As some of you may be aware, land transactions have been moving over to an electronic platform called PEXA. This involves the settlement and registration of a land transaction into the new owners and mortgagee’s name, instantaneously on settlement.
It is anticipated that by 1 July 2019, electronic settlements will be compulsory in NSW.
All paper titles of land held by about 150 banks were converted to electronic certificates of title called eCT’s in September this year. The conversion of the titles was undertaken by the banks and other financial institutions, the NSW Land Registry Services and the legal and conveyancing peak bodies with many people working behind the scenes for months.
As there are now over 2 million eCT’s and more solicitors and conveyancers becoming registered PEXA subscribers, there is a greater chance of your purchase or sale being settled through the PEXA system.
If you own a property and have a paper title, how do you deal with your land if you wish to sell it?
Currently in the paper world, if a person wanted to sell their land or give consent to their title being used, they would physically hand the title over to the party who wishes to use it, or produce the title at the Land Registry. In the world of eCT’s, there is no physical paper title to hand over.
Under the PEXA system, a registered proprietor is given the Control of the Right to Deal (“CoRD”) and this is where the registered owner has the authority to consent to the registration of a subsequent interest in land.
If land is mortgaged, the registered proprietor has the right to deal with their land but the control of that right to deal (CoRD) is held by the first registered mortgagee (the bank) or party in legitimate possession of the certificate of title. A mortgagee now provides a CoRD Holder consent electronically in transactions.
If land is not mortgaged, the registered proprietor has both the right to deal and the CoRD and provides CoRD holder consent to that transaction.
In order for a vendor to deal with a paper title and use the CoRD, they need to contact a PEXA subscriber.
Everingham Solomons is a registered PEXA subscriber and we are continuing to extensively invest in training our solicitors and staff to ensure a seamless transition.
At Everingham Solomons, we aim to provide expert advice and manage your transaction with due speed and minimum inconvenience to you, because Helping you is Our Business.
Click here for more information on Suzanne Hindmarsh.
There are many terms which might sound quite foreign when you sell or purchase real estate property. For instance, you will often hear the terms “latent defect” and “patent defect”. For many, this may be the first time you have heard these terms. So, what do these terms actually mean and how should they impact your decision making when selling or purchasing property?
A “latent defect “is one which a purchaser is unable to reasonably discover upon an inspection of the property. A “patent defect” is one which a purchaser, who inspects a property with reasonable care, ought to see or discover.
A defect may be either a title or a quality defect. A defect in title is an interference in the vendor’s ability to perform their obligation to transfer the title under the Contract, being the subject matter of the sale (including the improvements). A defect in quality affects the quality of the land and/or improvements. Whilst a defect in quality may affect the value of the land, or the use to which the land or improvements on the land may be put, it does not interfere with the vendor’s ability to transfer the title. For example, use or zoning of the land, physical defects in the land or improvements (i.e. structural defects, pest infestation, land contamination, etc.).
A vendor is only obliged to disclose to a purchaser latent defects in title. In respect of all other defects, being patent defects in title and quality, and latent defects in quality, the rule is caveat emptor or “let the buyer beware”.
A vendor’s failure to disclose a latent defect in title may entitle the purchaser to terminate the Contract, if sufficiently serious. Accordingly, it is important that defects are classified correctly. However, such distinction is not always easy to make. It may be prudent for a vendor to disclose the defect in the Contract with an acknowledgment by the purchaser that the disclosure has been made. This not only assists the purchaser with their inspections of the property and decision making, but also provides more certainty to the vendor by limiting the purchaser’s right to object or assert other rights regarding the defect.
You should discuss any potential defects in the property with your solicitor. Feeling overwhelmed by the terminology used in conveyancing transactions? Contact the friendly and experienced team at Everingham Solomons because, Helping You is Our Business.
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This is a question commonly asked by both buyers and sellers. Exchange occurs when a seller and buyer enter into a legally binding contract with each other. For a residential property, the following list explains some of the actions required after exchange.
For a buyer:
We prepare the transfer electronically. This allows the land to be transferred from the seller to the buyer after settlement.
We prepare Requisitions on Title. This is a set of questions about the land title the seller is required to answer for the buyer.
We order searches which may include some of the following: Council rates enquiry, State Rail Authority enquiry and Roads and Maritime Services enquiry.
We request a cheque for payment of stamp duty. We electronically stamp the contract and transfer and pay the stamp duty to the NSW Government.
Confer with your financer and satisfy their requirements
We prepare the settlement statement. This statement shows the purchase price, deposit and the adjustment of rates and other costs. The settlement statement is provided to the seller’s solicitor/conveyancer requesting the required breakup of the settlement monies for the seller.
We notify the Australian Taxation Office if GST withholding tax is required on settlement
We arrange the electronic settlement with your bank (if applicable) and the seller’s solicitor/conveyancer and seller’s bank (if applicable).
