Buying a Home
Buying a home is one of the biggest and most important purchases you will ever make. The purchase of a home involves a number of complex decisions. Do not be hurried. Take time to shop around. Appoint a lawyer who understands your needs and situation and who will negotiate the best possible outcome for you.

Conveyancing
Conveyancing is the transfer of real estate ownership from one party to another. It is a complex area of law — not just a process of filling in forms. If you are buying a house, flat or unit you need to know your rights and obligations in relation to:
When buying a property, you need to calculate the total cost of the transaction, not just the purchase price. There are various fees and charges you need to pay which can add thousands of dollars to the cost of a home. Factor the following into the total cost of purchasing a property:

Buying a property can affect other matters, such as your taxation position or your will. It may also have implications for any family law issues you have. If you are buying an investment property you need to know your rights and obligations as a landlord, how negative gearing may assist you, and the implications of GST.

Estate Agents

Most properties are sold by estate agents on behalf of the vendor (the seller). If you are a potential buyer, contact estate agents in the area where you wish to buy a property. The agents will then arrange inspections of properties. Estate agents are legally required to communicate any offer you make to the vendor. They must also provide you with a copy of the vendor's statement prior to receiving an offer on a property. The agent has a responsibility to act ethically in their dealings with you; however, the agent's contractual responsibility is to the vendor.
If you intend to purchase a property at auction, obtain all relevant documentation from the selling agent. Have your lawyer check the documentation and answer your queries before the auction day. If you buy at the auction or within three days of the auction, you lose the right to a cooling-off period.

Finance
When buying a property, you need to calculate the total cost of the transaction, not just the purchase price. There are various fees and charges you need to pay which can add thousands of dollars to the cost of a home. Factor the following into the total cost of purchasing a property.

    







It is important to arrange finance which matches your repayment capabilities. Shop around for finance. Many charges associated with a loan are negotiable and vary enormously between lending institutions. Understand the terms of repayment. Obtain as much information as possible and if necessary, ask the lender to explain the terms and conditions of a loan in writing.

First Home Owners Grant
You may be entitled to government assistance under the First Home Owners Grant assistance scheme. The grant can be used to purchase a property or to build a new home. Application forms are available from the State Revenue Office (www.sro.vic.gov.au).

Stamp Duty Concessions
You may be entitled to a stamp duty concession which will reduce the amount of stamp duty which you are required to pay.
For example, if you purchase a property which will be used as your principal place of residence, a reduced rate of stamp duty could apply. Further information is available from the State Revenue Office (www.sromic.gov.au).

Vendor’s Statement and property inspections

The vendor's statement (or Section 32 Statement) contains information about the land for sale. It does not contain any information about the condition of buildings and fittings.
The vendor's statement is usually prepared by the vendor's lawyer 'or conveyancer and will contain information on:
the property's title;

• mortgages, covenants and easements;
• zoning permits and planning information;
• services connected to the property and rates information;
• owners corporation notices and liabilities;
• any notice, order or approval which may affect the land; and
• building guarantees and permits obtained in the last seven years.

The vendor's statement is a legal document and must contain accurate information. You may be able to withdraw from a contract of sale if it is inaccurate, incomplete or misleading. Have your lawyer review the vendor's statement and advise you on its contents.

The contract of sale will contain no guarantees about the condition of the building unless you negotiate them with the vendor.
The rule is — buyer beware! Do your own property inspection or hire a professional valuer, builder or architect to do one for you.

The Certificate of Title

It is important to have your lawyer search the relevant certificate of title at the Land Registry. The internal registry records will show all registered caveats, easements, covenants, mortgages and mortgage discharges which affect the property. Resolving
a dispute over a discrepancy in land size can be costly so check the accuracy of the boundary measurements to ensure the measurements on the title match those of the actual property. Your lawyer can also conduct searches to determine if other matters may affect the property, such as land contamination.

Certificate of Title
Most land in Victoria is held under the Torrens Title System.

• Each property has its own certificate of title.
• An original certificate of title is held at the Land Registry.
• A duplicate title is held by the owner or the owner's bank if the property is mortgaged.

The contract of sale
Property purchases need to be in writing. There are two types of written contracts usually used: a contract of sale, and an auction contract. It is important to discuss clauses in all written contracts with your lawyer. It is recommended that you seek legal advice before signing any contract.

