveyancing work is legal work carried out in connection with any transaction that creates, varies, transfers, conveys or extinguishes a legal or equitable interest in any real or personal property.
For example:
• sale or purchase of a freehold interest in land
• creation, sale or assignment of a leasehold interest in land
• the grant of a mortgage or other charge
• sale or purchase of a dwelling, vacant land including house or land packages
• sale or purchase of a business and associated work such as the sale of goodwill, stock-in-trade and the transfer of any business licence
• Plans of Subdivision and Consolidation
Conveyancing is also legal work in preparing any documents (eg. agreement, conveyance, transfer, lease or mortgage) necessary to effect any of the aforementioned transactions. In association with this work, it provides for giving advice on the preparation, perusal, exchange or registration of documents that are consequential or ancillary to a transaction and prescribed by the regulations as constituting conveyancing work for the purposes of the Conveyancers Act 2006.
Why should I use a Conveyancer?
Certified Practising Conveyancers (CPCs) have the support and backing of the only professional body representing the conveyancing profession in Victoria, the Australian Institute of Conveyancers Vic Division (AIC). The AIC, in representing conveyancers, is focused on one aspect of law, conveyancing, and as a member all CPCs are provided with up to date information and the support needed to act competently and professionally in that one aspect of law. Take advantage of the professional service and expertise offered to you by your CPC knowing that you are in the safe hands of an expert conveyancer.
When should I see my Conveyancer?
You should speak to your conveyancer as early as possible. You should, preferably, speak to your conveyancer before you look for a property or before you decide to put your property on the market when selling. Never sign anything before consulting your conveyancer. If you are asked to sign a contract request a copy of the contract first so that your conveyancer can go through the contract with you before you sign. If you do this you will understand what you are signing. There is no such thing as a standard contract.
Should I sign with a Real Estate Agent?
No you should speak to your conveyancer as early as possible. You should, preferably, speak to your conveyancer before you look for a property or before you decide to put your property on the market when selling. Never sign anything before consulting your conveyancer. If you are asked to sign a contract request a copy of the contract first so that your conveyancer can go through the contract with you before you sign. If you do this you will understand what you are signing. There is no such thing as a standard contract.
Do I use a Real Estate recommended Conveyancer?
Many estate agents refer clients to a local conveyancers/solicitors. There is nothing wrong with this practice so long as it is based on the professionalism and expertise of the conveyancer/solicitor. If you don't know a conveyancer then this referral may be helpful to you.
Keep in mind that the conveyancer is there to protect your interests and if you would prefer to select your own conveyancer then you can refer to the Institute for a referral or check our web site to find a conveyancer of your own choosing. While there is usually nothing wrong with the agent referring you to a conveyancer you need to feel comfortable with it and it is your choice not the agents as to whom you use.
Can Buyers & Sellers use the same Conveyancer?
There is nothing legally wrong with using the same conveyancer. Your conveyancer is working for you giving you the best advice and guidance throughout your transaction.
It is not always possible to give a buyer and seller the same advice and a conflict can arise. Sometimes these conflicts are only small but can have a large bearing on your transaction and it is not always possible to predict when a conflict may arise. The small amount of savings made, if any, when using the same conveyancer will not balance out the risks that are potentially huge. Large delays can be experienced if the conveyancer cannot continue to act for either party if a conflict of interest arises.
Remember that conveyancing is not just the filling out of forms and attending to stamp duty payments. This may be the largest transaction of your life and you will want to know that your conveyancer is acting in your best interests and not compromising with someone else's at the same time.
What is Verification of Identity?
IMPORTANT NOTICE
VOI was to be implemented Australia wide from 1 July 2015 however it has just been announced that this date will now be postponed.
Please note, we foresee VOI to be in practice in the very near future so encourage you to be aware of how it will affect you, and to be aware of your requirements.
Q1. WHAT IS STANDARD VERIFICATION OF IDENTITY (VOI)?
The purpose of Standard Verification of Identity is to provide a framework for the verification of identity of a party involved in a conveyancing transaction and to reduce the potential risk of land title fraud and other improper land dealings.
Settlement in PEXA is similar to the way settlement occurs at the Stock Exchange and replaces the current practice of handling bank cheques and legal documents with an electronic system. It means a safer, quicker and more efficient method of electronically settling transactions, transferring funds and registering documents.
Q2. WHAT DOES VOI MEAN FOR THE CLIENT?
In any conveyancing transaction, selling or buying, THE ONUS WILL BE ON YOU, the client(s). This means that if you have signed a Contract you MUST abide by providing Balben Property Transfers with evidence of your identity(s) (VOI) before a transaction can settle.
