CONVEYANCING

Free Legal Information

for Queensland ONLY

We trust you'll find the following FREE information and tips useful.

Please remember:  This information is general in nature and should not be acted upon without first obtaining legal advice.  If you would like a referral to a Solicitor, please contact us.

This information is applicable to Queensland only.

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Selling a Property

Selling a Property - Legal Requirements

This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

In Australia the whole legal transaction of selling/buying a property is called 'Conveyancing'. The law sees the transfer of ownership in a property as important, and there is a process that must be followed by the Seller and the Buyer.

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If you are thinking about selling your property, please consider using our online conveyancing service. The service is fully interactive and includes full information on how to arrange the above requirements. For more information, click here.

This process is normally less involved for the Seller. Whereas the Buyer has to make sure that the Title to the property is clear, organize their finances, and prepare the transfer documents, the Seller's duties revolve around making sure that he can give good Title to the Buyer, arranging the payout of any mortgages over the property, and making sure that the correct money is received on settlement. The things that you as a Seller will do as part of a normal conveyance for Queensland property includes:

  • Listing your property with an Agent and signing an agency agreement (unless you are selling the property privately
  • Entering into a Contract of Sale. If you are selling a Unit or Townhouse, this involves making disclosure of various information about the unit and the complex in the Contract of Sale
  • Fulfilling any special conditions that are included in your contract
  • Signing the transfer documents that are sent to you from the Buyer
  • Providing the Buyer with 'clear title', that is, free of any encumbrances (apart from any that you have agreed with the Buyer not to release eg an easement). This normally means arranging the payout of any mortgages you may have on the property and in rare circumstances, releasing any Writ of Execution or Caveat that may have been placed on the property by an aggrieved third party.
  • Agreeing on the settlement figures and adjustments with the Buyer. This will mean paying any amounts owing on the property such as rates and land tax up to the date of settlement.
  • Giving to the Buyer vacant possession of the property after settlement (unless the Contract allows the Seller or a tenant to remain in possession)
  • Attending at Settlement to hand over any necessary documents and to collect your cheque· Paying the Agent (if any) commission

This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

For more detail on how QLD legislation regulates the relationship between Seller and Agent see our Article on Sellers and Agents - how the PAMD laws affect you.

LINK!!!

How to Sell your Property

What strategy you use to sell your property will depend a lot on the type of property you have, the Agent, and your own circumstances and preferences. You will need to choose a strategy when you list your property with an Agent, because the sales strategy selected will be written into your agreement with the Agent.

Your options include:

  • sale by auction
  • sale by tender
  • sale by fixed price

Quick Tip

Talk to a few Agents in your area before you settle on one of them. You can get invaluable insights on the different points of view of each Agent. Also, they will each have an opinion on the potential price that you can achieve for your property.

Auction

The auction process typically involves you placing the property with one agent exclusively for a period of time (normally 4-6 weeks). The property is strongly marketed and usually remains silent as to price, although sometimes a price range is included. Auction almost always involves an exclusive agency with one or possibly two agents. By giving an Agent an exclusive agency for the sale of your property, you are giving to them the monopoly rights to sell your property. This usually means that if the property is sold by yourself or another agent during the exclusive agency period, then your Agent can still get their commission (you therefore need to be very careful, because you could end up paying commission twice!)

Sale by Tender

Sale by tender works in a similar way. The property is marketed strongly, as with the Auction, and normally without a price (or only a broad price range). Interested parties do their searches and inspections, and submit written 'tenders' or offers before the due date. These offers are usually unconditional. On the closing date, all tenders are considered and the Seller can choose the highest tender. If no tender is considered high enough, then the Agent can go back to that tenderer and see if they are willing to increase their offer.

Some of the benefits of tender is that the bidding is kept confidential, with each bidder not knowing how close to the mark they are. Unlike with Auction, where you can seek to outbid rivals by offering small amounts more, in the tender you are literally 'blind' – you have no idea what your competitors have offered, The hope is that if you want the property badly enough, you will submit your best offer first, which may exceed greatly the amount of the second highest bidder!

In summary, auction and tender can be a great way to sell a property, particularly if it is unique (eg riverfront, or a unique style), or is in a 'high demand' area (where you have the real possibility of having a number of interested buyers). For more ordinary properties, you may prefer to consider the fixed price sale.

Fixed Price Sale

Sale by fixed price is still one of the most popular methods of sale for residential property. Setting a fixed price can be a tricky business, because if you set the price too high, you may not sell for some time. By the same token, if you set the price too low, you may short change yourself. Here are some tips on how to select the right price:

  • Talk to a number of Agents in your area, and get their ideas on price. Be mindful that some may be too optimistic in estimating the price, because they are hopeful that you will list with them.
  • Look at your property through the eyes of a third person – what are its good and bad points? Look at other properties that have sold (not that are listed but remain unsold!) – how do they compare with your property.
  • Look in the paper at the prices listed for properties in your general area. Go and have a look at a few and compare.

Sole Agency

Your Agent will tell you that they will work harder if they have the exclusive right to sell the property. This is because they will be more motivated to sell if they know that only they can be remunerated for the sale. There is definitely some truth in this, and many property owners now give a sole agency to one Agent for a period.

Consider making any sole agency period shorter than the normal 60 days. You can then end the agency in the shorter time frame, or if you are happy with the Agent, you can always extend the time period.

You should note however that you are then 'locked in' for this time period with that Agent, so if half way through you decide that you are not happy with their service, you may have to grin and bear it for the remainder of the sole agency period. NOTE: Under new Qld legislation, the Agent cannot lock you in for more than 60 days.

Open Listing

Listing your property with more than one agent means that you potentially reach many more buyers. However you do need to be careful about any confusion in marketing (for instance one Agent thinks you will accept $X, and that the Persian rugs will be included, while Agent Y thinks the price is $Y, and that the rugs are going).

