Buying and selling residential property
Whether you are buying or selling property, it is essential to understand your legal rights and responsibilities. These are largely governed by legislation and regulations that aim to balance the interests of each party during a conveyancing transaction.
A written contract containing the terms and conditions of sale with prescribed disclosure documents must be available before a property is marketed. The vendor must give certain warranties regarding the property, however purchasers will need to undertake their own additional investigations to ensure the property meets their needs and there are no underlying defects.
Once contracts are exchanged, and subject to any pre-conditions or cooling-off rights, the parties are legally bound to fulfil their obligations under the agreement. The significant penalties that apply for failing to complete, or breaching essential terms, emphasises the importance for sellers to have a complying contract in place and for buyers to ensure they have carried out all due diligence for the property before entering the agreement.
Buying off the plan
Buying off the plan involves purchasing a property that has not yet been built or land that has not yet been subdivided. An off the plan purchase may not settle for two to three years after negotiations.
Contracts are usually lengthy and contain many conditions and variables such as a series of completion dates providing a buffer to allow vendors additional time to finish the project and complete the contract. The contract also allows for variances in design, size and finishes subject to permissible limits.
Buying a strata unit
Owning a strata title property means that you will hold title to an individual lot as well as sharing the use and responsibility for common areas such as stairways, lifts and gardens.
After completion, a strata lot owner becomes a member of the owners’ corporation which is responsible for managing the strata scheme. This encompasses matters such as financial management, arranging insurance and repairs and maintenance to common property. Additional ongoing financial obligations must be factored into the purchase – these may be significant, particularly where repairs and maintenance to common property are required.
Strata properties also have by-laws which regulate matters such as carrying out renovations, noise, parking and the keeping of animals. These matters should be fully investigated before purchasing.
Buying or selling at auction
An auction occurs when interested purchasers register to bid publicly for a property. The person or entity with the highest bid, subject to a reserve price, becomes the purchaser on the day of the auction and contracts are immediately exchanged and the 10% deposit is payable. The purchase has no statutory cooling-off rights and the transaction proceeds through the usual conveyancing steps.
Auctions are regulated by legislation and the agent conducting the auction must maintain specific records and conduct the auction in accordance with the regulations.
Property ownership interests and rights
The manner in which a legal interest in property is held can impact other areas of law such as succession and estate planning, and is an important consideration when disputes arise.
Property held between co-owners as joint tenants is held as a whole – the interests cannot be apportioned into specific shares and the joint tenancy is subject to survivorship provisions. When one co-owner dies, his or her share automatically passes to the remaining owner/s. It cannot be left to anybody else, even if the deceased owner’s Will provides otherwise.
Property held as tenants in common can specify the individual shares held by each owner which need not be equal and may be transferred, sold or left to a beneficiary in a Will.
Property disputes are usually triggered by changing circumstances – a relationship or business breakdown, financial stress or the death of a co-owner. It is important to obtain advice regarding ownership interests when purchasing property with a co-owner, or when disputes regarding legal interests arise.
Subdivisions
A subdivision involves the partition of land into smaller parcels, ranging from the division of a single lot into two, to the creation of numerous lots in a large residential or strata development. Once subdivided, a title is created for each new portion of land which can be separately sold and transferred.
Land subdivision is governed by legislation, regulations, planning schemes and policies administered by local councils and other government bodies. Subdivision developments are complex, and it is important to understand the overlap of the relevant laws, and the processes required to achieve the proposed objectives of a project and to avoid costly mistakes.
Collaborating with an experienced property lawyer and surveyor to check off due diligence matters, liaise with relevant authorities, and to prepare and explain titling and legal concepts is invaluable throughout this process.
Easements
An easement is a right to use property belonging to someone else – it may be a private easement, such as a strip of land giving neighbours access to their property, or a public easement such as one for the maintenance of sewerage or electricity services.
Easements can restrict the use and future development of land and effect its value, and their proper investigation forms part of the due diligence process.
Large property developments usually require the creation of new easements and / or the variation / removal of existing easements. Changes to existing easements must be negotiated with the relevant landowners and identified on the proposed plan of subdivision and accompanying legal documentation.
Commercial and retail leasing
A commercial lease governs the relationship between a landlord and tenant regarding the tenant’s right to occupy premises owned by the landlord. Commercial leasing disputes usually arise because of poorly drafted, ambiguous or non-existent lease agreements, and / or the failure of the parties to properly understand their obligations under the lease.
Retail leases are commercial leases regulated by specific legislation which typically applies to premises within shopping centres or that are used wholly or predominantly for conducting a retail business. Retail leasing legislation aims to enhance consumer protection by stipulating minimum terms and conditions and limiting certain provisions deemed unreasonable for a tenant. The legislation also imposes certain disclosure obligations upon a landlord.
Landlords and tenants should obtain appropriate advice to ensure their negotiations are properly reflected in a lease agreement, and the provisions comply with relevant legislation.
Conveyancing and property law deals with a range of matters that can be quite complex and involve significant investment. Our property team has a wealth of knowledge and experience to ensure our clients are properly informed and their legal rights protected during a property transaction.
If you need any assistance contact one of our lawyers at [email protected] or call 02 9818 2666 for expert legal advice.