It is not only mandatory, but legislation, that you produce evidence of your identity(s) to Balben.
Q3. WHAT ARE THE IDENTITY REQUIREMENTS?
AS A GUIDE ONLY, to ensure you have the correct documents please check first with your VOI provider.
Generally, you must produce original and current documents from one of the categories below. You should produce two category 1 documents if they have been issued to you. If you don't have the photo ID documents listed below, you need to produce a statutory declaration stating why you cannot produce documents from the first 3 categories. Then you need to produce category 4 documents.
Minimum document requirements for persons who are Australian citizens or residents:
Category 1
Australian Passport or foreign passport and an Australian visa grant notice evidencing an Australian resident visa
plus Australian drivers licence or Photo Card
plus change of name or marriage certificate if necessary
Category 2
Australian Passport or foreign passport and an Australian visa grant notice evidencing an Australian resident visa
plus full birth certificate or citizenship certificate or descent certificate
plus Medicare or Centrelink or Department of Veterans’ Affairs card
plus change of name or marriage certificate if necessary
Category 3
Australian drivers licence or Photo Card
plus full birth certificate or citizenship certificate or descent certificate
plus Medicare or Centrelink or Department of Veterans’ Affairs card
plus change of name or marriage certificate if necessary
Category 4
A. Identifier Declaration
plus full birth certificate or citizenship certificate or descent certificate
plus Medicare or Centrelink or Department of Veterans’ Affairs card
plus change of name or marriage certificate if necessary
B. Identifier Declaration by a Person specified in Verification of Identity Standard paragraph
plus Medicare or Centrelink or Department of Veterans’ Affairs card
plus change of name or marriage certificate if necessary
For persons who are not Australian citizens or residents:
Category 5
A. Foreign passport
plus another form of government issued photographic identity document
plus change of name or marriage certificate if necessary
B. Foreign Passport
plus full birth certificate
plus another form of government issued identity document
plus change of name or marriage certificate if necessary
IMPORTANT NOTES
1. Documents provided at the face to face meeting MUST BE CURRENT AND ORIGINAL DOCUMENTS at the date provided.
2. FAILURE to provide original and current documents at the face-to-face meeting, will incur additional rescheduling of appointment fees.
3. Verification of Identity Standard PARAGRAPH 4.4 READS“
The Subscriber or the Subscriber Agent, must undertake reasonable enquiries to satisfy themselves that the Identity of the Declarant is:
(A) an adult (B) an individual who has known the Person Being Identified for more than 12 months (C) not a Relative of the Person Being Identified (D) not a party to the Conveyancing Transaction the Person Being Identified has or is entering into (E) where Category 4(B) is used, An Australian Legal Practitioner, a Bank Manager, Community Leader, Court Officer, Doctor, Land Council Officeholder, Licensed Conveyancer, Local Government Officeholder, Nurse, Public Servant or Police Officer” by example a possible Subscriber is IDSecure and a possible Subscriber Agent is Balben Property Transfers.
Q4. WHO CAN COMPLETE VOI
As your Conveyancer, we will help guide you through the process in the early stages of your transaction. VOI can be easily obtained and digitally processed at any of the 1,500 participating Australia Post outlets nationwide. Refer to their website for further information.
If for any reason you are unable to attend Australia Post, then there are currently two (2) other VOI providers in Victoria, as well as other states, that will come to your nominated place and time, for example your home, workplace, hospital, coffee shop.
The cost of VOI is not included in your conveyancing fees as it is an independent service. You will need to contact Australia Post or the other VOI providers to obtain information on fees and quotes.
Q5. CAN THE VOI FACE TO FACE MEETING BE DONE VIA SKYPE OR WEBCAM?
No. Skype is currently NOT an acceptable means of completing face-to-face meeting. The meeting must be in person.
Q6. CAN ANY COMBINATION OF ID DOCUMENTS LISTED IN THE MINIM RQEUIRED TABLE BE USED?
For Australian citizens or residents, the documents listed in Option 1 of the minimum documents required table should be used where possible. If these are not available, preference should be given to Option 2 and Option 3 documents.
Where the requirements of Options1, 2 or 3 cannot be met, there is an alternative option, Option 4. Option 4 should not be a common request as most should be able to meet requirements provided for in Options 1-3.
The option for foreign nationals who do not have an Australian Passport or Driver’s licence is shown in the last column of the table below. Original and current identification documents must be sighted.
Documents cannot be chosen across different categories. All documents must be chosen from within a single category.
Q7. DOES THE VOI HAVE TO BE COMPLETED FOR ALL INDIVIDUALS LISTED ON THE CONTRACT OF SALE?
