This area of law concerns itself with the purchase and sale of Residential and Commercial property.
All matters associated with property issues are handled with the highest standards of professionalism and practical advice. The availability of your Solicitor and the ability to respond quickly are key elements of our practice. When these are married with our commitment to exceptional service and care for the client, you know you are in good hands. The following questions may answer some of the ones you may have on this topic.
Remember the largest single investment you are likely to make, is your home. Don’t risk it, use our professional services.
Selling a Property
What does Cutlers the Law Firm do when I am SELLING a Property?
The role of Cutlers The Law Firm is to prepare your sale Contract (ensuring it complies with the Vendor Disclosure Regulations as updated from time to time) and to ensure you are paid for your property at the conclusion of your sale. Cutlers will also make sure council and water rates are properly adjusted between you and the Purchaser, and that any Mortgage on your property is paid out.
What Happens when I Sell a Property?
When you sell, you are selling ownership to the property. Before offering the property for sale, the law requires you to have draft Contracts prepared and issued to your Real Estate Agent of choice (if you are using an Agent). The Contracts will be prepared for you by us with all the necessary searches and enquiries attached. Once you agree to sell to a Purchaser, you sign the original Contract which is then sent to the Purchaser’s representative. The Purchaser signs a copy of the Contract, which is sent to us. This is what is known as “Exchange of Contracts”. The time period for settlement (which is usually 6 weeks) runs from the date of Exchange of Contracts.
Once Contracts are exchanged and the deposit is paid, you are obliged to sell to the Purchaser for the sum agreed, and to give the Purchaser clear title to the property.
If there is a mortgage on your property, Cutlers will arrange for it to be paid out on finalisation of your sale.
Can I Change my Mind?
If Contracts have been exchanged, you cannot change your mind, and you are bound to sell to that Purchaser at that price.
How do Cooling Off Rights Affect Me?
Contracts can be exchanged with or without “Cooling Off” rights. Cutlers normally exchange Contracts without “Cooling Off” rights, but it will depend on the circumstances. If an
Agent carries out the exchange, Contracts will be subject to a Cooling Off Period.
If a property is sold subject to a Cooling Off Period, the purchaser pays a 0.25% deposit to the Agent and has 5 days (sometimes 10 days by agreement) within which they can carry out pest and building inspections of the property and arrange for their finance to be approved. Once the Cooling Off Period expires, the purchaser is bound to the Contract and Contracts become “unconditional”.
A purchaser can pull out of the Contract prior to the expiry of the Cooling Off Period and if they do so they forfeit the 0.25% deposit they have paid to the Agent. You then receive this 0.25% deposit.
What do I Have to Do?
If you live in a property being sold, then normally you are obliged under the Contract to give vacant possession to the Purchaser on settlement day. Once you vacate the property, you will usually need to give the keys of the property to the agent.
You should cancel the insurance on the property only once the sale is complete as you may receive a refund of part of the premium. You are obliged to keep the property fully insured up until settlement. Sometimes there can be delays with settlements so it is important that your insurance is never actually cancelled until settlement has been confirmed by us.
About seven days before the sale is finalised, you will need to contact service providers (electricity, gas, telephone) to have the meters read and set up cancellations/transfers if necessary.
If it is an investment property, then your obligations depend on whether the tenant is moving or staying.
What Happens on Settlement Day?
A meeting is arranged (attended by Cutlers, the Purchaser’s representative and any other interested parties e.g. the discharging mortgagee, the purchaser’s incoming mortgagee) where the deeds to your property are handed over to the Purchaser’s representative in exchange for money (usually in the form of bank cheques). The keys should be left with the Agent who will release the keys to the purchaser once we have confirmed with the Agent that settlement has been completed and all funds have been paid by
the purchaser You do not need to attend this meeting.
