1. Not properly identifying the property
Purchasers have been known to buy the wrong property, for example subdivision of featureless land where it can be very difficult to identify the lot as you view it compared to the one shown on the plan. A survey solves this problem as well as ensuring if you are buying an existing home that it is constructed on the land that you are purchasing.
2. Not checking the use you intend for the property is permitted by council
Are you able to subdivide? Can you build a duplex? Are the premises able to be used for commercial or business purposes?
3. Assuming that the property has legal access
This is particularly relevant when purchasing in older areas or rural properties. Just because the existing owner appears to have a right of way, may not mean a legal entitlement exists or is the same as that which is presently being used.
4. Failing to consider who is to be the purchaser
Whether it be an individual, you and your partner together, or a company or trust, it is important to consider the possible tax, stamp duty and or inheritance consequences of these decisions. A mistake can be costly.
5. Not being aware of the tax consequences of the purchase or sale
Is the transaction a taxable supply that attracts GST? Is the GST included in the price? Is there Land Tax owing by the vendor and are you liable to pay it under the contract? What are the Capital Gains Tax consequences to you if you are selling? You need to be aware.
6. Not properly investigating the state of repair of the building
Buyer beware, after exchange there is no going back except in exceptional circumstances if the building is defective in some way. This is also applicable to strata property where you as the owner are required to contribute with the other owners to necessary repairs to the common property. This is why pest and building reports are strongly recommended.
7. Failing to have sufficient funds to complete the purchase
Sensibly, finance should be unconditionally approved prior to exchange of contracts to avoid the risk of default and forfeiting the deposit and perhaps being sued. Frequently purchasers are also selling and are relying on those funds to complete their purchase. The trap is if your sale falls through there may be no funds to complete your purchase unless your solicitor has protected your interests in timing when contracts are exchanged or you had arranged alternative finance.
8. Not paying insurance after contracts have exchanged (if selling)
Vendors are responsible for the property until settlement so it is important that you maintain valid insurance until then. If you are purchasing and go into early occupation the risk then passes to you and the property must be insured. If it isn’t insured and something happens, you suffer the loss.
If you are the successful bidder you are bound to sign the contract as soon as the hammer falls and contracts are then immediately exchanged. It is vital that you have the contract explained to you beforehand and you make full investigation of the state of repair of the property amongst other things. You must also ensure finance has been arranged. There is no cooling off period and you are bound to complete the purchase or be sued for damages if you do not.
10. Not making a final inspection prior to settlement
Arguments frequently occur over the condition of the property when the purchaser takes possession. To avoid these difficulties, a purchaser should make the final inspection just prior to completion to ensure all is well.
Paul Carver, a Law Society Accredited Business Law Specialist with over thirty one years experience, heads our property and commercial team who will carefully guide you through the property minefield with ease and professionalism to help relieve the pressure and stress on you.
- Keep you informed of every step.
- Return your phone calls by the end of the day at least, if we are otherwise unable to answer your enquiry when you call.
- Attend to your matter promptly and professionally. We don’t cut corners.
- Provide you with the highest standard of service available. If we let you down we want you to tell us and we will fix the problem promptly.
- If you are selling, we will have a draft contract to your selling agent by close of business the same day if the listing advice is received prior to midday to enable your agent to prepare for marketing of your property.
- If you are purchasing a property, we shall contact you the day we receive a sales advice from your agent to ensure that your purchase proceeds as quickly and efficiently as possible.
Our specialist solicitors are also able to identity issues that may arise in areas such as Capital Gains Tax, Goods and Services Tax & advise you in respect of any Stamp Duty implications, Trusts or Corporate issues which may otherwise go unnoticed.