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Buying & Selling Property

Frequently Asked Questions

 

These and similar questions need to be addressed at the earliest stage possible. The lawyers at SPM Law can assist in guiding you through this process.

Buying

1. Auctions?

Contracts formed by auction are different to most others. They usually have a number of standard conditions removed, will not be subject to finance and do not have a cooling off period. So it’s essential you have any questions answered and critical searches conducted before the date if you don’t wish to take the risk on the day.

2. Can I have “and/or Nominee” if I don’t know my buying entity?

Queensland has different duty regulations from other states and buyers should obtain advice from their accountant as to who the buying entity should be as “and/or nominee” clauses can result in double transfer duty being paid. These clauses can only be used in very limited circumstances.

3. Should my contract be subject to finance?

Organised buyers can make application for pre-approval from financial institutions. Pre-approvals are a good start however as the pre-approval usually requires a satisfactory valuation, buyer’s should be very cautious about entering a contract if the contract is not ‘subject to finance’.

4. What about the building and pest inspections?

A licensed inspector is required to conduct these inspections to provide these reports. If the reports are not satisfactory you can terminate the contract. However, you must act reasonably, and it can only be based on what is in the report. What is reasonable will depend on the circumstances of each matter and you should exercise caution before terminating a contract on this basis.

5. What are all these Warning Statements and Disclosure Statements?

There is a lot of legislation that is designed to protect consumers in the property area. Amongst other things, certain directions are required to be given to buyers before they enter into the contract and the contract must be presented in a particular way. Failure to comply with this legislation can result in a buyer being able to avoid its obligations under the contract. Unit contracts also need additional information to be provided about the Body Corporate and levies.

6. What is the cooling off period?

If the property is residential property, then unless you purchase at an auction, you will have a five business day cooling off period which begins when you receive a copy of the fully executed contract and expires five business days after that date. You are entitled to terminate the contract for any reason whatsoever during the five business day cooling off period by providing a specialised written notice to the seller (or the seller's solicitor) before 5:00pm on the last day of the cooling off period. In the event that you do elect to terminate the contract during the cooling off period you may be charged a termination penalty equivalent to 0.25% of the purchase price.

Selling

7. Does a seller have a cooling off period?

No. If the property is residential property then, unless you sell your property at an auction, the buyer will have a five business day cooling off period which begins when the buyer receives a copy of the fully executed contract and expires five business days after that date. The buyer is entitled to terminate the contract for any reason whatsoever during the five business day cooling off period by providing a specialised written notice to the seller (or the seller's solicitor) before 5:00pm on the last day of the cooling off period. In the event that the buyer elects to terminate the contract during the cooling off period the buyer may be charged a termination penalty equivalent to 0.25% of the purchase price.

8. Warning Statements, Disclosure Statements and Cooling Off periods

There is a great deal of legislation that is designed to protect consumers in the property area. Among other things, certain directions are required to be given to buyers before they enter into the contract, and the contract must be presented in a particular way. Failure to comply with this legislation could result in a buyer being able to avoid its obligations under the contract. Unit contracts also need additional information to be provided about the Body Corporate and levies.

9. What else do I need to consider?

Questions that need to be addressed when selling a property might include:

  • Are you selling the dishwasher, the pool cleaning equipment, or any other items?
  • For an investment property, is it subject to a lease or future bookings?
  • What is your GST position?


For the answers to these and any other questions you may have, please contact us.


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