Yes. It is a requirement that each individual recorded in the Contract as a Vendor(s) or Purchaser(s) must be identified.
Q8. WHAT IF A COMPANY IS THE REGISTERED OWNER OR PURCHASER?
Yes. A company as a Vendor or Purchasing entity must also be identified and this would normally include checking that the company is a legal entity as well as identifying the directors/persons authorised to sign on behalf of the company and verifying the identity of
Q9. WHAT IF THE CONTRACT IS SIGNED BY POWER OF ATTORNEY?
Where the attorney is an individual, the attorney must also be identified in terms of VOI requirements.
Q10. CAN I PROVIDE A PHOTOCOPY OF ID DOCUMENTS CERTIFIED BY A JP OR SIMILAR?
No the original and current identification documents must be signed by the person undertaking the VOI. Copies of the originals must be certified as true copies and submitted with the required VOI form.
Q11. WHAT ARE THE IMPLICATIONS OF INCORRECT VOI?
Incomplete or missing VOI will result in rework and may impact the client due to potential delayed settlement.
Q12. WHEN IS VOI REQUIRED FOR VICTORIAN TRANSACTIONS?
VOI was set to be enforced as of 1 July 2015, however it has just been announced that this date is to be delayed and is currently on hold.
It will however be fully implemented in the near future so we strongly urge you to be aware of your requirements.
Q13. AT WHAT STAGE OF MY CONVEYANCING SHOULD I ORGANISE VOI?
VOI should be completed as soon as you have an unconditional Contract of sale. We will guide you with what is required in the early stages of your transaction to ensure you clearly understand the requirements.
Q14. WHAT IF I AM OVERSEAS DURING MY CONVEYANCING TRANSACTION?
If you are overseas you will need to attend the Australian Consulate or an Australian Diplomatic Officer to arrange Verification of Identity. If you are a person identified as a member of the Australian Defence Force, it may be possible to arrange VOI with a Competent Officer.
What is Finance Approval?
Many estate agents refer clients to a local conveyancers/solicitors. There is nothing wrong with this practice so long as it is based on the professionalism and expertise of the conveyancer/solicitor. If you don't know a conveyancer then this referral may be helpful to you.
Keep in mind that the conveyancer is there to protect your interests and if you would prefer to select your own conveyancer then you can refer to the Institute for a referral or check our web site to find a conveyancer of your own choosing. While there is usually nothing wrong with the agent referring you to a conveyancer you need to feel comfortable with it and it is your choice not the agents as to whom you use.
What is a Deposit Bond?
A Deposit Bond is a guarantee or bond that is used in substitute of a cash deposit. It can be used for all or part of the required deposit, up to a maximum of 10% of the purchase price. It is a guarantee to the Vendor (the person selling) provided by an Insurer and can be organised through a banking institution.
At settlement you as the Purchaser are required to pay the full purchase price including the deposit amount. The use of a Deposit Bond does not remove your obligation to pay the full deposit upon settlement.
If you default under the Contract of Sale and are required to pay the deposit, then the Vendor can claim the guaranteed amount from the Insurer. The Insurer will then pursue you (the Purchaser) to recover the money paid on your behalf.
What are the costs involved in selling real estate?
Before proceeding with any conveyancing transaction it is important to know exactly what the costs are, selling a property is no different. Ask your conveyancer for a written quotation of the conveyancing fees and charges. You should also make sure the estate agent gives you a written quotation of his fees and charges or at least the manner in which they will be calculated.
The standard costs when selling real estate are:
Fees and charges payable to discharge any loan
Agent's commission and charges for advertising etc
Rates and taxes adjustment for the period you owned the property
Moving costs
Balance of loan repayments
Conveyancing fees and disbursements (typically)
Title search
Zoning certificate from council
Drainage diagram
Agency fees (settlement etc)
Fee to arrange discharge of mortgage, when necessary
Your Conveyancers fee
Work required by your Mortgagee
Check with your Conveyancer for any other costs.
What are the costs involved in buying real estate?
There are several costs involved in buying any real estate. It is vital that you know what they are before you commence the transaction in order to budget for them. Costs can blow out if you are not prepared and make yourself aware of what is involved.
Ask your conveyancer to give you a written quotation of all the fees and charges involved in your particular transaction so you know what the conveyancing process will cost you. Ask whether there are any other costs or charges that may arise that are not included in the quotation. Standard fees and charges payable to your conveyancing:
- Title search costs
- Governmental Inquiries
- Agency fees for settlement etc.
- Fee for attending to loan and mortgage documents, when necessary
- Your Conveyancing fee
- Work required by your Mortgagee
- Stamp Duty fees paid to the State Revenue Office
- Registration fees paid to the Lands Department
- There may be others depending on your individual transaction.