At the time of settlement, the transfer, Certificate of Title, seller’s mortgage (if applicable) and the buyer’s mortgage (if applicable) is lodged electronically at the Land Registry Services.
For the Seller:
We arrange for your bank to prepare a discharge of mortgage (if applicable)
We assist you to answer questions about your title asked by the buyer.
Obtain land tax certificate
We receive from the buyer settlement figures which are checked by us in consultation with you.
We obtain a Foreign CGT clearance certificate if required
We arrange the electronic settlement with the buyer’s conveyancer/solicitor and with your bank. Your bank provides the payout figure to discharge the mortgage.
We request from the buyer’s solicitor/conveyancer the monies required on settlement.
The next step is what is known as settlement or completion, which is when the actual sale or purchase is finalized and legal title of the land is transferred from the seller to the buyer.
Our conveyancing team is able to help you with the business of buying or selling a property to make the process as smooth and simple as possible, because at Everingham Solomons, Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
In order for residential property in NSW to be advertised for sale, a Contract for the Sale of Land is required to be prepared. Whether you decide to sell your property through a real estate agent or privately, you are still required by law to have a Contract prepared. It is therefore important that vendors understand their obligations, especially in situations where vendors have privately listed their property for sale via an online platform.
Briefly speaking, a Contract consists of terms and conditions together with mandatory prescribed documents.
There are numerous terms and conditions contained in the Contract which are standard form, however, can appear quite daunting. Accordingly, vendors should approach a qualified solicitor or licenced conveyancer to assist in the preparation of their marketing Contract, at the earliest opportunity. Further, most solicitors and conveyancers also insert certain special conditions into the Contract, to protect a vendor’s interests and to assist in the selling process.
Also contained in the Contract are prescribed documents. These include, but are not limited to, title and plan searches of the land together with a zoning certificate and sewer diagrams. Any further documents recited on the title search are required to be attached to the Contract. For instance, documents relating to any easements, rights of way, restrictions on the use of land, etc. If a swimming pool is located at the property, a valid certificate of compliance or non-compliance, or relevant occupation certificate is also required to be annexed to the Contract.
It is important that the Contract is correctly prepared prior to the property being listed for sale to ensure the transaction is processed with due speed and minimum inconvenience to all parties. In particular, vendors should check that the improvements, inclusions and exclusions (if any) are correctly recorded in the Contract. Vendors should also carefully review the title and plan searches, and other prescribed documents to ensure they accurately depict the property. Addressing errors or omissions at the first opportunity avoids the added stress of attempting to deal with such issues once other parties become involved.
Having a Contract which is not properly prepared can have dire consequences. For example, a Contract which does not comply with legislation, entitles a purchaser to withdraw from the sale prior to settlement.
At Everingham Solomons, we strive to provide our clients with timely, proper and expert advices because Helping You is Our Business.
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A Building Information Certificate is issued by the Local Council for the whole or part of a building. The certificate is a confirmation from Council that Council will not issue an order, or take proceedings for an order or injunction, for the repair, demolition, alteration, addition or rebuilding of the building. The certificate also provides a confirmation that Council will not initiate proceedings with regard to any encroachment by the building onto land either owned or controlled by Council. The certificate is issued for a specified period, being a period of seven (7) years and only covers such matters which exist or occur at the time of issue of the certificate.
In order to apply for a certificate, an application must be lodged with Council. This application can be lodged by either:
the property owner;
a party with the property owner’s consent;
a purchaser under an exchanged Contract for the sale of the property including their legal representative; or
a public authority who has issued to the property owner a notice of their intention to apply for such certificate.
In addition, a Survey Report of the property together with payment of an application fee are required to be lodged with the application. Depending upon the building and surrounding circumstances, Council may request further information to support the application. Presently, the minimum application fee is $250 and this fee increases depending upon the classification of the building. A Survey Report of a standard residential property is a minimum cost of approximately $1,000 (fees vary between surveyors).
Those who should give serious consideration to obtaining a certificate include purchasers of property for which Council do not hold details of approval. For older properties, it is not uncommon for Council to not hold such details. Please note, purchasers seeking to apply for a certificate prior to exchange of Contracts require the consent of the property owner. For purchasers seeking to apply after exchange of Contracts, it is preferable to make the Contract conditional upon the issue of a satisfactory certificate.
Once the application for the certificate is lodged with Council, a mutually convenient time is scheduled for Council to inspect the building. Following the inspection, Council will either issue or refuse to issue the certificate. In the event Council refuses to issue the certificate, Council must notify the applicant and set out the reasons for its decision. Included in the reasons must be details of the work required to be undertaken to permit a certificate to issue. Depending upon the type of work required, this may result in additional costs.
Feeling overwhelmed by the intricacies of property ownership? Contact the friendly and experienced team at Everingham Solomons, where Helping You is Our Business.
