FROM THE BLOG

The following information is written to be read in conjunction with our pre-contract advice email. It provides general information that applies to most property purchases including your cooling-off rights, the vendor’s obligations regarding keys and cleaning, and information on any stamp duty concession or exemption that you be entitled to.

Offer Process

In Victoria, most estate agents will require you to submit your offer buy completing and signing a copy of the contract of sale. If your offer is agreeable to the vendor, they will also sign the contract, binding you to the agreed terms of sale. Accordingly, it is important to ensure that your offer contains the entire understanding and the whole agreement between you and the vendor relative to the sale of the property. If you intend to pay your deposit next week, or your offer is to be subject to finance or a building inspection, ensure that the contract correctly reflects these details.

Cooling Off

If you purchase this property at, or within 3 clear business days of a publicly advertised auction date, cooling off provisions will not apply. Further, cooling off does not apply if you have previously entered into a contract for the same property with substantially similar terms, or if you are an estate agent, corporate body, or for properties used primarily for industrial, commercial or farming purposes. In all other cases, notice of cooling off must be made in writing within 3 clear business days of your offer. If you exercise your right to cool off in the time permitted, you will be entitled to a refund of your deposit save for 0.2% of the purchase price.

Properties Sold in Current State

Properties in Victoria are sold as is/where is, subject to any defects, illegal building works, incorrect boundaries, and non-working appliances. You should undertake your own due diligence by examining whether any structures or improvements appear to have been built within the last 7 years, measuring the land to the nearest intersection, and testing and documenting the working status of goods before signing any contract. Further, you should not rely on any representations or warranties made by or on behalf of the vendor, so if the estate agent has told you the property is within a particular school zone or that the heating/cooling works, check it out for yourself or write it into the contract.

Risks for Purchases

Before entering into a contract for the purchase of a property, the vendor is required to provide you with a statement containing the required information under section 32 of the Sale of Land Act. This statement includes information about property outgoings, building permits, easements and building notices. If the statement contains an error, a purchaser is automatically entitled to damages or termination of the contract unless the vendor was intentionally dishonest. There have been cases where a certificate in the section 32 statement was incorrect, the vendor’s circumstances changed before settlement, or the vendor’s conveyancer failed to correctly prepare the document, which resulted in purchasers being liable for thounds of dollars of extra costs, or unaware council had previously rejected applications to further develop the land. The liklihood of situations like this arrising are highly unlikely, and it’s not financially practical to do a full search of certificates on every property before placing an offer. You can try and make a contract subject to a due diligence period allowing us to complete searches immediately after your offer is accepted, or a condition that entitles you to remedies shold any disclosure in the section 32 statement be innacurate at settlement. It may be unlikely the vendor would agree to such offers, as they open them up to additional risks.

Stamp Duty and First Home Owner Grant

If you’re unsure whether you are entitled to a stamp duty concession or exemption, or qualify for the first home owner grant, please discuss the entitlement with us. Qualifying properties for both the first home owner grant and off-the-plan duty concession changed in recent years. To qualify for the first home owner grant, the property must be brand new, having never been occupied or previously transferred as a new home. Changes to the off-the-plan concession now limit the dutiable value to $550,000 (fixed percentage or alternative method) and the property must be your principal place of residence

Use of Land

If you intend to develop the property, extensivly renovate, install a swimming pool, operate a home-based business, remove any vegetation, or carry out any other improvements, it is your responsibility to familiarize yourself with the relevent zoning and overlay restrictions and requirements and ensure the property is suitable for your particular needs. Kindly note that consultation as to the current or future use of the proeprty does not form part of our advice, and any questions relating to planning requirements should be directed to council or a surveyor. Further, you should enquire with council as to whether any relevent planning or building applications have previously been rejected for this proeprty.

Goods Sold with the Land

The particulars of sale will specify what (if any) goods are being sold with the land and fixtures. It is your responsibility as purchaser to ensure that the particulars of sale correctly record what goods you require to included with the sale, noting that just because an item is affixed to a wall (such as a TV or antenna) does not make them fixtures. To adequately protect yourself, we recommend listing the goods as including “all fixed floor coverings, electrical light fittings, window furnishings, TV antenna, dishwasher, solar panels (if applicable) and all fixtures and fittings of a permanent nature”.

Delivery of Property

Other than to deliver the property in the same physical condition at settlement as it was on the day of sale (save for fair wear and tear), there is no obligation on the vendor to clean the property. Whilst the vast majority of vendors do adequately clean the property at settlement, if it is essential to you that the property be professionally cleaned, consider making it a requirement of the contract, or allow sufficient time following settlement to have your cleaners attend to the property. Further, the vendor may not have keys to windows or uncommonly used doors and accordingly such enquiries should form part of your due diligence.

Swimming Pools and Spas

Permanent swimming pools and spas are required to be registered with council and owners are required to have the safety barriers inspected every three (3) years to ensure the barrier is compliant. The cost associated with registration (if not already registered), obtaining a certificate of barrier compliance, and lodging the certificate with council will be your responsibility following settlement. If the property has a permanent swimming pool or spa, you will need to undertake your own due diligence as to whether the pool or spa is registered, and the barrier compliant with the applicable laws.

Caveat Emptor

Notwithstanding the vendor is required to make certain disclosures about the property, such as details of any permits or easements before entering into any contract of sale, a breach does not automatically entitle a purchaser to terminate a contract. Previously courts have sided with vendors who were not intentionally trying to mislead purchasers, or whether the solicitor or conveyancer made an error. Accordingly, it is important that you undertake your own enquiries and do not rely entirely on the vendor’s section 32 statement. Commonly, we find properties may be subject to land tax or vacant property tax which has not been disclosed in the sale documents, and for which you will be required to adjust on as part of settlement. Unfortunately, we can only review the documents given to us, and if an incorrect disclosure has been made, or the property becomes subject to a notice after the day of sale but prior to settlement, you will be responsible for these items. If you settlement is in a different financial or calendar year than the section 32 was prepared, you should further note it is likely property outgoings have increased, and the land may become subject to land tax.

Environment Mitigation Levy

To help offset the biodiversity impacts of land development on nationally threatened plants, animals and ecosystems, the Melbourne Strategic Assessment (MSA) Environment Mitigation Levy may apply to any land development. The levy amount varies depending on the location of the land and the threatened species in that area, and the levy usually arises upon the issuing of an occupancy permit. Further information can be found at: https://www.msa.vic.gov.au/

If you have any queries on the above information please contact us.