Other costs to be aware of:
- Fees and charges for obtaining a loan
- Mortgage insurance where applicable
- Adjustment of rates and taxes for the period you own the property
- Insurance of buildings
- Removalists and other moving costs
What are Disbursements?
Disbursements are the out-of-pocket costs associated with your transaction paid by Balben Property Transfers. At settlement Balben Property Transfers will seek reimbursement from you for any disbursements incurred and will allow for these in our Statement of Account to you.
Disbursements can include any of the following examples:
- Title searches
- Local council building certificate
- Land tax clearance certificate
- Water rates certificate
- Local council rates certificate
- Dept of education
- Roads and Traffic Authority
- Electricity
- Stationary, postage, photocopying, faxes
The amount of these Disbursements will vary depending on whether you are selling or purchasing a property.
What are Adjustments?
Rate Adjustments relate to the calculating of rates owing at settlement. This means that all rates and taxes on the property will be split between the vendor and the purchaser pursuant to the date of settlement.
The vendor will be required to pay all monies due on the property until settlement, and the purchaser will pay all monies from the date of settlement onward. The amount of adjustments owing by each party will therefore depend on the time of year in which the property is sold.
Do I Qualify for Stamp Duty Benefits?
Whether or not a purchaser qualifies for Stamp Duty Benefits, be it a partial or full exemption, depends on the conditions of the purchase. You may qualify for stamp duty benefits if you are hold a Concession Card or Pensioner Card.
Any benefits you are entitled to, will be calculated on the value of the purchased property.
To check if you qualify for any Stamp Duty Benefits, you can contact Balben Property Transfers or the State Revenue Office.
When are Stamp Duty & Registration fees due?
If you intend to purchase property with finance from a bank or other lending institution, then the payment of Stamp Duty and Registration fees will generally be advanced by your chosen lending institution at settlement.
If you are purchasing with cash Balben Property Transfers will need to attend to the stamping and lodging of the documents within 30 days of settlement, otherwise penalties will apply.
What is Settlement?
Settlement refers to the date upon which the transfer of all monies and documents pertaining to the property are exchanged, including the title and thus the ownership of the property to that of the purchaser.
Do I have to attend settlement?
The settlement date negotiated between both parties will be stipulated in the Contract of Sale. A time for settlement will be arranged prior to settlement by the Conveyancer. Neither the Vendor or Purchaser are required to attend settlement, as this is the Conveyancer's responsibility.
The vendors and purchasers will be informed once settlement has occurred.
How do I collect the keys?
Generally the Vendor will provide their Real Estate Agent with keys prior to settlement. Once settlement has taken place and the Vendor's Conveyancer has confirmed so with the Agent, the Purchaser will be able to collect the keys direct from the Agent's office.
Do Conveyancers need to be Licensed?
As of 1 July 2008, any person practising as a Conveyancer in Victoria, who is not an Australian Legal Practitioner, must be licensed to continue to conduct Conveyancing work.
The Conveyancers Act 2006 (Victoria) was introduced into State Parliament after a comprehensive legislative change and thus the new laws for licensing came into effect.
In introducing the legislation the Government was also concerned to address other problem areas such as inadequate professional indemnity insurance, lack of experience and expertise, lack of any professional conduct rules and the absence of any requirement to make proper disclosure to the client of the costs likely to be involved in the transaction.
It was clear that these fundamental problems could only be addressed by comprehensive legislative change and as a result the Conveyancers Act 2006 (Victoria) was introduced into State Parliament and came into operation on 1 July 2008.
Do Conveyancers have Trust Accounts?
Under the Conveyancers Act 2006 Licensed Conveyancers can hold a general trust account designed for the purpose of holding money received from a client, in the course of, or in connection with the carrying out of Conveyancing work. Trust money in the form of funds received from clients on account of fees and charges in advance of carrying out Conveyancing work, must also be held in a general trust account, until such time at their Conveyance is complete.
Part 5 of the Act and Part 3 of the Conveyancers (Professional Conduct and Trust Account) Regulations prescribe strict processes for dealing with any trust monies received.
Can I Claim Depreciation on Investment Property?
If you have an investment property, it can be depreciated. Think of it as ‘wear and tear'. Houses, units and commercial properties all qualify. Even older properties can be depreciated. 81% of Australian property investors are not claiming their full tax deductions!
By using an ATO recognised Tax Depreciation Schedule, investors can claim thousands of legitimate tax dollars back on their investments, conserving their cash flow and safeguarding their future.
Schedules can even be backdated so investors can claim up to 4 years of ‘lost' depreciation!
How much money can you claim?