Contract of sale: The contract is prepared by the vendor's lawyer. It will contain details of the parties, the terms of purchase, a description of the property and chattels, the date of the sale and the date of possession. It may also contain additional terms as agreed between the purchaser and the vendor. When you sign the contract you make an offer to the vendor. Once the vendor accepts the offer and signs, a contract for the sale has been made and you are bound to the contract.

Auction contract: The agent will expect the successful bidder to sign the contract and pay a deposit cheque immediately after the auction finishes. The buyer is legally bound the moment they sign the contract. Cooling-off rights do not apply to auction contracts.

The cooling-off period
If you are buying a residential property or a rural property of less than 20 hectares, you may be able to take advantage of the cooling-off period. If you decide against going ahead with your purchase within three working days of the day you signed the contract, you can withdraw from the purchase by giving the required notice in writing.
Cooling-off provisions do not apply in some instances which include:

• if you buy at auction;
• if you make a pre or post auction bid within three days of the auction;
• if you seek legal advice about a specific contract before you sign; or
• if you and the vendor previously signed a similar contract for the same property.

Cooling-off provisions still apply if you have sought only general legal advice on purchasing a property.

Insurance
Although you may be able to take the benefit of any insurance contract the vendor has, it is essential you make independent arrangements to insure both the property and any fittings as soon as the contract has been signed. A mortgage lender will require a formal insurance policy to be produced by settlement day.

Builder’s Guarantee
All domestic builders must be registered with the Building Commission and carry insurance. If building work is incomplete or defective, owners and successive owners can have access to these insurance funds. Building work is covered for a period of six and a half years from the date of completion. An owner/builder who wishes to sell a home within six and a half years of its construction must obtain an inspection report. This report, subject to any defects listed, will guarantee the property for defects in workmanship for the remainder of the six and a half year period.

Settlement
At settlement the balance of the purchase money is paid in exchange for the transfer documents and the certificate of title. The settlement date is set out in the contract of sale. The property must be handed over in the same condition it was in on the day it was sold. An inspection should be carried out in the week prior to settlement to confirm this.
All council and water rates are adjusted as of the settlement date. After settlement your bank or lawyer pays stamp duty on the transfer and registers the transfer with the Land Registry. The local council, the water authority and the State Revenue Office must be notified of the change of ownership in the property. Your lawyer will do this.

Owners Corporation
Many people buy units or lots divided under a plan of subdivision. On becoming an owner of a piece of land or lot in a plan of subdivision which includes common property, you become a member of the owners corporation. The Subdivision Act 1988 and the Owners Corporation Act 2006 regulate the functions, rules and responsibilities of the owners corporation. The owners corporation is usually run by a committee of management made up of lot owners.
The owners corporation is responsible for maintaining and repairing areas of common property, arranging insurance in relation to these areas, including public liability cover, and conducting regular owners corporation meetings where general business is discussed and voted on. When you buy a unit, a certificate outlining details of the owners corporation and your fee obligations must be provided by the vendor.

Common Property

Retirement Villages

There are two main types of retirement village schemes. The first is where residents buy a unit at current market value and receive a certificate of title. The second is based on a lease or licence arrangement, where residents pay the equivalent of the current market value of a unit to the village developer in return for a lease on the unit, usually for life.

The amount residents or their estates receive on departure from the retirement village can vary. Some villages allow the whole of the capital gain on resale, others allow a share of the capital gain, and others allow no capital gain at all.
Would-be residents must be provided with documentation about the village 21 days before signing a contract. The documentation must include:

• the name, location and ownership of the village;
• the village by-laws;
• a residence and management contract; and
• a checklist of important questions to consider before entering a village.

Once a contract has been signed a three-day cooling-off period is available. You should seek legal advice about the terms and conditions of the residence contract before signing.

Off the plan sales
The contract of sale for buildings purchased off the plan,
that is before the plan has been certified by council or registered at the Land Registry, is usually lengthy. It is important to read the contract carefully and to understand it.

• Have your lawyer check the contract of sale.
• Check the measurements of the property against the plan of subdivision.
• Have an independent architect or builder appraise the plans and specifications.
• Check the rules of the owners corporation.
• If appropriate, get an independent appraisal of the rental value of the property.

Unless the contract provides otherwise, a purchaser may terminate a contract if after eighteen months from the date of the contract of sale, the plan of subdivision has still not been registered.

Stamp duty is payable on the value of the land and building as at the date of the contract of sale. If construction or refurbishment is yet to commence, a reduced amount of stamp duty is payable compared with buying an existing or refurbished building.

Arrange a consultation with an experienced solicitor.

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