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HPL Law Group is able to assist those wanting to purchase or sell residential and commercial property. This process is more commonly referred to as ‘conveyancing’. We have lawyers who have experience with both New South Wales and Queensland properties. We are committed to guiding you through every step of the conveyancing process, from signing the contract to settlement.
1. Selling a property
In New South Wales, you must have a solicitor prepare the draft contract of sale prior to the real estate agent marketing the property. At HPL Law Group, we not only draft the contract, we carry out the extensive searches required to comply with the vendor disclosure requirements. A failure to properly prepare the contract and its annexures may mean that the purchaser can rescind (i.e. end) the contract without penalty.
On the other hand, it is common practice for the real estate agent to prepare the contract of sale in Queensland since that jurisdiction does not have the extensive vendor disclosure requirements that New South Wales has. However, real estate agents are not lawyers and as such, we recommend that you have HPL Law Group review the contract prior to the parties executing same to ensure that it provides you with sufficient protection.
If you have a mortgage registered on title to the property, we will also need to liaise with your financier (or mortgagee) prior to settlement to arrange for this mortgage to be discharged. If the purchase price is $750,000.00 or more, vendors will need to apply for a clearance certificate from the Australian Taxation Office. A failure to do so will result in the purchaser paying 12.5% of the purchase price to the ATO on your behalf as a withholding for capital gains tax. HPL Law Group can assist with applying for such certificates from the ATO.
2. Purchasing a property
Once you have found a property that you are interested in, you will need to provide HPL Law Group with a copy of the draft contract of sale for us to review prior to your execution of same. We will then request certain amendments to the contract that are to your benefit. This is where we add value, ensuring that your interests are protected as far as possible.
In New South Wales, the purchaser will sign a copy of the contract and the vendor will sign a separate copy. The parties then ‘exchange’ these counterparts and it is at this point that the contract becomes legally binding on the parties. In Queensland, there is no exchange; instead, both parties sign the same contract with the purchaser signing first and then the seller.
Both States entitle purchasers to a five business day cooling-off period, which entitles the purchaser to terminate the contract for any reason. If the purchaser terminates during this period, they will forfeit 0.25% of the purchase price from the deposit paid.
In Queensland, in addition to the statutory cooling-off period, it is common for a contract to be subject to the purchaser obtaining satisfactory inspection reports (e.g. building, pest and pool compliance) and finance approval. In New South Wales, it is expected that these matters have either been satisfied prior to exchange or will be satisfied during the cooling-off period.
The usual settlement period in New South Wales is 42 days from the date of exchange, whereas 30 days is more common in Queensland. That said, the settlement period can be as short or as long as both parties desire. Unlike New South Wales, time is of the essence for all contract dates in Queensland. This means that if the parties do not settle by the due date, the other party can lawfully terminate the contract.
As part of the conveyancing process, HPL Law Group will liaise with any incoming mortgagee (e.g. bank) to arrange a time for settlement and the disbursement of settlement cheques. We will also undertake certain searches such as council rates and water enquiries so that an adjustment on these amounts can be made at settlement.
In both New South Wales and Queensland, purchasers will need to pay the respective State Governments a tax called transfer duty (commonly referred to as ‘stamp duty’). The timeframe for payment of transfer duty and the calculation of the duty amount differ between the States. However, both have an additional amount of duty imposed for foreign purchasers.
Foreign purchasers may need to obtain approval from the Foreign Investment Review Board to purchase certain property. HPL Law Group is able to assist such purchasers with making these applications to the FIRB.
3. Purchasing from a developer: ‘Off-the-Plan’ properties
The purchase of an off-the-plan property involves additional risks and complications to that of the purchase of an existing property. Since an off-the-plan property does not exist at the time of signing the contract, it is important that you have HPL Law Group review the contract and ensure that the developer’s ability to change aspects of the property is limited as far as possible.
Unlike Queensland, New South Wales does not have a legislative regime that provides purchasers with automatic remedies if the developer makes changes that prejudice the purchaser so it is all the more important that purchasers of New South Wales off-the-plan properties obtain legal advice prior to entering into the contract.
Generally, a purchaser will have three months to pay transfer duty on a New South Wales off-the-plan property (unless they will move into the property, in which case they may be eligible for a 12 month extension) and in Queensland, 60 days from when the seller gives notice that the property is registered for off-the-plan properties. These periods are subject to the specific circumstances of the transaction including the purchaser’s residency and the type of off-the-plan property.
The developer will usually specify a date by which time they must have completed the development (commonly called a ‘Sunset Date’), failing which, either party can terminate the contract without penalty. In Queensland, the legislation provides maximum sunset dates depending on the type of property and the terms of the contract. However in New South Wales, no such capping exists so it is important that the developer’s rights in respect of any sunset date are carefully scrutinised.
4. Electronic Conveyancing (PEXA)
E-conveyancing is a recently introduced system which allows for an ‘electronic’ settlement of a conveyancing transaction through an online exchange known as PEXA (Property Exchange Australia). The main benefits of using PEXA are that:
(a) vendors receive the net sale proceeds as cleared funds to their nominated account on the day of settlement instead of waiting days for a settlement cheque to clear; and
(b) purchasers become the registered owners of the property on the day of settlement instead of waiting weeks for the transfer documents to be lodged by the bank and registered by the Land Registry.
HPL Law Group is a subscriber to PEXA and we are able to use e-conveyancing for the settlement of your conveyancing matters. Of course, we will only be able to do so if the transaction is not excluded by the rules applying to the use of the system and if all parties to the transaction (including financiers) agree to use it.
HPL Law Group is proud to have completed the first electronic settlement through PEXA for the Freshwater area in 2016 and has completed many electronic settlements since.