How much you can claim as a tax deduction depends on your individual tax situation.
Doesn't depreciation only apply to new buildings?
Any building where construction started after 18 July 1985 qualifies for the 'Special Building Write-Off'. That means you can depreciate the original cost of construction. Plus, for all buildings, there are a host of depreciable assets like hot water systems, blinds, floor coverings and stoves that may be depreciated.
Can renovations be depreciated?
Yes. The 'Special Building Write-Off' can be claimed as long as the renovations were undertaken after 26 February 1992. Investors can also claim Architects and Engineers Fees. Structural inclusions such as retaining walls and sealed driveways, if undertaken after this date, can also qualify.
Balben Property Transfers recommends that you take advantage by using a Tax Depreciation Schedule to help you maximise your Tax Depreciation.
Please note that we recommend Depreciator to you on an independent basis and we do not receive commission or other benefits from Depreciator.
Depreciator has an Australia wide network of Quantity Surveyors and appropriately qualified people. They supply Tax Depreciation Schedules to one of Australia's largest accounting groups and two of Australia's largest real estate groups. Their service is cost effective and efficient.
What are the benefits of using Depreciator?
The fee is 100% tax-deductible. And if you pay by June 30, you can claim it back almost straightaway.
Depreciator specialises in Tax Depreciation Schedules. This ensures that you receive the maximum tax-deductible depreciation you are entitled to.
Depreciator provides a comprehensive report that sets depreciation entitlements on a yearly basis for 20 years - saving you money for the next 20 years!
The Tax Depreciation Schedules are suitable for all types of property investors - companies, partnerships, trusts, individuals and couples.
Hassle free - all you need to do is fill in the Online Application Form and Depreciator will take care of the rest.
There is even a guarantee! - "If Depreciator can't find more depreciation than their fee in the first full year, the Schedule is free."
The Schedule is transferable to future buyers if the property is sold.
The Schedule has calculations for both the Prime Cost and Diminishing Value methods so you and your accountant can select the most tax-effective strategy.
Who is Depreciator?
Depreciator is a Quantity Surveying company whose sole focus is the preparation of Tax Depreciation Schedules for individual investors. They cover all capital cities and many regional areas.
Their specialist skills ensure that clients receive the maximum depreciation allowable on their investment properties. For further details on Depreciation Schedules, please visit Depreciators website at www.depreciator.com.au
What is Old Law?
The current system of transferring land is governed by what is known as the Torrens System.
Properties which were brought or sold prior to this system being introduced are called Old Law Chains of Title.
Property still under Old Law must be converted to the Torrens System when transferred, sub-divided, or even sometimes when refinancing. This is a service that Balben Property Transfers can happily assist you with.
What are Caveats?
A caveat is a document lodged at the Land Titles Office to protect the rights of a person who claims to have an interest in the land. The caveat itself does not create anything, nor does it initiate any rights not already in existence. It does however act as an injunction, restraining the Registrar of Titles from registering any dealings with the property without first notifying the caveator.
There can be caveats over land without the knowledge of the proprietor, and may only be discovered once proceedings for the transfer of the land have begun. The finding of a caveat can often lead to delays up to 90 days or more between the time of signing the contract until settlement is achieved.
Any person claiming an interest in land is entitled to lodge a caveat on title, but cannot be lodged if no legitimate interest exists. Caveats can be removed through withdrawal by the caveator in an approved form.
What are Covenants and Easements?
Covenant
A covenant is a contractual agreement, creating an obligation to the owner of the land that the covenant affects. It is passed over with the property when transferred. A covenant is used, in most cases, to preserve rights and regulate standards outside the range of easements (see below) and can either be positive or negative to the owner of the land.
Covenants can include particulars such as the minimum floor size of a house, the materials used for building, or even the use of objects on the property such as business signs.
Easement
An easement is an interest in land that allows a person to have beneficial use of another's land for a specific reason. It is therefore a restriction on the land over which the easement is held.
Easements come in many forms and property related services, but some of the most common in residential areas are sewer and drainage easements, and the combined use of a single driveway for two adjoining properties.
Some easements provide the right of passage for another over the other's property. Some easements require maintenance, meaning that to ensure the easement still applies, it must be used; such with the right of passage. If that passage becomes unused, then that easement may be lost with time.
The particulars of an easement will be stipulated in the Title to which the easement applies. Purchasers should also note that there may be unregistered easements such as sewers, drains, water pipes, gas pipes and underground and/or overhead cables.
What is Common Property?
Common Property refers to the land which can be accessed by others living under the one strata title or owners corporation or all others living within the same block of flats, units, or apartments. The common property will usually include things such as car parking areas, court yards, grassed areas or stairways. The common property is the responsibility of all those who have claim to it; so when repairs or maintenance are required, the costs will be borne by all.