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From 1 July 2018 the purchaser of ‘new residential premises’ will be required to withhold the GST amount from the purchase price on account of the GST liability of the vendor and pay that amount directly to the Australian Taxation Office (ATO) on or before settlement. This represents a change to the current regime where a vendor who makes a taxable supply of new residential premises is required to remit the GST to the ATO after lodging their BAS. Under the new regime, the responsibility for payment of the GST to the ATO shifts to the purchaser who will pay the GST liability of the vendor out of the purchase price of the property.
In general terms, new residential premises are defined in the GST Act to include residential premises that have not previously been sold as residential premises and
have been built, or contain a building that has been built, to replace demolished premises on the same land that are not created through a substantial renovation and are not commercial residential premises. “The exclusion of substantial renovations ensures that a purchaser does not have to determine whether renovations are ‘substantial renovations’ of the property, which may be difficult to assess at the time of purchase. Similarly, commercial residential premises are excluded to make it clear that a withholding obligation does not apply in relation to residential premises that are both ‘new residential premises’, and ‘commercial residential premises’”.
To help purchasers comply with their obligation to withhold, a vendor that makes a supply of new residential premises by way of sale is required to notify the purchaser in writing of certain matters before making the supply. This notification can be provided through the 2018 edition of the Contract for Sale of Land or in a separate document.
The new regime applies to sales of ‘new residential premises’ that are settled on or after 1 July 2018, unless the contract is entered into before 1 July 2018 and settlement occurs before 1 July 2020.
At Everingham Solomons we have the experience and expertise to assist you with all of your sale and purchase of property needs, because Helping You is Our Business.
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As of 13 March 2018 for the prevention of children falling from windows, strata schemes must have window safety devices installed on all applicable windows. If window safety devices are not installed by this date, owner corporations may face fines.
Which windows must be covered? Any openable window where the internal floor is more than 2 metres above the outside ground level and being a window that is less than 1.7 metres above the inside floor level. For example, where a lounge room is on the second floor with a large window taking up most of the external wall. This will need a window safety device on this window.
However, if you have a bathroom on the second floor where the window is only small and it is near the ceiling (1.7m or higher above the floor) it will not require a window safety device. Complying devices must also be installed on applicable windows in all common access areas, such as stair landings.
Under the Strata Schemes Management Regulation, 2016 Part 4 Property Management, Section 30, a window safety device is:
“(3) A screen, lock or any other device is a complying window safety device for the purposes of Section 118 of the Act if it:
* is capable of restricting the opening of a window so that a sphere having a diameter of 125 millimetres or more cannot pass through the window opening, and
* is capable of resisting an outward horizontal action of 250 newtons, and
* has a child resistant release mechanism, in the case of a device that can be removed, overridden or unlocked.”
Residents with safety devices installed can still fully open their windows if they wish to do so, but it is strongly recommended that devices be engaged whenever children are present, to prevent falls.
The alternative is security screens, such as bars or grills on the windows so long as they have gaps less than 12.5 cm. Flyscreens do not comply unless they are the reinforced security type and capable of resisting the very strong outward pressure which would prevent a child falling through.
Please note that the owners corporation has the principal responsibility for the installation of window safety devices. Lot owners do however have the right to install window safety devices in their property at any time. However, lot owners would need to pay for the costs involved and must make sure the devices meet the legal requirements. Lot owners must notify the owners corporation within 7 days after completion of the installation. Lot owners who install devices are responsible for any damage to common property from the installation.
Tenants must get written permission from their landlord before installing locks that require drilling. Landlords cannot refuse a tenant’s request unless they have a very good reason.
At Everingham Solomons, we have the expertise to assist you in your property transactions because, Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
You’ve found a house you love, put in an offer and it’s been accepted! Time to break out the champagne? Not just yet….
One of the most important things to remember when buying a property is that the Contract is not binding on either the purchaser or seller until Contracts are exchanged. That is the contract, evidencing all of the important terms have been signed by both the vendor and purchaser and the contracts have physically been exchanged.
Agents are legally bound to pass on to owners all offers made up to exchange. This means that although your offer has been accepted, another buyer may also make an offer on the property. One of the following may then happen:-
The Vendor may decide to continue with the sale to you
If the second buyer’s offer is the same as yours you may end up in a ‘Contract race’ – essentially the first buyer to submit a signed Contract to the owners Solicitor/Conveyancer for exchange will be the successful buyer. In this scenario the most ‘organised’ buyer (with finance already approved etc) has an advantage.
If the second buyer’s offer is higher than yours you may be encouraged by the agent to increase your offer, or the owner might simply decide to sell to the buyer with the highest offer – this is gazumping, and unfortunately it is completely legal.
Contract races and gazumping are extremely stressful for buyers – after all, you really want this property!
