Glossary

Index Of Terms  
Agreement Mortgagee
Caveat Notice Of Acquisition
Certificate Of Title Notice Of Disposition
Cooling Off Period Possession
Contract Of Sale Property
Conveyancing Registered Proprietor
Covenant Requisitions On Title
Deposit Section 32 Statement
Deposited Plan Settlement
Disbursements Settlement Statement
Discharge Of Mortgage Stamp Duty
Easement Statement Of Adjustments
Encumbrance Statutory Declaration Of Chattels (Goods Statement)
Finance Approval Title Of Ownership
Freehold Transfer Of Land
Further Terms Of Sale Unconditional
Interest Rate Vendor
Legal Description Vendor’s Obligations
Mortgage Warranty
Mortgage Broker  

Agreement

This is a written contract between the Buyer and Seller. It contains the main terms such as the property description, the purchase price, relevant dates and the names of the Buyer and Seller. If anything goes wrong, the agreement sets out the process to be followed.

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Caveat

Registered against the Certificate Of Title to give notice of a person’s interest in that property. A caveat prevents registration of interests against the Certificate Of Title.

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Certificate Of Title

The Certificate Of Title is issued by the Registrar Of Titles. It contains title particulars which is evidence that you own that land Title Particulars.

Each title has its own Volume and Folio number that identify it. These numbers are the title particulars and can be found in the top right corner of your title.

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Cooling Off Period

You may have the right to “change your mind” for a short period of time. If you intend to cool off you must provide written notice of your intention to do so within three (3) clear business days from the date you sign the contract. There are exceptions to this right. These are listed on the front page of the contract.

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Contract Of Sale

Once the buyer and vendor have agreed on a price, the Real Estate Agent will then draw up a Contract Of Sale. The Contract Of Sale can include special conditions that the purchaser specifically requests. These may include a building inspection or pest inspections. If there is a finance clause the buyer must demonstrate that they have a written home loan approval by a defined date. Finance Approval If the Contract of Sale is subject to finance, every effort must be made by the purchaser to ensure that finance approval is obtained by the specified date.

If by the specified date finance approval has not been granted, an extension may be applied for under certain circumstances. If the finance is subsequently declined, the Contract will end and the purchaser will receive a full refund of their deposit.

However, the Contract Of Sale becomes unconditional, if the vendor does not receive any written advice as to whether the buyers finance is approved or declined by the specified date. This means the purchaser will have to go through with the contract whether finance has been approved or not.

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Conveyancing

Conveyancing is the process and legal procedure of transferring the title of property from one person to another.

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Covenant

A covenant may be lodged by the original owner on a title and usually requires the land to be used in a particular way. For example, a covenant may require that only a single story dwelling may be built or that all buildings must be brick.

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Deposit

That part of the purchase price paid in advance.

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Deposited Plan

The survey plan of subdivision from which Certificates Of Title are issued and easements are drawn and recorded.

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Disbursements

Disbursements are required in order to prepare a vendor’s statement if selling your house, or to verify the details contained in a vendor’s statement if you are buying a house property. Disbursements are monies paid to the various authorities in order to gather relevant information on the title to your property.

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Discharge Of Mortgage

If you are selling, we contact your mortgage lender and find out how much it will cost to pay off your mortgage.

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Easement

An easement is an area or strip of land on a property that is used by someone other than the landowner. It will be shown on your title and may be inside your property boundary. It is normally used for drainage, sewerage or electrical wiring. You are normally not allowed to build over easements but you can apply to the relevant board to gain approval for any building works.

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Encumbrance

A restriction or limitation on the Certificate of Title which may or may not be able to be removed. Encumbrances include mortgages, charges, easements and covenants.

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Finance Approval

If the Contract Of Sale is subject to finance, every effort must be made by the purchaser to ensure that finance approval is obtained by the specified date.

If by the specified date finance approval has not been granted, an extension may be applied for under certain circumstances. If the finance is subsequently declined, the Contract will end and the purchaser will receive a full refund of their deposit.

However, the Contract Of Sale becomes unconditional, if the vendor does not receive any written advice as to whether the buyers finance is approved or declined by the specified date. This means the purchaser will have to go through with the contract whether finance has been approved or not.

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Freehold

Ownership of the property, subject to national, regional and local rates and taxes. The State retains the right of compulsory acquisition and is the source of all general freehold land.

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Further Terms Of Sale

Any additional agreements made between the buyer and seller that are, recorded in the printed terms. Where there is a conflict between the printed and inserted terms, the inserted terms prevail.

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Interest Rate

In the case of late settlement penalty interest will be incurred to the balance of the purchase price owing – generally agreements must be settled by 3pm on the settlement date.

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Legal Description

The legal description is taken from the property’s Certificate Of Title. It generally includes the area in square meters (m2), lot number, the Deposited Plan Of Survey and register reference.