Any land which contains common property must have an appointed Owners Corporation Manager with public liability insurance including reinstatement and replacement insurance for all buildings on each lot with a minimum of $10,000,000 public liability.
What is an Owners Corporation?
An Owners Corporation is responsible for managing common property existing between two or more properties. Whenever a plan of subdivision creates common property, an Owners Corporation is responsible for managing that common property. A purchaser of a lot that is part of an Owners Corporation automatically becomes a member of the Owners Corporation when the transfer of that lot to the purchaser has been registered with Land Victoria.
If you buy into an Owners Corporation, you will be purchasing not only the individual property, but also ownership of, and the right to use, the common property as set out in the plan of subdivision. This common property may include driveways, stairs, paths, passages, lifts, lobbies, common garden areas and other facilities set up for use by owners and Occupiers. In order to identify the boundary between the individual lot you are purchasing (for which the owner is solely responsible) and the common property (for which all members of the Owners Corporation are responsible), you should closely inspect the plan of subdivision.
How are decisions made by an Owners Corporation?
As an owner, you will be required to make financial contributions to the Owners Corporation, in particular for the repair, maintenance and management of the common property. Decisions as to the management of this common property will be the subject of collective decision making. Decisions as to these financial contributions, which may involve significant expenditure, will be decided by a vote.
Owners Corporation rules
The Owners Corporation rules may deal with matters such as car parking, noise, pets, the appearance or use of lots, behaviour of owners, occupiers or guests and grievance procedures.
You should look at the Owners Corporation rules to consider any restrictions imposed by the rules.
Lot Entitlement & Liability
The plan of subdivision will also show your lot entitlement and lot liability. Lot liability represents the share of Owners Corporation expenses that each Lot Owner is required to pay.
Lot entitlement is an owner's share of ownership of the common property, which determines voting rights. You should make sure that the allocation of lot liability and entitlement for the lot you are considering buying seems fair and reasonable.
Further Information
If you are interested in finding out more about living under an Owners Corporation, you can contact Consumer Affairs Victoria. If you require further information about the particular Owners Corporation you are buying into you can inspect that Owners Corporation's information register.
Management of an Owners Corporation
An Owners Corporation MUST BE managed by a professionally qualified Owners Corporation Manager registered with the Business Licensing Authority (BLA).
IF YOU ARE UNCERTAIN ABOUT ANY ASPECT OF THE OWNERS CORPORATION OR THE DOCUMENTS YOU HAVE RECEIVED FROM THE OWNERS CORPORATION, YOU SHOULD SEEK EXPERT ADVICE.
New Building Works including Owner-Builder Works
Vendors are required to give details of any building approvals, permits and insurance (if applicable) issued in the last seven (7) years.
Subsection 137B(2) provides that domestic owner builder obligations arise if a contract to sell is entered into within a prescribed period, which most commonly is 6 years and 6 months after the date of completion of the work. Completion means an occupancy permit has been issued (new houses) or a certificate of final inspection has been issued (alterations and additions).
In all cases, the following statutory warranties by the Vendor must be set out in the Contract of Sale:
that all domestic building work carried out in relation to the construction by or on behalf of the vendor of the home was carried out in a proper and workmanlike manner;
that all materials used in that domestic building work were good and suitable for the purpose and, unless stated otherwise, new;
that the domestic building work was carried out in accordance with all laws and legal requirements (including the Building Act and its regulations);
In addition to the above, the following requirements must also be provided by the Vendor:
a condition report which is no more than 6 months old at the time of the Contract prepared by a prescribed building practitioner (such as an architect, building surveyor or building inspector) must be given to the buyer pre-contract; and
if the value of the work is more than $12,000.00 and the owner is not a registered building practitioner, then building warranty insurance must be obtained and a Certificate of Currency provided to the buyer pre-contract. The insurance must cover structural defects for 6 years and non-structural defects for 2 years. Note, however, that the insurance can only be invoked on the death, insolvency or dissapearance of the domestic owner builder.
If you are an owner builder it is important to contact our office so we may assist you with the correct requirements for the Contract of Sale.
Warranty & Title Insurance for new building works?
Warranty Insurance must be taken out by Victorian owners be they owner builders, or building through a registered builder, for all building works with a cost of more than $12,000.00. The idea with Warranty Insurance is that you can have construction mistakes fixed or get your money back if you lodge a legitimate claim. This might be protection against the builder going bankrupt, disappearing or passing away and protection is also given for certain defects identified in the completed works. If the builder simply refuses to repair the shoddy work or return your money, your only option is to take them to the consumer affairs tribunal which can be a lengthy and difficult process. If your builder does go broke, dies or disappears before the complaint is resolved and you're forced to resort to your home warranty insurance, it won't cover legal costs against the builder, which can easily exceed the amount you're attempting to recover.
