Contents:

s Cooling off period

s Arranging building & pest inspections

s Arranging finance

s Other inspections / conditions

s Insurance

s Time of settlement

s Keys

s After settlement

Cooling off period

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In Queensland there is a "cooling off" period of five business days, that applies to all residential property contracts EXCEPT sales "under the hammer" at an auction and sales where the cooling off period has been waived.

A buyer who cancels using the cooling off period will have a small "penalty" (currently 1/4 of 1% of the purchase price) which will go to the seller, usually from the deposit held.

Buyers wishing to use the cooling off period must contact their legal representatives at the earliest possible opportunity.  If the buyers leave this too close to the end of the cooling off period, then there may not be sufficient time to give the notices cancelling the contract.

Arranging building & pest inspections

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When a contract is made conditional on building and pest inspections, there is usually a time limit that applies.

The buyer has up until that time limit expires, to advise a bad search outcome, and after that time limit it is "too late !".

Buyers will need to make their own arrangements for inspections, and inspectors are usually chosen either on recommendation, or from the "Yellow Pages".

Arranging finance

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When a contract is made conditional on finance approval, there will be a time limit that applies.

If they buyer is not able to obtain finance approval (or is not able to obtain approval on satisfactory terms) the buyer must usually act before the time limit expires.  If they don't (depending on the contract itself) the buyers may not be able to terminate the contract ... even though they don't have finance approval !

Buyers will need to apply to their intended lenders, and follow up those lenders to get an answer before the time limit expires.  It is wise for buyers to obtain a finance approval in writing, and not simply to rely on a telephone or other conversation.

Other inspections / conditions

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The Buyers may have the benefit of other conditions in a contract (for examples - see here).  Buyers will need to follow up and arrange for other conditions to be met.

Insurance

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The laws of insurance don't necessarily follow "common sense".  These very old laws mean that buyers need to insure the property that they are buying, before they have paid for it.

Specifically - if there is damage to the property which is not caused by the seller, then the buyer may still have to settle, notwithstanding the damage.

Insurance companies understand this and Buyers should call and arrange insurance policies as soon as they have signed a contract.

Units and town houses that have a common "body corporate" can in some circumstances be different ... provided the building structure itself is insured by the body corporate.  A few phone calls should determine this (and good legal advice will help).

Time of settlement

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The time of day that settlement occurs cannot normally be set either by the buyer or the seller. 

Usually, the time needs to be "agreed" between the buyers bank, the sellers bank, and the solicitors for buyer and seller.  The types of things that affect settlement time are:

• Sometimes a sale must happen before a purchase ($ from sale used for purchase) ... and this will set an "earliest possible" time for the purchase.

• Banks will not normally ever settle before 10.00am.

• Banks often will not settle between 12.00 noon and 2.00pm.

• Buyers sometimes need to withdraw bank cheques on the day of settlement, which can take several hours.

• Money sometimes needs to be transferred from interstate.

• Solicitors for the parties are sometimes required to be elsewhere.

• Banks frequently make mistakes on cheques, and so an attempt at settlement fails and has to be postponed for later in the day.

• The banks and lawyers are usually required to carry out other settlements on the same day.

It is sometimes possible to request a time, but in most cases, settlement occurs at the earliest possible time - and may happen any time up to 5.00pm on the due date.

Keys

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The standard contract states that all the seller's keys and codes are to be delivered to the real estate agent, who will after settlement hand them to the buyer.

Most sellers act fairly, and will deliver all the keys that they have - which will usually be for all the locks (with spares).

Other sellers will not deliver all their keys, or won't deliver enough keys to operate all the windows and locks.  This can lead to real disappointment for buyers.

This is a very difficult problem to solve.  Some possibilities are included here.

After settlement

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(a) For buyers who have borrowed money

Buyers who have borrowed money will not obtain a "title deed" for the property.  Often, they will not get very much to confirm that they have just purchased a property.  Usually, these buyers will receive:

• A letter from their legal representative, confirming settlement details.

• A letter from their lender - confirming their repayments, and

• (in due course) a rates notice from the local Council.

The transfer papers for the property are given at settlement to the buyer's lender, and it is the lender who lodges these forms with the Government for registration.

Many lenders are "on the ball" and lodge the documents quickly.  Some lenders are very slow, and we have seen delays in one case of almost a year !!

This can be annoying, because until the lender lodges the transfer papers, the rates notices will continue to be issued to the old owner !  The only thing to do, is to constantly chase up the lender.

(b) For buyers who have NOT borrowed

Where there is no lender, the legal representatives for the buyers should lodge the transfer papers almost immediately after settlement. 

Registration of the transfer can take as little as 5 days, and as long as a month or two.  The process is a Government one, and cannot usually be "hurried along".

After registration, the buyers will receive a "registration confirmation statement" - and can receive a Title Deed (at their option).  These are registration documents showing that they own the property !