Also, you need to consider, if there is any advertising, which agent will be in charge of this? Open listing can work, but often it has been my experience that Agents put these properties at the bottom of their list of priorities. A more common form of sale, which is a restricted type of open listing, is the sale in conjunction. I have seen this to work quite well. It involves asking your main Agent if they will accept sales in conjunction with another agent, usually one other that you specify. This is particularly useful where you really like two different Agencies and can't make up your mind which one to go with. The main Agent is still the one who does the advertising, and is the 'controller' of the process, so confusion is minimized. Keep in mind however, that the two Agents will have to split their commission.

This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

When you list your property with an Agent, you will almost always be asked to sign an Agency agreement. This is a written contract and not just a 'listing' notice – so you need to read it carefully to make sure that you are happy with its terms.

Many clients of mine have not realized this. They can't even remember really signing anything in particular, probably because they were so focused on the fact that they were listing their property for sale. But I have seen disputes arise between Sellers and their agents, particularly regarding commission and other payments, so you should give this agreement the importance that it is due.

Normally the Agent's agreement will cover the following: The amount of commission payable – In Qld this is normally in accordance with the scale fee set by the Qld Real Estate Institute. Some States, such as NSW, have a deregulated system which allows you to negotiate the commission below the scale fee – you should check with your particular authority.

In Queensland, the scale fee is 5% on the first $18,000 of sale price and 2.5% on the balance. This fee can be negotiated down, but in practice I have rarely seen this done.

Quicklaw has developed a Commission calculator based on the Qld scale fee. CLICK on the button below. You will then go to a pop up screen which contains the calculator. Simply type in the sale price of your property and press Calculate.

 Agent's Commission Calculator

When the commission is payable – The commission is normally payable once you have sold the property and actually received the sale monies. The commission is usually taken out of the deposit after settlement, with any balance of the deposit being sent to you after settlement by the Agent. If the deposit is not enough to cover the commission, then the Agent will ask you for the balance from the sale proceeds.

You should also be aware that there are some situations where you must pay the commission even if you don't sell your property. You need to check your agreement to see when this could occur. For instance, there is often a clause in sole agency agreements that if someone else sells the property during the sole agency agreement (even if you sell it to a relative), commission is still payable in full. Also, I have often seen clauses in these agreements that make full commission payable in situations where you enter into a Contract, but it falls through because of the buyer's default or 'wrongdoing', and you are able to forfeit the deposit. In this case the Agent has been able to rely on this clause and take the whole commission, which is often equal to the amount of the deposit. This leaves the Seller with nothing, and a house that is still not sold!

QUICK TIP

It is a good idea to get enough deposit to cover the commission. Click on the Commission Calculator above to see see how much deposit is needed to cover the commission.

Advertising and Marketing Costs – You should request the agent to give you a marketing plan that sets out the type of advertising they will conduct and the time frame for that marketing. The total cost of the marketing campaign should be included in your agreement, along with the payment terms (eg to be taken out of sale proceeds, or payable upfront, etc).

The sales method (eg sole agency/multi list, etc) – The method of sale, along with the time frame that you are committed to the agency should be clearly stated. For a full discussion on this topic, see my section on Sales Methods - Pros & Cons

Sellers and Agents - how the PAMDA laws affect you

This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

Queensland and in particular South East Queensland, continue to be a growth 'hot spot' for property investment. The Property Occupations Act 2014 (Qld) seeks to regulate more closely property transactions in the sunshine state.

This article talks about how the law affects sellers and agents. For information on how the Act affects buyers, click here.

Selling Property

The Act regulates the seller's relationship with the real-estate agent, requiring the agreement to be in writing in a special form and to include certain disclosures and information.

The Act recognizes 3 different types of listing:

  • Open listing – under this arrangement you sign a contract with an agent but you can also list with other agents or even sell the property yourself. Commission is then only payable to the person who actually brings about the sale (if it is you, then you don't pay commission to anyone).
  • Sole Agency – a sole agency is an exclusive one (that is you cannot employ other Agents during the sole agency term). However you can still sell the property privately, without paying commission
  • Exclusive Agency – this type of contract between seller and agent is the most restrictive as it entitles the Agent to commission whether or not they sell it, or you or another agent sells it during the exclusive agency term.

For more information on the pros and cons of different types of agency agreements, see our Article Sales Methods - Pros & Cons.

Irrespective of which way you want to list, the Agent must put the agreement in writing using the prescribed Form (Form6). For all listings. This form sets out the terms of the agreement between Seller and Agent, including which listing type is selected, a warning to receive independent legal advice, the term of the agreement, and the fees involved. For more information on Agent's commission, see our article The Agent - Commission, Expenses and Agreements.

For sole/exclusive agencies, the term of the agency cannot be longer than 60 days (this term can be extended, but only during the final 14 days of the term). This is a significant change to the previous law, which did not restrict the agency term, and exclusive agencies were traditionally 90 days long.

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Although you do not have to get independent legal advice, it is a good idea to get a Solicitor to look over the Agency agreement, given that the commission is large.

Failure by an Agent to comply with the above regulations means that the Agent may not be entitled to claim his/her commission.

When does the Seller have a definite Contract?

This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

Introduction

The Property Occupations Act 2014, provides a cooling-off period for Buyers on all contracts for the purchase of residential property in Queensland. A Buyer can terminate the contract within a period of 5 working days after the cooling off period commences.

NOTE: The cooling off period does not apply to AUCTION sales of residential property. However if the property is passed in at auction, and the buyer and seller negotiate a contract afterwards, then the cooling off period will apply.

When does the Cooling off period start?

The Cooling Off period starts from the date that the Contract becomes 'binding on the Buyer'. This date may not be noted on the Contract. The Legal date is actually the date that all Buyers receive a physical copy of the Contract (which has been signed by the Buyer and Seller). If that day is a weekend or public holiday, the cooling off period starts on the next business day. It ends at 5:00 pm on the fifth business day after that.

It is a good idea to keep evidence of when the cooling off period starts. For example, the seller or their Agent could deliver the contract personally to the Buyer and ask for a notice of receipt, or they could send the contract by fax and keep the fax transmission statement.

What are the Seller's rights if the Buyer wants to terminate?

The Buyer can terminate the contract during the 5 day cooling off period by giving the Seller or their Agent a signed written notice. The Buyer can only terminate the Contract during that period, so check the start and end date to make sure they are in time.

If they are in time and they have given written notice, then they can legally terminate the Contract. As Seller, your only right then is to charge the Buyer the 'cooling off' penalty – which is 0.25% of the purchase price. If you would like to know what the amount could be, insert a purchase price in the calculator below.

 Cooling Off Penalty Calculator

Where a contract is terminated by a buyer within the cooling off period, the seller must refund the deposit within 14 days, but the seller can deduct the termination penalty.

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Make sure you get at least enough deposit from the outset to cover the penalty amount, this will mean that it is easier to recoup the penalty if the Buyer did decide to terminate.

Can the cooling off period be waived?

Yes – as a Seller you may want the Buyer to waive the cooling off period (for instance, because you have other commitments that require you to have an unconditional Contract). Or as a Buyer you may feel that by waiving your right to the cooling off period, you will get a price or other advantage in getting the property.

To waive or shorten the cooling off period, the Buyer needs to give written notice to the Seller before entering into the Contract.

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As a Seller and in practical terms, you may decide that it is simply too hard to get the cooling off period waived or shortened. By the time the other conditions are met (such as finance and building report) the cooling off period is likely to be over anyway.

Strata Title - the Seller must 'bare all'

This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

When you own or want to buy a Unit or Townhouse, you need to consider the special legal nature of that type of property, that doesn't apply to an ordinary house & land situation.

This is because a 'strata titled' complex consists of not just one dwelling, but many (from the normal '6 pack complex' to a unit complex of 100s of units). Whether you buy into a small complex or a large one, there are certain principles that generally apply, as follows:

  • You own your unit and the airspace encompassing that unitv You have an ownership share, along with all other unit holders, in the common property surrounding the unit (such as a pool, grounds, common stairwells, etc)
  • There are rules which govern your use of the Unit and the common property, called Body Corporate rules
  • A body corporate (comprised of a committee of owners) is responsible for the maintenance and other matters relating to the complex
  • Body Corporate levies are struck for each unit, and the amount depends on your lot entitlement. There are normally two levies that are payable on a periodic basis: The administrative levy (for general maintenance, such as maintaining lawns, etc) and a sinking fund (for major expenditures, such as painting and large repairs).
    		•

    QUICK TIP

    Before selling a Unit/Townhouse, make sure that any resolved disputes or settled problems within the Body Corporate are recorded in writing on their roll. If they aren't it can cause problems later when the Buyer searches the records and thinks that there are ongoing problems.

      Disclosure by the Seller

      You will be asked by the Agent to complete a disclosure statement, which sets out the body corporate fees payable, insurance details for the complex, provides details on the Body Corporate Secretary/Manager and discloses various matters that the law feels that the Buyer should be made aware of. You can get this information from your Body Corporate Secretary, but you may have to pay a fee.

      The disclosure statement must be provided to the Buyer before they sign a Contract.

      The REIQ Contract for Units and Townhouses also require further disclosure on key areas relating to the complex and the body Corporate. The reasoning behind the disclosure rules is to give notice to the incoming owner (Buyer) of any problems/disputes with the Body Corporate or the unit owners. Failure to notify the Buyer of these things in the Contract can allow the Buyer to terminate after signing.

    Selling a property with tenants in it

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    A. The procedure

    If you decide to sell a property that you own which is tenanted, you can, but you need to follow certain procedures. They are listed briefly below:

    • Firstly, the Seller or their Agent needs to give the tenant a Form 10 (Notice of Lessor's Intention to Sell Premises). This form is signed by the Seller/Agent. The form includes the address of the property to be sold and a section on the sales strategy that the Seller will employ (eg open house each Saturday for 6 weeks, then an Auction on site on a specified date, etc).

      Each time the Seller/Agent wishes to show the property to a prospective Buyer, they must serve another form (Form 9 Entry Notice) on the tenant, and giving at least 24 hours notice. The Form 9 is signed by the Seller/Agent and must be given each time that they want to access the property.

      These forms are available for downloading from the Residential Tenancies site at www.rta.qld.gov.au.

    • You can continue to charge the full agreed rental for the property (the law does not require you to reduce the rent whilst the property is on the market, even though it may inconvenience the tenant).

    B. Selling with or without tenants?

    This is a commercial decision for you to make – some Agents will say that it is much easier to sell a property without tenants in it, because the law requires the Seller/Agent to give 24 hrs notice whenever they want to bring through a prospective buyer. Also, if your tenants are not tidy or co-operative, they may hinder the sale of your property.

    However against these considerations you need to also weigh up the fact that whilst your tenant remains in the property, you continue to receive full rent.

    Another consideration is whether a prospective Buyer is likely to want vacant possession of the property, or whether it is more valuable (return wise) as an investment property which is tenanted. For instance, an expensive house in a family area is more likely to attract owner occupiers, whilst a Unit in a large complex may be more likely to be purchased as an investment.

    Buyers who want to live in the property will want vacant possession on settlement, and you need to determine BEFORE you sign a Contract whether you can legally do this.

    Generally the rule is:

    • If your tenants are NOT on a fixed term tenancy (for instance if they have continued to rent the property beyond the period initially stated in the tenancy agreement), then you can terminate the tenancy by giving two month's written notice (Form 12 Notice to Leave) on the tenants or 4 weeks notice once you have signed a Contract to sell. So your settlement date needs to be longer than that to make sure your tenants leave before settlement.
    • If your tenant is on a fixed tenancy then the tenants can remain in the property until the tenancy period to expires. If that period still has a distance to run, then you can either make the settlement date longer (so it goes past that date) or the Buyer will have to buy the property subject to the tenancy (they will be entitled to the rental payments from the date of settlement until the tenancy period expires).