Choice magazine has published in their edition of March 2014, "the Victorian Managed Insurance Authority has reported Victorian homeowners paid about $87.8m in warranty insurance premiums from May 2010 to May 2011, but only $108,000 was paid out on a total of three successful claims. And about 250,000 Victorians suffered damage at the hands of the building industry in 2010." This means less than one percent of policy holders meet the criteria for making a claim.
Therefore we highly recommend Title Insurance also be taken out to provide you with maximum coverage. Similar to Warranty Insurance, Title insurance has a one off premium however is significantly lower in cost ranging from as little as $300.00 with a much wider range of coverage and softened criteria. There is also no excess on the policy, and the policy lasts for as long as you own the property. A successful title Insurance claim would cover you if by example the builder passed away, by stepping in and arrange repairs and covering any associated costs.
Swimming pools, Spas and other bodies of water
Under the Building Regulations all new and existing swimming pools, spas or other bodies of water of more than 300mm in depth (including those constructed prior to 8 April 1991) must have gates and doors installed with self closing and self latching devices (located at least 1.5m above ground level) that returns the door or gate to its closed and locked position at any point from a stationary start as failure to do so may incur a fine. Further information can be obtained from your local council.
What is a Will & do I need one?
What is a Will?
When buying property it is crucial for you to also have a Will prepared. A Will is a legal document that clearly defines how you wish your assets to be distributed upon your death.
The Importance of a Will
If you die without making a Will ('intestate'), your assets will be distributed according to law. The reality being your estate will be distributed to relatives whom you most likely have little contact with, while your loved ones miss out. This can or may lead to lengthy delays and expensive administration in finalising your estate.
If you already have a Will when purchasing property, you should ensure that if required, it is updated to reflect any major changes in your life. You should ensure your Will is updated under many different circumstances, not just buying or selling property. For example you may need to update your Will because of change in marriage/defacto or domestic relationships, separations or divorce, starting a family, buying/selling shares, retirement and the birth of grandchildren, nieces and nephews, or any other important person in your life, even your pets can be included!
Do I need a Power of Attorney?
What is a Power of Attorney?
Powers of Attorney are used to appoint a trusted individual to make these important financial decisions when you cannot. There are a number of forms of these legal documents which can be used depending on the circumstances that arise. A General Power of Attorney is used to appoint someone to make decisions on your behalf for a specified time period- for example if you travel overseas and cannot manage your financial affairs. However if you lose your capacity to make decisions permanently, this appointment will become invalid.
An Enduring Power of Attorney continues to apply even where you can no longer make financial decisions for yourself. As the name suggests, an Enduring Power of Attorney will persist even when you are legally incapable of making financial decisions. Creating an Enduring Power of Attorney is equally as important as drafting a will.
Be sure to note that an Enduring Power of Attorney does not permit an individual to make lifestyle, personal or treatment decisions on your behalf. In order to appoint someone to do this, you need an Enduring Power of Guardianship.
What are the benefits?
By creating an enduring power of attorney, you can appoint someone you trust to manage your financial affairs either when you lose capacity or immediately. This will enable you to choose someone who is reliable and financially astute. A power of attorney also minimises financial hardships that may arise if you can no longer make reasoned decisions or attend vital meetings and institutions due to physical disability. These simple documents will ensure that your financial assets are managed with as much continuity as possible.
You can also choose to impose limits on what activities and decisions your appointed attorney can carry out on your behalf. It is possible to outline how you would like your estate be managed which adds to the control you have over your financial affairs. Your appointed attorney can also maintain confidentiality in respect of your investments, property and other financial matters.
An Enduring Power of Attorney is a necessary document for anyone who wishes to ensure their financial affairs are in order before kicking back for the holidays.
What if I'm Away on Holidays?
If you are going to be away for any part of your transaction, you should contact our office immediately so we can be sure all documentation is in order for settlement.
In some circumstances, you can sign the required documents to effect settlement prior to your departure. In other cases you may need to appoint a Power of Attorney to act on your behalf, if you have not done so already. Please refer to our previous fact page regarding Powers of Attorney for further information.
When buying property it is also crucial that you have a Will prepared, or if you already have a Will, that it is current and up to date.
Can I sell without using a Real Estate Agent?
Yes. You cannot list or advertise your property for sale in any way whatsoever until your conveyancer has prepared the proposed Section 32 Statement and Contract for Sale. Anyone who makes an inquiry or an offer on your property is entitled to ask for a copy of the proposed Section 32 Statement and Contract for Sale. Please note that can be fines payable if a copy is not available on request.
