Counting down to buying your first home
Posted on June 16th, 2020
Buying a house is one of the biggest investments most people will make in their life. The process can be very complex and often involves many variables. It can also be stressful, especially if it’s your first time.
When you are buying a property, you are entering into a contract with the existing owner of the property (the Seller) to buy that person’s “big investment” and therefore, both parties want to have their respective requirements properly dealt with.
The Law requires a contract for the sale of real property (vacant land, houses, units and townhouses) to be evidenced in writing. This means that the terms and conditions of any agreement for the sale or purchase have to be set out in writing. Documents exchanged between the parties, which sufficiently detail the terms and conditions of the sale and purchase, can constitute a binding contract at law.
Information or details such as full names of the Seller and the Buyer, the full legal description of the property, including the address, any matters affecting the property such as encumbrances or tenancies and easements, the sale price, the deposit to be paid and any conditions that the contract is to be subject to, including the relevant dates for satisfaction of these conditions, need to be specified and agreed upon by the parties, to potentially allow such an exchange of documents to constitute a legally binding contract. However, the best and the most common way of entering into a legally binding contract is for the parties to sign a formal Contract of Sale. The Real Estate Institute of Queensland and the Queensland Law Society have settled on a contract document for this purpose. This contract is generally regarded as being a contract that is fair and reasonable from the respective points of view of both parties. The contract document includes provision for all required information, as well as making provision for any particular special conditions which might apply. These contracts are generally prepared by the Seller’s Real Estate Agent but can also be prepared by legal representatives of the parties.
Any Special Conditions should generally be prepared by a solicitor to ensure that the matters required to be covered by the special requirements of a party are correctly addressed and any of the Standard Terms of the contract that might be changed by the special conditions are correctly deleted or varied.
If you are thinking of buying a property, Macdonald & Michel Lawyers can peruse your contract before you sign it to ensure that your requirements are properly addressed in the contract. We recommend that you ask the Real Estate Agent to forward a copy of the proposed contract to us, allowing us to review it and discuss it with you.
It is too late to seek or ask for changes to be made to a contract, once it is signed. Once the contract is signed by both parties, it is legally binding and it is only subject to any conditions set out in the contract. It can only be changed or varied, if both parties agree, something that a Seller will not necessarily agree to.
Most contracts for the purchase of a house are generally made subject to the Buyer obtaining a satisfactory finance approval and having Building and Pest Inspections undertaken by an inspector of the Buyer’s choice and the results of those inspections being satisfactory to the Buyer.
However, we also recommend that the contract should be made subject to a Council Building Compliance search being undertaken and that search result being satisfactory to the Buyer. This requires a special condition to be included in the contract to that effect. The idea of this search is to ensure that everything built on the land that requires Council approval has that approval and all conditions of the approval have been satisfied. If this is not done and you become the owner of the property and you subsequently find out that something such as a pergola or deck or carport is not Council approved, then you become responsible for getting that approval in place. This can be an expensive exercise.
Another issue to consider is whether the property is affected by an easement. The Seller is required to disclose to the Buyer if there is an easement which affects the property and if that is the case, then the Buyer needs to understand the effect that the easement may have on the property.
An Easement is a legal right that one person enjoys over the land of another person for a particular purpose. There can be some interference with the rights of the landowner. Easements can either benefit the land or burden the land, depending on the purpose of the easement. There are many types of easements, but the most common ones are for sewerage, drainage, water conveyance, electricity conveyance or right of way (access) purposes.
If a property is affected by an easement, then there are various searches that can be done to confirm exactly what the easement is and what effect it might have on the land. A Buyer needs to be aware of these things before agreeing to buy a property affected by an easement.
These are just some of the issues that can arise when buying a house property. This is why it really is crucial to seek legal advice about your proposed purchase and the contract before the contract is signed. We at Macdonald & Michel Lawyers can help you in this regard. Give our office a call and we can discuss the matter with you, review the contract and provide appropriate advice to you.
Macdonald & Michel Solicitors
07 4972 3644