If you used a real estate Agent to sell the property, the deposit would usually have been paid to the Agent. On the completion of the sale, Cutlers will authorise the Agent to deduct their sales commission from the deposit they hold and thereafter account to you directly for the balance of the deposit they hold. If the Agent does not hold a deposit
we will arrange for their sales commission to be paid out of the settlement proceeds.
The nett proceeds of your sale should be available that day or the following day, either for you to collect or to be paid as you direct.
Buying a Property
What does Cutlers The Law Firm do in a Property Purchase?
Cutlers The Law Firm will ensure that you get what you Contracted to buy, and that you become the undisputed owner of the property. This means checking the Contracts for sale, searching the title to the property, checking to see if there are any encumbrances on the property (such as a mortgage, caveat, restrictions on use or planned resumption), checking the survey, adjusting the rates etc.
When you use Cutlers The Law Firm, your title to the property is guaranteed.
What is Exchange of Contracts?
Once you agree to buy a property, you sign a copy of the Contract, which is sent to the seller’s Solicitor with the deposit. The seller signs the original Contract, which is sent to Cutlers The Law Firm. This is what is known as “Exchange of Contracts”.
Both the seller and purchaser are then locked into the deal.
Can I Change my Mind?
In most cases, if you pay the deposit and exchange Contracts you will be fully bound to the Contract.
If you have exchanged Contracts subject to a Cooling Off Period, you can change your mind within that Cooling Off Period and pull out of the Contract provided a written notice is
served on the vendor’s solicitor before the Cooling Off Period expires. If you pull out of the Contract on a Cooling Off Period you will forfeit the 0.25% deposit you have paid to the Agent.
If there is no Cooling Off Period then you are fully bound to the Contract and if you do change your mind it will cost you a lot of money.
What is a Mortgage?
A mortgage is a document which governs the relationship between a borrower and a lender. A mortgage gives the lender a charge over the property, so that if a borrower does not meet his or her obligations, the lender is protected.
If, for example, the repayments are not made as agreed, the lender is entitled to take possession of the property and sell it to recover the money owing. In this way, the property is used as security for the loan. For this reason, a mortgage loan is called a “secured loan”.
What is the Difference Between Joint Tenancy and Tenancy in Common?
These terms are used when more than one person is buying a property.
In a Joint Tenancy, if one of the owners dies, that person’s share is transferred automatically to the surviving owner/s, irrespective of the provisions of the deceased person’s Will.
With Tenancy in Common, each owner holds a separate share in the property, and each share can be disposed of separately by sale or through their Will.
What Else Do I Have to Do?
Normally about 10 days prior to the settlement day, Cutlers The Law Firm will notify you of the amount to be paid at settlement. This will include the balance of payment on the property, government charges such as stamp duty (if not already paid), and all other expenses such as cheque fees, council land and water rates adjustments and professional legal
fees. This amount has to be paid to us before settlement by Bank Cheque or by electronic transfer to our Trust Account.
If you have an incoming mortgagee (i.e. you are borrowing money from a bank to complete your purchase) we will liaise with the bank to tell them how much to provide on settlement and advise you of any shortfall required or surplus available.
It is wise to conduct a final inspection of the property just before settlement to ensure that all items included in the sale are still there and that the property is in the same condition as it was when originally inspected. If there have been any changes to the property you need to notify us prior to settlement so they can be rectified because once the settlement is effected, you have no claim against the vendor.
Prior to settlement, you should arrange insurance over the property, and you will need to arrange for services such as electricity, gas and telephone, to be set up in your name.
What Happens on Day of Settlement?
On the day of settlement a meeting is arranged (attended by the seller’s representative, Cutlers The Law Firm and any other interested parties such as your bank) and the deeds to the property are handed over in exchange for the money.
There is no need for you to attend this meeting.
Once settlement has been effected, we will telephone you to advise you and thereafter you may attend at the Agent’s office to collect the keys.
The Law Society of NSW has published guides to buying and selling a home available at the following pages: