1328 properties sold last week. 674 auctions reported with an 83% clearance rate. This weekend there could be as many as 900 auctions. Whilst this spike may be caused by the AFL Grand Final, anybody thinking the market is going to slow down need only look at the figures. There is nowhere near enough stock to placate the demand.
Buying property is not as easy as putting up your hand at an auction. Although knowing how much to pay, as well as when to make an offer, is paramount in securing the property, there are many other things to check prior to “signing on the dotted line”
The vendors’ statement is only part of the documentation that you will need to have checked by a solicitor. This document, commonly called a “section 32” as it involves section 32 of the Sale of Land Act. It summarises 8 key points about the property for sale and is the minimum piece of information that is required by law to be given to the prospective purchaser.
The main items in a vendor’s statement are:
• title details
• any restrictions including covenants and easements
• Planning and road access details
• Building approvals and owner building insurance
• Services
• Outgoings and Statutory charges
• Owners Corporation details
• Notices
Many solicitors will put proof of this summary in the form of certificates but they do not have to.
The second and sometimes more important document is the contract that, with the vendors statement, forms the Contract of Sale. Sometimes this will be a standard law institute or REIV contract. These both use very standard clauses that most solicitors think are adequate for the job.
The contract will have a place for both parties to sign, a particulars page specifying names, amounts, settlement dates, solicitors’ details, goods to pass with the property, terms, encumbrances and few other details.
However, some solicitors will present many special conditions. These can be simple, onerous to the prospective purchaser or ridiculously one sided in favour of the vendor. To not get these checked and get a “legal opinion” would be absolutely flirting with disaster. There have been clauses that have stated that if the purchaser has not paid the deposit within ten minutes of the fall of the hammer, the vendor has the right to sell the property anytime, to anyone up to settlement without compensating the purchaser. I don’t think I have ever been to an auction that we have signed the docs and paid the deposit within ten minutes of the fall of the hammer. Whilst the reason for the clause is simple, the winning purchaser must “immediately” sign the docs and pay the deposit, not wander off for a couple of hours and this is fair, the way the clause is written, it would be ludicrous for a purchaser to sign the document.
This is just one example and there are plenty. Most contracts are written to be so one sided in favour of the vendor that they should be deemed unconscionable. Unfortunately not enough prospective purchasers complain and therefore nothing is usually done.
This is just one very small part of purchasing a property. If you are purchasing yourself, make sure you have the docs checked by a solicitor or a licensed conveyancer.
Ian James