    Smoke alarms

    This information has been provided by Australian Conveyancing Services and is applicable in Queensland only.

    Introduction

    Legislation in Queensland has made it compulsory for all homes built before July 1997 to have a compliant smoke alarm installed (smoke alarms were already a legal requirement for homes built after 1997).

    Obligations on the Seller

    The practical effect on the Seller is you are obliged to ensure the house or unit you are selling has compliant smoke alarms installed at the time of making the Contract or at least ensure it is done prior to settlement.

    Minimum legal requirements state a smoke alarm, at least with a nine volt battery be installed on or near the ceiling on all levels of a building. Further information on the types of smoke alarms available and where to install them is available at the Queensland Fire and Rescue Service website at www.fire.qld.gov.au.

    The Seller must also advise the Buyer in writing that the compliant alarms are installed. The REIQ Contract includes this statement. You will need to tick the relevant box whether the smoke alarm is installed or not.

    Alternatively you can:

    1. insert a statement into the special conditions section of your Contract that "a Compliant Smoke Alarm, as required under the Fire and Rescue Service Legislation, is installed", or
    2. if the Contract is already formed insert a statement in your first letters to the Buyer or Buyer's solicitors.

    The Seller cannot contract out of their obligation to install the smoke alarms.

    In the event smoke alarms are not installed or you fail to inform the purchaser one is not installed, you risk a fine of up to $375.00.

    The Rights of the Buyer

    Any house or unit/townhouse you contract to purchase must have compliant smoke alarms installed prior to settlement. This has to be done by the Seller at their cost.

    For more information on what needs to be done visit the Queensland Fire and Rescue Service website at www.fire.qld.gov.au.

    The Seller must also disclose to the Buyer that compliant alarms are installed. If you are using a REIQ Contract, the Seller will have checked the relevant section to state whether an alarm is installed in the property.

    NOTE: The Seller cannot contract out of their obligation to have smoke alarm(s) installed.

    If you as Buyer do not obtain this disclosure in writing you should ensure you follow this up with the Seller, as this may have serious implications for you if a smoke alarm is not installed by the settlement date. If you are not informed or alternatively informed the building does not comply with the smoke alarm regulations and you proceed to settle the Contract regardless, the legal obligation to install the appropriate smoke alarm will fall to the Purchaser upon completion of the Contract. In the event that smoke alarms are not installed you risk a fine of up to $375.00.

    Swimming Pools new Compliance - Selling a property QLD

    Pool owners have until 30 November 2015 to comply with the pool safety laws, or earlier if they sell their property before this time.

    If selling a property with a non-shared pool, such as a house or townhouse or unit with its own pool or spa, a pool safety certificate must be obtained from a licensed pool safety inspector.

    The owner can provide the buyer with a pool safety certificate prior to settlement or alternatively the seller must issue the buyer with a Notice of no pool safety certificate—Form 36 before entering into the contract of sale and before settlement.

    This form advises the buyer or pool owner that they have 90 days to obtain a pool safety certificate from the date of settlement. The buyer or pool owner is then liable for any costs associated with achieving compliance, unless otherwise negotiated as part of the Contract.

    Purchasing a Property

    Purchasing a Property - Legal Requirements

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    In Australia the whole legal transaction of buying/selling a property is called 'Conveyancing'. The law sees the transfer of ownership in a property as important, and there is a process that must be followed by the Seller and the Buyer.

    This process is normally more involved for the Buyer than the Seller. The Buyer has to make sure that the Title to the property is clear and this is an important task, as it involves doing various searches of the property. Also the Buyer is responsible for drafting up the transfer documentation and stamping it, as well as organizing their finances.

    The things that you as a Buyer will do as part of a normal conveyance for Queensland property includes:

    • Entering into a Contract of Sale. You need to ensure that any special conditions that you need in the Contract are inserted. Normally the Real Estate agent will draft up the Contract for the parties, but it is always advisable to get a Lawyer to look over the Contract before you sign
    • Fulfilling the Buyer conditions that are included in your contract. For instance, Building or Pest inspection reports, and finance
    • Talking with your Financier to make sure you get any moneys you are borrowing by the settlement date, and signing mortgage documents
    • Arranging the necessary searches over the property
    • Drafting the transfer documents. If you are using the Quicklaw conveyancing service, our award winning program helps you to draft the documents.
    • Stamping the transfer documents

    • Attending at settlement to hand over the balance purchase price and to get various documents you need to transfer the ownership (if you have a Financier, they will attend at settlement as well and take these documents on your behalf)
    • Go to the Titles Office and lodge your documents for registration of the transfer of ownership (if you have a Financier, they will do this on your behalf)

    QUICK TIP

    If you are thinking about buying a property, please consider using our online conveyancing service. The service is fully interactive and includes full information on how to arrange the above requirements. For more information, click here.

     

    Buyers - how the new PAMDA laws affect you

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    Introduction

    The Property Occupations Act 2014, dictates what additional forms are required when buying or selling a property in Queensland. It contains important rules regarding cooling off and for Real estate agents.

    This article talks about how this law affects buyers. For information on how the Act affects sellers click here.Sellers & Agents LINK

    Purchasing Property

    This legislation states that prior to entering into a contract that you must review and sign certain other disclosures and warning. This enables you as the Buyer to be fully aware of your rights and obligations under the contract which you are about to enter. There forms are set out below.

    1) PAMDA Form 8 – Agent's Disclosure

    This form requires the Agent to disclose any relationship or benefit they have with any other party that they referred you to (for instance if they have referred you to a financier, or their own Solicitor). The form is designed to give you full disclosure of who the Agent is referring you to and why.

    You will need to sign this form as Buyer.

    2) PAMD Form 30c – Warning Statement (to obtain independent legal advice and valuation "discontinued")

    This Statement is now included in the REIQ Contract and  that it recommends that you do certain things before you sign the Contract.

