The legal requirements of buying a home
Buying a home is an exciting time but there are some legal requirements you should be aware of. Knowing these before the buying process will help you a great deal and assist you with being more organised:
Contract of Sale
The Contract of Sale is the document which once signed, confirms the sale of the property. It can also be used by potential buyers when they submit an offer through a private treaty sale.
The Contract of Sale includes:
- Details of the property
- Names of the seller (vendor) and buyer
- Details of the real estate agent and legal representatives involved (buyer and seller)
- The price
- The deposit required
- The settlement period and balance owing at settlement
- Any special conditions such as ‘subject to building inspection’ or ‘subject to finance’
The Section 32 is provided by the seller to an intending buyer. It outlines certain information that vendors are required to provide prior to the Contact of Sale being signed.
The Section 32 is a legally binding document and must be factual and accurate. It typically contains the following information but this may change depending on the type of property and requirements
The property’s title.
- Zonings and any planning information.
- Declarations (e.g. if the property is in a flood prone area).
- Any outgoings, such as rates.
The Section 32 does not include any information about condition of buildings so you should also consider getting independent advice and obtain a building and/or pest inspection from a qualified inspector.
What’s the difference between a Solicitor and a Conveyancer?
When a property changes hands the process is called ‘conveyancing’. Conveyancing can be managed by a solicitor or a conveyancer.
Conveyancers specialise in conveyancing work, whereas solicitors can assist with conveyancing and also have broader knowledge of the law in general, which means that they can advise you on issues in addition to the conveyancing.
Solicitors can be more expensive than conveyancers, given their broader legal knowledge and expertise. You should consider your situation and the complexity of the purchase when deciding between a conveyancer and a solicitor.
Joint Proprietors vs Tenants in Common
When you sign your Contract of Sale, if you are purchasing the property with somebody else, you will be asked to specify whether you are ‘Joint Proprietors’ or ‘Tenants in Common’.
In a Joint Proprietor situation, if one owner dies, ownership of the property will automatically transfer to the survivor(s). However, Tenants in Common hold shares (equally or otherwise) in the property and each has the right to dispose of their interest as they desire.
These are just some legal requirements of buying a house. Being aware of these will make your buying process smoother and ensure you avoid any nasty surprises!