Notes for buyers
The contract contains obligations on your part which may include the following:
Finance
If your contract is subject to finance you must use your best endeavours to obtain finance and notify the seller or seller’s agent of the results within the time stated in the contract. Once finance has been approved please inform us of the arrangements. If requested by the lender we will then send them a copy of the transfer of land document and settlement statement. If you require legal advice in relation to the loan and security documents, please contact us to arrange an initial consultation before you sign the documents. Please sign the loan and mortgage documents promptly and return them to the lender. The most common reason that settlement is delayed is because the lender is not ready to settle.
Deposit
Please ensure that all instalments of the deposit are made by the due date. Failure to pay the deposit on time may result in the seller terminating the contract.
Identifying the property
You should be sure that the property you are buying is identical to the property described in the certificate of title. If you are in any doubt as to the identification, or whether the fences or buildings are within its boundaries, you should engage a surveyor to survey the property boundaries.
All local authority rates, Water Corporation rates, strata levies and land tax (outgoings) for the current year will be apportioned between you and the seller with the effect that:
- the seller pays the outgoings up to and including the settlement date or possession date (whichever is earlier); and
- you pay the outgoings from the day after the settlement date or possession date (whichever is earlier).
We will notify those authorities of the change of ownership.
If land tax is payable by the seller in respect of the property, it will not be apportioned where:
- the property is a residence which is capable of being used as a residence and for no other purpose; or
- the property includes a residence which is capable of being used as a residence and:
Where buying in your own name:
- Please sign your usual signature where indicated on the transfer.
- Your signature must be witnessed by an adult person who is not a party to the transaction.
- The witness must sign where indicated on the transfer of land.
- The witness must also print their full name (including their middle name (if any)), address and occupation after their signature.
Where buying in the name of a company:
You are liable for transfer duty (formerly known as stamp duty) on the contract and transfer. Transfer duty is calculated on the value of the property and an estimate of the duty payable on your contract is set out in the settlement statement. You can calculate transfer duty using the Office of State Revenue’s online calculator.
You may be eligible for a reduced rate of transfer duty if you are a first home buyer or you are buying a residence for owner occupation. Contact our settlements manager Lucy Newson on 9220 4430 for more information about transfer duty concessions.
As of 1 March 2011 you must lodge your contract at the Office of State Revenue for assessment within 2 months of the contract date. If you fail to do so you may be liable to pay a fine or late lodgement penalties.
Unless stated in the contract, the property is sold free of all encumbrances. This means that, at settlement, any mortgages, caveats and other encumbrances must be discharged so that you receive a clear title.
As of 9 August 2009 the Electricity Regulations 1947 (WA) require Sellers of residential properties built after 1 January 2000 to install at least 2 residual current devices (RCD’s) in the premises before the sale is completed. As of 1 October 2009 it is compulsory that mains powered smoke alarms are installed in residential properties prior to sale.
Prior to settlement, you should obtain a statement from the Seller certifying that RCD’s and smoke alarms are installed in accordance with the Electricity (Licensing) Regulations 1991.
For more information, please see the RCD’s fact sheet or the Smoke alarms fact sheet.
The General Conditions provide the following penalties if settlement is not completed on the settlement date specified in the contract:
Settlement delayed by the seller
If for any reason attributable to the seller, settlement is not completed within 3 business days after the settlement date, you may demand compensation at the rate of 9% per annum on the balance of the purchase price payable calculated from the settlement date to the date upon which settlement is in fact completed in full settlement of any claim which you may have against the seller arising from such delay.
You may deduct the amount of the compensation from the balance of the purchase price payable upon settlement.
Your right to compensation is subject to you and your lender (if any) being ready, willing and able to complete the purchase on the settlement date.
If you are not ready, willing and able to settle on the settlement date, then your right to compensation begins from the date upon which you give written notice to the seller that you are ready, willing and able to complete the settlement.
We will only claim penalty interest from the seller for late settlement if we receive your written instructions to do so. We will advise you should there be any delay in settlement.
Settlement delayed by you
If for any reason attributable to you, settlement is delayed more than 3 business days after the settlement date you must pay to the seller upon settlement, interest at the rate of 9% per annum on the balance of the purchase price from the settlement date to the actual date of payment of the purchase price in full settlement of any claim which the seller may have against you arising from the delay.
If the seller is not ready, willing and able to complete the sale on the settlement date, then the seller’s right to interest begins from the date upon which the seller give you written notice that it is ready, willing and able to complete settlement.
We will contact you prior to the settlement date to discuss the options for payment of the balance due by you at settlement, including electronic funds transfer into our trust account, bank cheque or ordinary cheque.
If you pay money into our trust account you must allow sufficient time for clearance of those funds prior to settlement.
You must attend to the following matters, where applicable, before the settlement date:
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Arrange for the real estate agent to give you the keys to the property on the date of possession.
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Ensure the property is adequately insured from date of possession or on the settlement date (whichever date is the earlier).
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Have the electricity service and any gas service transferred into your name from the date of possession. Any outstanding electricity or gas account is the seller’s responsibility and will not be apportioned at settlement.
