SELLING A PROPERTY IN QUEENSLAND? WHAT SHOULD YOU DO BEFORE SIGNING?
Property transactions are complex and contain a myriad of legal issues. It is important that you seek legal advice before you sign a contract. Some of the issues to be mindful of include, but are not limited to:
1. Matters to consider before signing
- Name on the contract: Ensure your name on the contract matches that on the title search, including any middle names or ACNs if the selling entity is a company.
- Check the purchase price and deposit are correct. The deposit should not exceed 10% of the purchase price.
- Check timeframes for finance, building & pest and any other conditions match what you have agreed.
- Review any inserted special conditions. We recommend seeking legal advice on the drafting.
- Check you have made all necessary disclosures in the contract and/or disclosure statement. Not making proper disclosure may give a buyer rights to terminate. We recommend seeking legal advice if you have any concerns.
- Check the tenancy section of the contract is completed correctly if tenants will remain in the property following settlement, otherwise you will be required to provide vacant possession at settlement.
- Ensure the settlement date is correct. If you have a mortgage to discharge, ensure your bank can meet this timeframe. Under the standard REIQ contract, either party may extend the Settlement Date by up to five business days by giving notice to the other party, without the need for the other party to agree. You should take the possibility of an extension into account particularly if settlement on the nominated date is critical to you or your plans (e.g. you are relying on the sale proceeds to complete another transaction).
2. Time critical steps you will need to complete after signing a contract
- Request any mortgage to be discharged. You must make arrangements with your financier for any mortgage over the property to be released at settlement. Most financiers have strict timeframes that you will need to comply with.
- Obtain an ATO Clearance Certificate. If you are selling a property for $750,000.00 or more, each seller must apply for and obtain a clearance certificate from the ATO, otherwise the buyer’s solicitor is required to pay 12.5% of the purchase price to the ATO at settlement. These certificates can take 28 days to obtain.
- If the property is sold with vacant possession, you must ensure that any tenancy has been brought to an end and possession delivered by the tenant prior to settlement. Minimum periods of notice will generally apply to the termination of a tenancy.
- If your sale proceeds will not be sufficient to cover the mortgage payout, ensure you have discussed the situation with your conveyancer so they can make arrangements for funds to be transferred into trust ahead of settlement.
3. Cyber fraud
If you are required to make any payments in association with the transaction, you should first call the relevant party to verify the account details over the phone. When calling to check payment details, you should only use a phone number for the relevant party which is verified from a source that is different to the communication containing those details.
4. Time is of the essence
Time is of the essence of the Contract which means that both parties to the Contract must perform their obligations strictly by the due date. A failure to act in time in relation to a date relevant to the transaction may mean the buyer can terminate the contract or you may lose rights under the contract.
5. If you are SELLING at auction
If you are selling at auction, you should ensure that the contract and all warranties and disclosure are accurate before the auction. This is because you will be bound by the contract on signing the contract on auction day. We recommend that you:
- Confirm the correct details to be inserted on the contract; and
- Arrange for any searches to be done before the day of auction (with sufficient time for them to be returned) to check any warranty or disclosure issues.
