House buying traps you need an experienced property solicitor to warn you about
Do you really need a property lawyer when you buy a house?
The simple answer to this question is, yes. We’ve already outlined Buying your first home – 5 tips to make it as smooth as possible and why you shouldn’t try to DIY your conveyancing, but what about the other traps you can miss when purchasing real estate? Why do you need a real estate lawyer and what problems can they help you avoid?
There are many things you can do yourself and don’t necessarily need to engage a lawyer to do such as, doing the title deed searches; organising your own pest and building inspections; checking the city flood maps; asking an electrician or plumber to check the wiring and plumbing is up to scratch; and attending settlement.
But there are many questions where it is necessary for a property lawyer to find the answer for you, either because the information is not publicly available or because it would be excessively complicated and expensive for you to try and do the searches yourself. Some questions you need to ask a property lawyer are as follows.
1. Is there development or construction planned for the area?
It is difficult for a member of the public to find out whether the block next door is planned for development for a block of apartments or a townhouse development, or if a new sports stadium is going up down the road, or if one day your block of land is planned to be developed into a new highway. The local council will often charge you to ask the question, and may list developments under separate searches, each with their own service fee.
Real estate agents do not have to tell you these kid of things when you are buying a property and they’re not something you can find out for yourself unless you go down to City Hall and pay to see a copy of the town plans. So this is where an experienced property lawyer is important as they can alert you to these developments.
Another consideration you must factor in is if your new home has any renovations or structures on it that are not council-approved, you will be the one paying to demolish or alter them to become compliant. Your lawyer can add into the contract that the sale is conditional upon the seller obtaining a building certificate from the local council.
2. If it’s off the plan, making sure the plan is still correct.
As development and construction of an off-the-plan property goes ahead, plans can change as necessary adjustments are made as the process advances. Your contract can be changed by the developer, or your lot can sometimes begin to look smaller than the plan (shrinkage), and although some changes are okay, it’s important you get them checked out.
A lawyer can go through the contract with a fine-tooth comb before settlement and confirm that no unfair conditions or clauses have been added since you first signed up to the plan, and that any shrinkage is reasonable.
Make sure you are aware of all the risks of buying off the plan, a property lawyer can ensure that everything is just as it should be before settlement goes ahead.
3. Advice on the contract and tax
Our property lawyers are experienced in reading and writing legal contracts and documents. It would be in your best interest to have a lawyer read over your contract before you sign it.
A home is or one of the largest purchases or sale you’ll ever make, so from stamp duty and GST when buying to capital gains tax when selling, you want to get your taxes right.
Don’t let real estate agents pressure you into signing a contract. They act for the seller and they will do everything and anything to ensure they get a sale for their client. Take the time and get a lawyer to read over your contract before you sign it. Paying for professional advice could save you thousands down the track. Our property lawyers know how to check for the right inclusions and exclusions and will ensure you are being fairly treated.
Another trap you can fall victim to as a buyer without a lawyer is paying the deposit but not completing the contract. This means the vendor (seller) can keep your deposit.
The equivalent trap for sellers without a lawyer is that the buyer could renege on their offer after you have told all other buyers that the property is no longer for sale. You would lose your marketing costs and expenses, and possibly the real estate agent’s commission, and have to start selling the property all over again. Selling a house is stressful enough without set-backs like these.
4. Is the body corporate up-to-date?
If you have bought an apartment or townhouse in a complex the last thing you want is to inherit unpaid body corporate levies left by previous owners within the complex.
Without a lawyer, you must rely on the real estate agent to put you in touch with the body corporate, and then it would be up to you to find out the information, a lawyer can take care of all of this for you.
A lawyer can peruse the strata documents for you with much less effort and time involved. They can highlight for you the financial details of the administrative and sinking funds, as well as plumbing, drainage, fencing, driveway, and other problems that exist now or have been previously repaired.
5. Is the land contaminated or protected?
Land contamination searches are not a standard part of building and pest inspections, but they’re another search that is easy for your lawyer to take care of.
Environmental issues fall under the same banner – such as not being able to renovate a deck or shed on the property because your backyard touches your local park or a national park area.
Call our experienced property law team today on 3221 9722 for all the advise you need on buying or selling a property.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.
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