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Arrange for any telephone, internet, pay television and other telecommunications services you require to be installed or transfer your existing services to the property.
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Inspect the property a few days before the settlement date.
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Notes for sellers
All local authority rates, water authority rates, strata levies and land tax (outgoings) for the current year will be apportioned between you and the buyer with the effect that:
- you pay the outgoings up to and including the settlement date or possession date (whichever is earlier); and
- the buyer pays the outgoings from the settlement date or possession date (whichever is earlier).
Ordinarily the buyer’s settlement representative notifies those authorities of the change of ownership.
We will attend to adjustment of water consumption charges and ensure that any outstanding amounts owed by you are paid on settlement or promptly thereafter.
If land tax is payable by you in respect of the property, it will not be apportioned where:
- the property is a residence which is capable of being used as a residence and for no other purpose; or
- the property includes a residence which is capable of being used as a residence and:
Where buying in your own name:
- Please sign your usual signature where indicated on the transfer.
- Your signature must be witnessed by an adult person who is not a party to the transaction.
- The witness must sign where indicated on the transfer of land.
- The witness must also print their full name (including their middle name (if any)), address and occupation after their signature.
Where buying in the name of a company:
The buyer pays all transfer duty (formerly known as stamp duty) on the contract and transfer.
Unless specifically stated in the contract, the property is sold free of all encumbrances. This means that, at settlement, any mortgages, caveats and other encumbrances must be discharged so the buyer receives a clear title.
If there is a mortgage or other encumbrances on the title, you must immediately contact the relevant financial institution or other persons and request that the encumbrance be removed at settlement. If you have not already done so, please attend to this immediately. The most common reason that settlement is delayed by a seller is that the discharging financier is not ready to settle. If settlement is delayed you may be liable to pay penalty interest.
As of 9 August 2009 the Electricity Regulations 1947 (WA) require Sellers of residential properties to install at least 2 residual current devices (RCD’s) in the premises before the sale is completed. As of 1 October 2009 it is compulsory that mains-powered smoke alarms are installed in residential properties prior to sale. Failure to install RCD’s or smoke alarms may result in a substantial fine.
Prior to settlement, ensure that you install mains powered smoke alarms and at least 2 RCD’s in the premises. You should obtain a statement from an electrical contractor certifying the RCD’s and smoke alarms are installed in accordance with the Electricity (Licensing) Regulations 1991.
For more information, please see the RCD’s fact sheet or the Smoke alarms fact sheet.
The General Conditions provide the following penalties if settlement is not completed on the settlement date specified in the contract:
Settlement delayed by you
If for any reason attributable to you (this includes your discharging mortgagee), settlement is not completed within 3 business days after the settlement date, the buyer may demand compensation at the rate of 9% per annum on the balance of the purchase price payable calculated from the settlement date to the date upon which settlement is in fact completed in full settlement of any claim which the buyer may have against you arising from such delay.
The buyer may deduct the amount of the compensation from the balance of the purchase price payable upon settlement.
The buyer’s right to compensation is subject to the buyer and its financier (if any) being ready, willing and able to complete the purchase on the settlement date.
If the buyer is not ready, willing and able to settle on the settlement date, then its right to compensation begins from the date upon which the buyer gives you written notice that it is ready, willing and able to complete the settlement.
Settlement delayed the buyer
If for any reason not attributable to you, settlement is delayed more than 3 business days after the settlement date, the buyer must pay to you upon settlement, interest at the rate of 9% per annum on the balance of the purchase price from the settlement date to the actual date of payment of the purchase price in full settlement of any claim which you may have against the buyer arising from the delay.
If you are not ready, willing and able to complete the sale on the settlement date, then your right to interest begins from the date upon which you give the buyer written notice that you are ready, willing and able to complete settlement.
We will only claim penalty interest from the buyer for late settlement if we receive your written instructions to do so. We will advise you should there be any delay in settlement.
We will send you a preliminary settlement statement prior to settlement which shows the funds we expect to receive from the buyer, and how those funds will be disbursed. In general, funds we receive from the buyer at settlement are paid as follows:
- the amount required to discharge any mortgage or other encumbrances - ie in most cases, any loans secured against the property;
- sales commission and any marketing expenses due to your real estate agent (less the amount of any deposit retained in the agent’s trust account);
- our settlement fees and disbursements;
- in adjustment of rates and taxes; and
- the balance to you, or as you direct us in writing.
Prior to settlement we will ask you to sign an authority which confirms your instructions to us to disburse the sale proceeds.
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Arrange for the real estate agent to give the keys to the property to the buyer on the date of possession or, if you occupy the premises as your principal place of residence, at noon on the day following settlement
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Cancel your insurance on the property no sooner than the day after the buyer takes possession or settlement (whichever occurs first)
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Cancel the electricity and gas services. Any amount for electricity or gas consumed by you up to the date of possession or settlement is your responsibility and will not be apportioned at settlement.
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Cancel your telephone, internet, pay television and any other telecommuications services or transfer them to your new residence
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