So, how can you avoid ending up in a Contract race, or being gazumped?
The best advice is to be organised, so when you find your dream property you are ready to go.
Finance approval – go to see your bank or broker early and get pre approval. This will allow you to know your budget and give you confidence when making an offer.
Deposit – generally a cash deposit of 10% is required, although a reduced deposit or a deposit bond may be accepted by the owner of a property. Know how you are going to pay the deposit, and when you make your offer be ready to pay it straight away. The deposit can be paid any time up to exchange, but it is a great ‘sign of good faith’ to a Vendor when you pay it nice and early. You will get your deposit back if you don’t proceed to exchange.
Get Advice – before you make an offer get a copy of the Contract from the agent and have your Solicitor/Conveyancer have a look at it. This will alert you to any issues early on.
Inspections – decide what inspections you want to do on the property (eg Pest and Building Reports) and arrange these as soon as possible once your offer has been accepted.
Buying a property is an exciting, but often stressful time. Our Property Law Team is ready to assist you because Helping You is Our Business.
Earlier this year, Consolidated Pastoral Company (CPC), Australia’s largest privately owned cattle enterprise, hit the market sparking the all-to-often heard debate of whether this Australian agricultural gem will be snapped up by a Foreign Investor. In February 2018, the possibility of CPC being acquired by a Foreign Investor was made potentially harder when the Australian Government announced their new formal policy and guidelines to be applied by Australia’s Foreign Investment Review Board (FIRB) to proposed acquisitions of agricultural land by a foreign investor.
The Government indicated that these new rules were implemented in order to enable more opportunity for Australians to invest in agricultural land. However, the pending question is whether any domestic investors can compete against the wealth of the foreign bidders.
The new policy implements strict requirements that the proposed sale of agricultural land is to be part of an open and transparent public sales process. The FIRB must be satisfied that the sale was widely market to potential Australian bidders for a minimum of 30 days and that it can be shown there was equal opportunity for Australian bidders to make an offer for the property. If the agricultural land is subsequently acquired by a foreign investor, the purchaser will be required to demonstrate to the FIRB how they became aware of the property for sale and show that the acquisition was the result of an open and transparent sales process.
There is a handy exception to this requirement in that if the property has previously been marketed in an open and transparent matter over the last six months but has failed to sell, then a foreign investor can acquire it no strings attached.
It will be interesting to observe the sale process of CPC and its adherence to the new policy and guidelines. The first round of bidding opened in April 2018 and there is yet to be any announcements as whether a successful bid was offered.
If you have any queries relating to the government’s new policy on foreign investment, contact Everingham Solomons because Helping You is Our Business.
Under the Local Government Act 1993 (NSW), an on-site sewage system requires an Approval to Operate from the Local Council in order to be operated lawfully. For an Approval to Operate to issue, and to remain force, the system must be inspected by the Local Council. Councils are permitted to charge fees for these inspections. Depending upon the risk rating of the system, the period for inspections varies from every 1-10 years. The Local Government (General) Regulation 2005 (NSW) outlines performance standards and operational requirements.
It is the owner’s responsibility to ensure the system is registered and operating satisfactorily. It is recommended that owners undertake their own inspections, in addition to Council’s inspections, to ensue systems are operated satisfactorily. A failing system could result in contamination including risks to health and the environment.
If your system is identified by Council as failing, a letter of non-compliance, or other similar document, will issue outlining the rectifications works required. The rectification works are the responsibility of the owner. There is usually a time limit for completion of the rectification works which is dependent upon the severity of the risks.
Most Local Councils provide Factsheets on their websites outlining owners’ responsibilities including how to obtain approval, requirements for ongoing operation, inspection information, associated costs, etc. The NSW Office of Local Government provides a helpful booklet titled “The Easy Septic Guide”.
Initial steps owners of on-site sewage systems should take are:
Number 1: review performance standards and operational requirements, and arrange to undertake a self-assessment of your system; and
Number 2: consult your Local Council to ascertain requirements and inspection fees, and arrange an inspection (if not recently undertaken).
It is advisable for any purchaser of property with an on-site sewage system to request evidence of the approval or undertake inspections to confirm compliance. Accordingly, if you are selling property which has an on-site sewage system, you may wish to consult Council sooner rather than later to avoid any delays in exchange of Contracts once a purchaser is found. As the Approval to Operate is issued to the owner and not the property, purchasers should ensure that the Approval to Operate is transferred into their names following settlement.
For further assistance and for all your property needs, contact Everingham Solomons where Helping You is Our Business.
Click here for more information on Jessica Wadwell
As some of you may be aware, land transactions have been moving over to an electronic platform called PEXA. This involves the settlement and registration of a land transaction into the new owners and mortgagee’s name, instantaneously on settlement.
You’ve found a house you love, put in an offer and it’s been accepted! Time to break out the champagne? Not just yet….