When you’ve made the decision to sell you want the process to be as easy as possible. Every seller wants to avoid lengthy delays, unexpected costs and uncertainty. You can do this by speaking to us first!
In Queensland sellers do not need to provide as much property disclosure information or documents to the buyer as they do in other states and that means it can be easier to forget about when disclosures do need to be made. Buyers can rely on the seller’s warranties in the standard form of contract and undertake their own due diligence investigations and they can cancel the contract or claim compensation if the seller hasn’t disclosed something they should have.
Some of the most common necessary disclosures are:
1. Body corporate
If your property is part of a community titles scheme, then you need to provide a signed body corporate disclosure statement to the buyer before they sign the contract. The body corporate disclosure statement will include information about the body corporate including the body corporate levy amounts. Sellers are also deemed to give buyers the implied warranties under the Body Corporate and Community Management Act and if any of the implied warranties are incorrect the buyer may be able to cancel the contract. It can take several days to obtain a body corporate disclosure statement so you should plan to order one as soon as possible. Your body corporate manager will usually only provide a basic body corporate disclosure statement that doesn’t include an implied warranty statement disclosing any issues. We can help you order the comprehensive body corporate disclosure statement and implied warranty statement so you are protected.
2. Swimming pool safety certificates
If you have a swimming pool on your property, then you need to disclose whether or not you have a pool safety certificate before the buyer signs the contract. If you do have a pool safety certificate, then you need to provide this to the buyer before settlement. If you don’t have a pool safety certificate then you need to provide the buyer with a notice of no pool safety certificate before the buyer signs the contract and the contract may be conditional upon a pool safety certificate being issued before settlement.
All encumbrances such as easements and covenants must be disclosed, both those that are registered on the title of the property and those that are not registered. An easement is a right of a person or authority to use or have access over part or all of the property, for example, an easement for access along a shared driveway or an easement for stormwater drainage. Covenants are terms and conditions regarding the property often in the form of a deed or recorded against title that may restrict the use of the property, for example, a building covenant that allow only certain types of houses to be built.
4. Owner builder notice
If you are selling a property within 7 years of the registration of a notification of owner builder work on the title of the property, then you need to provide the relevant notice to the buyer before they sign the contract. The notice must include details of the owner builder work done; the name of the permit holder who carried out the work; a statement confirming the work was done under an owner builder permit and a prescribed warning.
5. Smoke alarms and safety switches
You need to disclose to the buyer in the contract whether or not there are smoke alarms and safety switches compliant with the relevant laws.
6. Neighbourhood disputes
You need to disclose any application to or order made by QCAT in relation to a tree or fence dispute with your neighbour and provide a copy to the buyer before they sign the contract.
If the property is being sold with a tenancy, i.e. a tenant will remain in the property after settlement, then this needs to be disclosed in the contract, otherwise the buyer is entitled to a vacant property at settlement. If you currently have tenants in the property but intend to sell the property with vacant possession make sure you or your property manager provides the relevant notice to the tenants required under the residential tenancy laws and factor in any notice periods when agreeing to a settlement date. We can help you with this if you do not have a property manager.
8. Contaminated land
Whilst it is uncommon for residential land to be contaminated, if your property has previously been used for agricultural or industrial uses and is on the contaminated land register then you’ll need to disclose this to the buyer before they sign the contract.
9. Gold Coast local laws
In the Gold Coast local authority area, there are some local laws that impose certain disclosure obligations on sellers of properties situated in Gold Coast waterway areas.
The standard form of contract can be completed by a real estate agent in Queensland but as you can see, it’s not always straightforward and the agent may not be aware of some of the issues above that may require disclosure. We can help by reviewing the draft contract prepared by your agent before you sign or by preparing a contract upfront.
The keys steps in the standard conveyancing process are as follows:
1. Once you have found a buyer for your property the contract can be completed with the buyer’s details and the sale terms. Special conditions may also need to be drafted and inserted depending on the sale terms and circumstances of the parties. If we’re involved before signing, we can issue the contracts to be signed electronically, which speeds up the process and secures buyers quicker.
2. Once the contract is signed by both parties (known as exchange), it becomes legally binding. At the same time as signing the contract, the buyer needs to pay a deposit. The deposit is negotiable but is usually up to 10% of the purchase price. It is a sign of their commitment to purchase the property. If the Buyer is in default of the contract later (e.g. by not being able to settle) you may be entitled to terminate the contract and keep the deposit. The deposit is usually paid to the trust account of the real estate agent (or to the seller’s lawyer if there is no real estate agent) to hold until settlement.
3. We will confirm the critical dates of the contract and you will be kept up date and guided through the conveyancing process using our smart, simple and secure system called Rundl rundl.com.
4. The period between contract exchange and settlement is commonly 30 days but you can negotiate a longer or shorter period if required.
5. The buyer usually has a 5 business day cooling off period. This does not apply if you have sold the property at auction (or within 2 clear business days after the auction to a registered auction bidder) or you have agreed that the buyer will waive their cooling-off rights. If the buyer decides not to proceed with the purchase, they must give notice to us of their intention to terminate the contract before the expiry of the cooling off period. You are entitled to charge a termination fee of 0.25% of the purchase price if the buyer terminates under the cooling off provisions.
6. If the contract is subject to a condition such as finance or building and pest inspections, the buyer must give us notice of whether or not the conditions are satisfied prior to the expiry of the conditions. If the buyer needs more time to satisfy the conditions, then they may request further time to do so (but this will be at your discretion). It is important to note that in Queensland, if a standard condition like finance or a building and pest inspection is not satisfied by the due date then the condition is not automatically satisfied. You as the seller then have rights to terminate the contract if you wish, but only until the buyer has terminated or satisfied the condition themselves. If the contract is terminated under conditions such finance or building and pest, then the buyer is entitled to their deposit returned to them in full.
7. If there is a mortgage over your property then you should contact the lender as soon as possible to let them know that you have sold the property. They may ask you to sign a discharge authority so they can prepare a release of mortgage and liaise with us to organise settlement. You should also advise them and your lawyer which bank account you would like any surplus funds to be paid into. Your mortgagee will calculate a payout figure and advise us of this amount before settlement. If the money you are entitled to at settlement is less than you owe the bank you will need to ensure you have sufficient funds to pay this shortfall or settlement will not go through.
8. If you don’t have a mortgage and hold the certificate of title deed for the property then we will need the original well before settlement.
9. There are two kinds of settlement that can be done – paper and electronic settlements. We recommend electronic settlements because there is less risk of delays to settlement, less documents for you to sign, less banking costs and you will receive your sale proceeds quicker. However the buyer must also agree to an electronic settlement and if they don’t then you’ll need to settle by paper and sign a transfer document in front of a qualified witness.
10. We will prepare settlement figures and send these to you for your approval usually 5 days prior to settlement. Our legal fees, any balance of the agent’s commission and any outstanding outgoings (e.g. rates and water) will be deducted from the balance of settlement funds due to you.
11. Unless the property is sold subject to a tenancy, you should vacate the property at least by the day prior to settlement. The keys need to be handed to your real estate agent for the buyer to collect at or after settlement. The buyer is entitled to inspect the property prior to settlement and will usually do so the day before or the morning of settlement. This gives the buyer an opportunity to make sure that the property is in the same condition as at the contract date and that any goods included in the contract are left at the property.
12. Electronic settlements take place online but if you have a paper settlement there is usually no need for you to attend this either as our settlement agents will attend settlement on your behalf. Once settlement has occurred we will contact you immediately to advise that your sale has settled! After settlement, the real estate agent will account to you for any balance of the deposit after deducting their commission or fees payable.