    These important matters include:

    • A recommendation to seek independent legal advice
    • A recommendation to get a valuation of the property you are intending to buy
    • It talks about the cooling off period, when it starts and finishes.
      See our article on Cooling Off Period LINK Cooling off period - Cost of changing your mind

    You should read the warning statement carefully before signing.

    We recommend that you purchase the Quicklaw kit prior to entering into the a contract to purchase as the kit will take you through these forms in greater detail while informing of your rights and obligations under the contract.

    Cooling off period - Cost of changing your mind

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    Introduction

    Whilst it is a good idea to check things out before you sign a Contract, the law in Queensland provides you with a 'cooling off period' after you sign the Contract. When does the Cooling Off Period apply?

    Buyers have a cooling-off period for Buyers on all contracts for the purchase of residential property in Queensland. This means that a Buyer can terminate the contract within a period of 5 working days after the cooling off period commences.

    NOTE: The cooling off period does not apply to AUCTION sales of residential property. However if the property is passed in at auction, and the buyer and seller negotiate a contract afterwards, then the cooling off period will apply.

    When does the Cooling off period start?

    The Cooling Off period starts from the day after the legal date. The legal date is the day that the Contract becomes 'binding on the Buyer', which is the day that all Buyers receive a physical copy of the Contract (signed by the Buyer and Seller). This date may not be noted on the Contract (i.e. it is not necessarily the Contract date). The Contract must be received before 5.00pm on the legal date for that day to count as the legal date. The legal date can be a weekend or public holiday. The cooling off period starts on the next business day. It ends at 5:00 pm on the fifth business day after that.

    Example: If the legal date falls on a Tuesday, the cooling off period will end at 5.00pm on the following Tuesday.

    It is a good idea to keep evidence of when the cooling off period starts. For example, the seller or their Agent could deliver the contract personally to the Buyer and ask for a notice of receipt, or they could send the contract by fax and keep the fax transmission statement.

    Penalties

    A buyer may terminate within the cooling-off period by giving a notice in writing to the Seller or their Agent. This is an absolute right and no reasons need to be given, however, there is a cost to terminating. If a buyer terminates under the cooling-off period a "termination penalty" must be paid to the seller. That termination penalty is 0.25% of the purchase price under the contract. If you would like to know what the amount could be, insert a purchase price in the calculator below.

     Cooling Off Penalty Calculator

    Where a contract is terminated by a buyer within the cooling-off period, the seller must refund the deposit within 14 days, but the seller is permitted to deduct the termination penalty.

    Waiver of cooling-off period

    The cooling-off period can be waived by a buyer but only before entering into the Contract. The Buyer will give written notice to  the Seller.

    The cooling-off period may alternatively be shortened using a similar procedure.

    Pre-contractual legal advice

    One could be forgiven for believing that now that there is a 5-business day cooling-off period that the importance of obtaining pre-contractual legal advice is minimal. That is not really the case. As we have seen, there is a cost in terminating under the cooling-off period.

    Obtaining pre-contractual advice from your solicitor could be as simple as arranging for the agent to fax the proposed contract through to your solicitor, and your solicitor providing advice and input to you over the telephone. If you are using the Quicklaw DIY service, you can have your Contract reviewed before signing for a small additional fee.

    Now, due to sales pressure or impulse resist the temptation to sign a contract prior to seeing solicitor.

    Joint Tenants vs Tenants in Common

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    When you purchase a property, you will need to sign a transfer document that will be registered with the particular State Government. If there will be more than one owner of the property, then you will need to state whether you are holding the property as joint tenants or as tenants in common.

    If you own a property as joint tenants, it means that:

    • You all own the property in equal shares
    • If one of the owners die, then their share automatically passes to the other owners (even if you have a Will that gives your share to someone else – your Will cannot override a joint tenancy)

    This type of ownership is most popular with married and long term defacto couples, as it is often their wish that if they die, that their share in the property goes to the other partner.

    NOTE: If you are buying a property that will be your major asset, and you have dependents (i.e. children from a previous relationship) then you may not wish to choose this option. This is because your only asset needs to be shared amongst your children as well as your partner, should you die. There are other ways to get around this, however. For instance, you could take out life insurance, so that in the event of your death you could leave your share in the property to your partner, and the proceeds of your life policy to your children.

    QUICK TIP

    I recommend that you get legal advice before you select whether you will hold as joint tenants or as tenants in common. This is because that decision is tied up with your Estate matters (that is, how you would like your property to be distributed if you were to die). It is quite expensive to change the way you hold a property after it is done, so now is the time to get it right.

    If you own a property as Tenants in Common:

    You can choose to own the property in equal shares, or unequally. For instance, if one of you have contributed more to the property than the other, you could hold shares of say, 1/3rd and 2/3rds)

    If one of the owners die, your Will decides who gets your ownership share (it will not automatically go to the other co-owners as it would if you held as joint tenants) This way of owning a property is popular with owners who don't want their share to necessarily all go to the other owners. For instance, if you buy into a property with a group of friends, or with your business partner, etc.

    This way of owning a property is popular with owners who don't want their share to necessarily all go to the other owners. For instance, if you buy into a property with a group of friends, or with your business partner, etc.

    QUICK TIP

    If you buy a property as tenants in common, then make sure that you have in place a Will to deal with your share in the event that you pass away. Otherwise your share will not automatically go to your loved ones

    Stamp Duty

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    This discussion relates to the stamp duty requirements in Queensland for the purchase of residential property. Each State will have its own particular rules.

    Our Article covers the major general stamp duty effects for residential property. However, you should contact the Office of State Revenue to confirm stamp duty liability for your particular situation.

    Stamp duty is payable on the transfer of ownership of the property, which is payable by the Buyer.

    In Queensland, you will need to pay stamp duty within 30 days from the date of your Contract. If you had any conditions in the Contract, (such as finance or building inspection), then the 30 days runs from when the Contract became unconditional (that is the date from which the last condition was satisfied).