It is important that if you wish to sell without an agent, that you consult your conveyancer before doing anything further.
What is a Certified Practising Conveyancer?
A CPC is a 'Certified Practising Conveyancer'. To become a CPC a conveyancer must have completed the educational and practical training requirements to hold a conveyancer's licence and be a member of the Australian Institute of Conveyancers Victorian Division. (AIC)
Being a member of the AIC means that the conveyancer must abide by the rules and codes of conduct of the AIC, they must also complete the annual continuing education requirements that are required to renew a conveyancer's licence each year. The AIC provides the facility by which members can complete their continuing education requirements.
The AIC promotes the view that members should complete more than the compulsory requirements set down by the Office of Fair Trading and that continuing education is of utmost importance to the continuing skill and expertise that is needed to remain abreast of the ever changing nature of the conveyancing profession. Most CPCs will complete more than the compulsory continuing education requirements.
Why use a Certified Practising Conveyancer?
Certified Practising Conveyancers (CPCs) have the support and backing of the only professional body representing the conveyancing profession in Victoria, the Australian Institute of Conveyancers Vic Division (AIC). The AIC, in representing conveyancers, is focused on one aspect of law, conveyancing, and as a member all CPCs are provided with up to date information and the support needed to act competently and professionally in that one aspect of law. Take advantage of the professional service and expertise offered to you by your CPC knowing that you are in the safe hands of an expert conveyancer.
What are Useful Terms to Know?
CAVEAT
If a Caveat is registered on Title it means that some other person has an interest in the land.
CERTIFICATE OF TITLE
A document identifying the ownership of land showing who owns it, whether there is any mortgage or other encumbrance etc affecting the land.
COMMON PROPERTY
A plan that divides a parcel of land into lots. Common property within the title plan can be areas set aside for such things as sporting fields, swimming pool, club house and or other community activities. It allows for residential houses and strata units with other activities within the community plan.
COMMON PROPERTY TITLE
Title to land on the title plan that has been designated at common property.
CONVEYANCE
The legal process required to transfer ownership of real estate.
CONVEYANCER
A person licensed by Government to advise on any prepared documents to transfer or convey ownership of real estate. Conveyancers are licensed in Victoria to handle other transactions related to land and business transactions.
COVENANT
An agreement by one party to adhere to certain terms, conditions or restrictions regarding the property. This will show on the Certificate of Title and you should be aware of the effect it may have on your use of the property.
DEPOSIT
A deposit is normally paid by the purchaser at the time of exchange of contracts, normally 10% of the sale price, however a lessor amount can be paid if agreed by the vendor.
EASEMENT
A legal right to use a designated part of someone's land for a particular purpose.
ENCUMBRANCE
A burden or charge registered on the title to the property such as a mortgage
FEE SIMPLE
The highest interest in land that can be owned by an individual.
GOODS (CHATTELS)
Goods or articles that can be removed from the property without causing damage.
FIXTURES
Items such as built-in cupboards, bath, toilet, stove etc that cannot be removed without causing damage.
LAND TAX
A state government tax payable by owners of a property (normally not their permanent place of residence) based on the value of the property.
LEASE
An exclusive right to occupy land owned by someone else.
LICENCE
A non-exclusive right to occupy land owned by someone else.
TRANSFER or INSTURMENT
A document signed by the vendor and the purchaser that when registered by the Lands Department legally changes the ownership of the land. Usually referred to as simply the 'Transfer'. (Not to be confused with the Contract).
REGISTERED PROPRIETOR
The person whose name appears registered on the Certificate of Title as owner (proprietor of land).
RIGHT OF WAY
A right which gives a person access across certain land. (Usually land owned by someone else).
STRATA TITLE
This is the name given to the ownership of units, townhouses, villas. It is a form of Torrens Title.
SURVEY
Conducted by a registered surveyor who provides a written report showing the position of the buildings and fences in relation to the boundaries and will show any encroachment onto the land or onto the neighbour's land.
TORRENS TITLE
This is the name given to a system of recording ownership of land. It is the most common form of land Title and the cheapest to convey. When you are registered on Title you are guaranteed ownership by the State Government.
VOI
IMPORTANT NOTICE
VOI was implemented Australia wide from 1 July 2015.
Buying and or selling property can be one of the biggest decisions made in life, and we understand the stress and uncertainty it can place on you.
Over our 26 years we have not only expanded but streamlined our services so we can take a lot of the stress and pressure out of Conveyancing by doing the running around and work that other Solicitors & Conveyancers will make you do!
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