    The amount you pay depends on your particular circumstances. If you will use the property as an investment, then you will pay the full rate. However if you are a homebuyer, you may be entitled to concessions. The QLD Government will grant concessional rates in certain circumstances:

    • First Home Buyers buying House and Land or Unit/Townhouse as their principal place of residence are eligible for sizeable concessions depending on the purchase price;
    • First Home Buyers buying Vacant Land to build their first home also may receive a concession;

    Click on our Stamp Duty Calculator below to calculate your applicable rate.

     Stamp Duty Calculator

    To qualify for the home owner's concessional rate (Principal Place of Residence)

    NOTE: This concession is not available if your Contract is dated 1 August 2011 or later.

    To qualify, you need to satisfy the 3 conditions below:

    1. You need to start living in the property as your principal place of residence: within 12 months from the transfer date (the date you possess the property, which is normally the settlement date). Most buyers will move in immediately after settlement, but you don't have to. You have to be careful that you don't lose your concession if you decide not to move in immediately. You can leave the property vacant, OR for no more than 6 months you can rent it back to the Seller or leave the pre-existing tenant in there. But you cannot re-tenant it.

    2. You must remain living in the property for a minimum of 12 months after you first moved in. If you don't stay the full 12 months, however, you do not lose your concession entirely. The concession is pro rated based on the period you stayed (so for example, if you stayed ¼ of the year, then you retain ¼ of the concession, and so forth). You are required to notify the Commissioner and pay back the portion of the concession if you do leave earlier than the 12 months.

      Please note the following additional points:

      • There is no longer a restriction on acreage owners – you can claim the concession on the full land provided that the land is not used for income generation.
      • If you are related to the Seller (eg by marriage or blood) then you will need to obtain an independent valuation of the property as to its market value. This will be the case even if you feel you are paying market value. Usually the Stamps Office will accept a letter of valuation from a Real Estate Agent.

      QUICK TIP

      In order to apply for these concessions, you need to complete a Stamp Duty Form 2.1. If you are doing your conveyance (purchase) through Quicklaw, this form is completed for you online.
    3. You must be an individual (over 18) not a company or trustee of a trust (some exceptions apply)

    To qualify for the first home owner's concessional rate (First Principal Place of Residence)

    A. Buying House and Land or Unit/Townhouse

    To qualify, you need to satisfy all of the above conditions (for a home owner) and in addition, satisfy the following:

    You must not have owned a house/unit/townhouse before (whether in Australia or overseas). If you owned vacant land or a commercial/industrial property, then you still qualify for these concessions as long as you haven't received a first home owner concession for the Vacant Land previously.

    B. Buying Vacant Land

    To qualify, you must satisfy the following conditions:

    • You have not owned a house/unit/townhouse before
    • If you have owned vacant land before you did not receive a first home owner concession for it
    • Within two (2) years after settlement, you will have constructed your first home on the land
    • To get the full concession you must then occupy the home for at least twelve (12) months
    • You must be an individual over 18 (not a company or trust)

    Paying the Full Rate of Stamp Duty

    If the property is for investment purposes, or you do not meet the above concession criteria, then full stamp duty rates are applicable (even if you have never owned a property before).

    Other Concessions and Grants

    First Home Buyers - you may also be eligible for the First Home Owners grant.

    Buyers building/purchasing a new home - there may be other Government concessions and grants available from time to time, and you should make your own enquiries.

    Strata Title - Buying into a family

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    When you buy into a Townhouse or Unit complex, you need to consider the special legal nature of that type of property, that doesn't apply to an ordinary house & land situation.

    This is because a 'strata titled' complex consists of not just one dwelling, but many (from the normal '6 pack complex' to a unit complex of 100s of units). Whether you buy into a small complex or a large one, there are certain principles that generally apply, as follows:

    • You own your unit and the airspace encompassing that unit, but not the external walls
    • You have an ownership share, along with all other unitholders, in the common property surrounding the unit (such as a pool, grounds, common stairwells, etc)
    • There are rules which govern your use of the Unit and the common property, called Body Corporate rules
    • A body corporate (comprised of a committee of owners) is responsible for the maintenance and other matters relating to the complex, and has it's own individuality (with the right to sue and be sued)
    • You pay to the Body Corporate certain levies, and the amount depends on your lot entitlement. There are normally two levies that are payable on a periodic basis: The administrative levy (for general maintenance, such as maintaining lawns, etc) and a sinking fund (for major expenditures, such as painting and large repairs)

    I have seen many unit complexes and body corporate situations, and each does have its own particular 'personality', which is largely dependent on the character types of owners and how they interact. Just like with a normal family – some are rowdy, some always arguing, some peaceful and stable, so too are various body corporates. If you get a good group of owners and a competent Body Corporate, you will be happy, but a constantly bickering or inflexible Body Corporate can make life very unpleasant. Take a look at the following real life examples:

    Example 1: Bonnie was an elderly lady who bought a Unit on the ground floor of a Complex that contained 19 other units. The heat affected her so she wanted to install an air conditioning unit in her bedroom (the type that sticks out of the window/wall). The Body Corporate was a tough one run by a dictatorial Manager, who did not want the outside walls 'defaced' by unsightly projections. Bonnie had to stick to a fan.

    Example 2: George and Meredith owned a Unit that was part of a '6 pack'. Most of the owners used the Units as holiday homes a few times a year, although there were one or two retired owners who lived there permanently. George wanted to put up a lattice wall at the front of his Unit to give him some privacy from the road. The Body Corporate readily agreed and George erected the wall.

    Read the Body Corporate family 'diary' before you buy!

    The body corporate is required by law to keep a written record of its various dealings. This includes its budgets and forecasts of expenditure, correspondence in and out, and also the Minutes of meetings with its members.

    These records read like a 'diary' and can tell you very quickly whether the Unit/Townhouse experiences trouble between the owners or has other problems. The Minutes of the Annual General Meetings are particularly helpful in this regard. This meeting is held once a year and all Unit owners can attend. At that meeting, anything of relevance to the complex is discussed, and decisions made on what to do. Looking at the Minutes gives you a good 'snapshot' of what went on – are people generally agreeable? Or are there many disputes and disagreements? How reasonable are the participants? Are there ongoing battles?

    QUICK TIP

    Before buying into a Unit complex, it pays to conduct a Body Corporate search to see if everything is fine in the body corporate records. Things to look out for are disputes amongst owners, any litigation against the complex, and any major expenditures coming up that the sinking fund can't cover.

    If the member of the family don't get along, or there are other problems (such as large expenditures coming up or litigation) then you may not want to buy into this.

    By looking at the records before you sign, you can avoid walking into trouble – not all problems that appear after you sign allow you to terminate after you sign (for instance if there is a long history of bickering, disputes or poor management of the complex).

    Insurance - the Buyer carries the risk

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    When you sign a Contract to buy a House/Unit or Townhouse, the risk for the improvements on the property passes to you as Buyer (on 5pm of the next working day) under the standard REIQ Contract.

    So it is very important that you arrange for insurance to cover any potential damage to the property.

    Most insurance agencies can organise a cover note for you over the telephone or Internet. If you are getting finance for the property, be sure to note your financier as the mortgagee on the policy. Some financiers will require you to get a formal insurance certificate before you settle and give them a copy.

    Exactly what insurance you need depends on whether the property is a House or a Unit/Townhouse.

    Insurance for Houses

    Make sure that the value of all improvements are covered. Here is a handy checklist: /p>

    • The house itself. Make sure that it covers kitchens, bathrooms, curtains, light fittings and other fixtures. Fixtures pass to you as part of the property
    • peripherals, such as other buildings or things that remain outside of the house, such as garages, garden sheds, and pool equipment
    • any contents that you have agreed with the owner will stay (eg any furniture, etc)/p>

    Insurance for Units/Townhouses

    Although the Body corporate for the complex will most likely have insured the complex, this does not mean that the Buyer is safe.

    The insurance taken out by the Body Corporate normally only covers the exterior walls of the unit, the common property, and public liability for accidents on common property. The Buyer needs to fill in the insurance gaps.

    It is therefore a good idea to contact the Body Corporate to find out exactly what their insurance covers, and what it does not. Most Body Corporate insurances will not, for instance, cover the unit's contents, or public liability for accidents that occur within the unit.

    Buying a property with tenants in it

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    When you buy a property and the tenants are to remain in the property, then I recommend that you follow this procedure:

    Before you sign the Contract, talk to the Seller or their Agent who manages the tenancy to make sure that the tenants are regular payers and that they keep the property in good condition. If they are not good tenants, look at whether they are on a fixed term tenancy or simply a periodic tenancy. If fixed term, how much longer does the term have to run? If periodic, then you can ask for vacant possession in the Contract (Seller needs to give 4 weeks notice after contract signed).

    On settlement, some of the items that you should collect from the Seller include: The tenancy agreement (as signed by the previous Landlord (the Seller) and the tenant

    • A copy of the condition report (if one exists)
    • Bond transfer form
    • A letter from the Seller addressed to the Tenant directing them to pay the rental to the new Landlord (the Buyer)

    You will also need to adjust the settlement figures for the rental, and collect keys from the Seller/Agent (as your Landlord's copy).

    For more information on residential tenancies in Queensland, visit the Residential Tenancies Authority site, which provides a host of free information at www.rta.qld.gov.au

    Property Searches - How many? How much?

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    When you are buying a property, one of the major things that will need to be done as part of the conveyancing process is the property searches. These searches, which are done in Queensland normally after the Buyer has signed a Contract are designed to find out if there are any problems with the property or the Seller that would materially prejudice the Buyer. That way, the Buyer knows before they hand over the money at settlement, because afterwards it is too late to complain.

    QUICK TIP

    If you are ringing around for conveyancing quotes, one sure way to know if the service provider is cutting costs is to ask about the number of searches that they will do. If they are not doing the standard ones mentioned below, they are not doing a thorough job. REMEMBER: You get what you pay for!

    Because the purchase of a property is such a significant investment, it is wise not to skimp on the number of searches that you do.

    Standard Property Searches done in Queensland

    The standard property searches that most Solicitors will do for you if you are buying a property (and the ones that Quicklaw recommends and are included in the DIY conveyancing service) are:

    • Title Search – this search gives you the correct description of the property, confirms who the true owner is, and tells you about any encumbrances over the property
    • Registered plan search – this search gives you a copy of the plan for that property (showing you the shape and size) and its position in the street
    • Contaminated land search – this search tells you whether the property you are buying is included in the Qld Government contaminated land register (for instance if it was previously a mine or dump or some other operation that contained hazardous substances)
    • Land Tax search – this search tells you if the Owner owes any land tax in relation to the property. If the owner did not pay it before settlement, the monies due would pass on to you as the new owner
    • Bankruptcy/Company search – tells you if the owners are bankrupt/wound up – if so, they could not hand over the ownership of the property to you without the Official Receiver in Bankruptcy's approval.
    • Queensland Transport search – ascertains whether the property will be affected by any road planning, Airport Noise and Bike-ways proposals.
    • Local Authority search – what is included in this search will vary from Council to Council, and the cost will also vary. Normally, the search includes a wealth of information, including the rates position, whether the Council has any requirements or requisitions over the property, building approvals and non approval, and information about whether the property is affected by flooding, and the existence and whereabouts of drainage and other pipelines over the property.
    • Water search – this search will reveal what, if any, fixed access and sewerage charges apply to the property, as well as any outstanding charges for Water Consumption that may be owing. You may also be able to obtain a special water meter reading to give you up-to-date information on usage. Depending where the property is located, this search will either be done through Council or a separate Water Authority such as Urban Utilities.

    For Units and Townhouses:

    Some additional searches are standard – they include:

    • Body Corporate Adjudicators search – to see if there are any claims regarding the Body Corporate by any of the Unit Owners
    • Body Corporate Inspection of Records Search – this is a physical inspection which is done to see what body corporate levies are owing, the insurance, and a host of information about the goings on in the Body Corporate (eg disputes, any litigation, budget forecasts, etc)

    Cost of Standard Searches

    The search outlays will vary depending on the Local Council search, but the following is a rough guide:

    Vacant Land:

    $350 to $400
    House and Land:

    $400 to $450
    Unit/Townhouse:

    budget on around $500 to $600

    Additional Searches that may be required:

    Energex

    When there are major power lines nearby, or you believe a tower may be built near your property.

    Town Planning Search

    Confirms the zoning of your property, which may be relevant if you intend to substantially re-develop the property you have purchased. (NOTE: this can be an expensive search).

    Building Approvals Search

    If you want to check whether additions to the property eg decks, swimming pools, have been approved by Council.

    Heritage Search

    If you believe that the property may be listed on the heritage register (for historically significant properties).

    Easements & other such encumbrances (if noted on your title search)

    A search will reveal the nature of the encumbrance.

    QLD Transport Search

    An important search to do if your property is near a railway line. The search will tell you if Qld Rail or other government or major road department has any plans that affect the property.

    Survey Plan (offline)

    When you are unsure of the property's boundaries, particularly useful in inner city areas where houses may not be built entirely within actual boundaries.

    Underground Cables - Let the Buyer beware

    This information has been provided by Australian law firm, Australian Conveyancing Services and is applicable in Queensland only.

    In the last 10 years we have seen a surge in communication services, including the Internet, more mobile phones and pay TV. All of these communications are serviced by underground cables, so their presence in residential back yards are also increasing.

    The standard conveyancing searches carried out by Solicitors for the Buyer of a property will not discover the existence of any underground cables. This is because communications carriers have special powers granted under the Telecommunications Act which permits them to lay cables without the need to take out easements which show on Title Deeds.

    The carrier who wants to lay cables over private property, must notify the Owner of the property and compensate that Owner for any loss that they suffer as a result of the installation. But subsequent owners do not get any compensation and do not need to be notified by the Carrier of the cable's existence.

    With the presence of cables affecting property now estimated to be 3-5% and growing, it is recommended that property buyers (or owners wanting to do work on their property) conduct an underground Telco search as part of their searching procedure. (Statistic quoted from Pronet Consulting, Telco searchers).

    The cost of finding underground cables on your property after settlement can be very high:

    • If you dig it up, then you're up for the repair bill or worse
    • You are restricted in what you can do over that part of your property
    • The Carrier has the right to enter to maintain and repair their cable

    QUICK TIP

    Get a Telco search done. The costs is $55.00 but it protects a major investment. The best time to do the search is before you sign a Contract.

    Getting the cable relocated is one option, but this can be expensive.

    Smoke alarms

    This information has been provided by Australian Conveyancing Services and is applicable in Queensland only.

    Introduction

    Legislation in Queensland has made it compulsory for all homes built before July 1997 to have a compliant smoke alarm installed (smoke alarms were already a legal requirement for homes built after 1997).

    Obligations on the Seller

    The practical effect on the Seller is you are obliged to ensure the house or unit you are selling has compliant smoke alarms installed at the time of making the Contract or at least ensure it is done prior to settlement.

    Minimum legal requirements state a smoke alarm, at least with a nine volt battery be installed on or near the ceiling on all levels of a building. Further information on the types of smoke alarms available and where to install them is available at the Queensland Fire and Rescue Service website at www.fire.qld.gov.au.

    The Seller must also advise the Buyer in writing that the compliant alarms are installed. The REIQ Contract includes this statement. You will need to tick the relevant box whether the smoke alarm is installed or not. Alternatively you can: insert a statement into the special conditions section of your Contract that "a Compliant Smoke Alarm, as required under the Fire and Rescue Service Legislation, is installed", or

    if the Contract is already formed insert a statement in your first letters to the Buyer or Buyer's solicitors.

    The Seller cannot contract out of their obligation to install the smoke alarms.

    In the event smoke alarms are not installed or you fail to inform the purchaser one is not installed, you risk a fine of up to $375.00.

    The Rights of the Buyer

    Any house or unit/townhouse you contract to purchase must have compliant smoke alarms installed prior to settlement. This has to be done by the Seller at their cost.

    For more information on what needs to be done visit the Queensland Fire and Rescue Service website at www.fire.qld.gov.au.

    The Seller must also disclose to the Buyer that compliant alarms are installed. If you are using a REIQ Contract, the Seller will have checked the relevant section to state whether an alarm is installed in the property.

    NOTE: The Seller cannot contract out of their obligation to have smoke alarm(s) installed.

    If you as Buyer do not obtain this disclosure in writing you should ensure you follow this up with the Seller, as this may have serious implications for you if a smoke alarm is not installed by the settlement date. If you are not informed or alternatively informed the building does not comply with the smoke alarm regulations and you proceed to settle the Contract regardless, the legal obligation to install the appropriate smoke alarm will fall to the Purchaser upon completion of the Contract. In the event that smoke alarms are not installed you risk a fine of up to $375.00.

    Swimming Pools new Compliance QLD buying a property

    Pool owners have until 30 November 2015 to comply with the pool safety laws, or earlier if they sell their property before this time.

    If buying a property with a non-shared pool, such as a house or townhouse or unit with its own pool or spa, a pool safety certificate must be obtained from a licensed pool safety inspector.

    The owner can provide the buyer with a pool safety certificate prior to settlement or alternatively the seller must issue the buyer with a Notice of no pool safety certificate—Form 36 before entering into the contract of sale and before settlement.

    This form advises the buyer or pool owner that they have 90 days to obtain a pool safety certificate from the date of settlement. The buyer or pool owner is then liable for any costs associated with achieving compliance, unless otherwise negotiated as part of the contract