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Mortgage

The document which is registered against the Certificate Of Title where you grant to a Lender security over the property for a loan(s).

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Mortgage Broker

A mortgage broker will organise a mortgage (loan) for you, providing you meet certain criteria.

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Mortgagee

The person(s) giving a mortgage in favour of a Lender – called the mortgagor.

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Notice Of Acquisition

First Class Legal will organise a Notice Of Acquisition if you are buying a house. This will be forwarded to the State Revenue Office, Local Council and relevant Water Board upon settlement informing them of the change of ownership.

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Notice Of Disposition

If you are selling your house First Class Legal will organise a Notice Of Disposition. This will be forwarded to the Local Council and relevant Water Board upon settlement informing them of the change of ownership.

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Possession

This may be actual physical possession by the purchaser. It also includes the situation where the purchaser has allowed a tenant into physical occupation in exchange for the right to receive rent from the property.

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Property

“Property” includes land and buildings.

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Registered Proprietor

The name/s listed on the property’s Certificate Of Title are the registered owners or proprietors.

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Requisitions On Title

Requisitions On Title are a series of questions relating to a title. The buyer’s conveyancer has 21 days from the signing of the contract of sale to make the requisitions. The purpose of the requisitions is to uncover any details not disclosed in the Section 32. First Class Legal can assist you with any questions that you may want answered before signing the Contract Of Sale.

When a property is sold, the buyer and vendor must both sign a Transfer Of Land. This document transfers the ownership from the vendor to the buyer once lodged at the Titles Office.

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Section 32 Statement

Prior to a contract of sale being signed, A Section 32 Statement or Vendor’s Statement must be provided to a potential buyer.

A Section 32 contains detailed information on council rates; charges affecting the property, location of any easements, zoning, restrictions, and any building approvals given over the past seven years.

If you are selling your house or property First Class Legal can prepare your Section 32 Statement prior to the sale of your property.

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Settlement

The settlement date is specified in your Contract Of Sale and is the day that the purchaser takes possession of the property. – if the date is on a weekend or public holiday then settlement is the first Business Day after.

The parties involved in the settlement process are the purchaser’s lending institution, the purchaser’s conveyancer, the vendor’s lending institution and the vendor’s conveyancer. These parties meet at a mutually convenient time and place on settlement day to finalise the transaction. The purchaser and vendor are not required to attend settlement.

Once settlement is in place, all related parties will be contacted. If you are buying a house you will be able to collect the keys to your new property from your Real Estate Agent.

Upon settlement, the balance of the purchase price as set out in the Vendor’s settlement statement is by the purchaser. The seller must also give the Buyer the signed transfer document, and any other documents required to register a clear transfer of title, only one key is required to be handed over, we recommend that new purchasers change the locks as they have no way of knowing who holds existing keys to the property and possession as agreed.

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Settlement Statement

This statement shows relevant outgoings and incomings on the property including rent paid or received, rates, the deposit paid, licence costs and sets out whether the Buyer or Seller pays the rates and any other costs.

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Stamp Duty

The State Government charges stamp Duty whenever you purchase land. If you are borrowing money for your purchase your lending institution will collect all Stamp Duty and registration costs. If you are using your own money for the purchase we will lodge the documents on your behalf. If you have any questions in relation to the amount of stamp duty charged please don’t hesitate to contact us.

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Statement Of Adjustments

A Statement Of Adjustments is made before settlement to ensure that the Vendor pays their Local Council Rates and Water Rates and Land Tax (if applicable) right up until settlement date, with the purchaser paying from settlement date until the next charging period. A breakdown of payments made to all parties eg. council are included in the statement of adjustments.

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Statutory Declaration Of Chattels (Goods Statement)

This document confirms the price paid for the property. Its purpose is to declare to the State Revenue Office that the vendor has not sold any other goods along with the property that may also be liable for stamp duty.

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Title Of Ownership

There are two types of co-ownership.

Joint Ownership is the most common choice. If the title is owned as joint owners then each party has an equal share. If one of the owners passes away then all ownership is automatically transferred to the surviving party irrespective of what is stated in the deceased will.

Ownership in Common is usually the choice of unrelated parties. If the title is owned as Tenants in Common then each owner has a share in the property, shares can be in unequal shares and the Transfer if prepared under the purchasers instructions. In the event of one of the owners passing away their share in the property goes to whomever they have directed in their will.

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Transfer Of Land

When a property is sold, the buyer and vendor must both sign a Transfer Of Land. This document transfers the ownership from the vendor to the buyer once lodged at the Titles Office.

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Unconditional

When all the conditions of the agreement have been fulfilled or satisfied and notice of this has been communicated by the Buyer or Seller.

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Vendor

The Seller of the house or property.

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Vendors Obligations

Prior to a Contract Of Sale being signed by a purchaser, the seller must provide the buyer with a Vendors Statement (also known as a Section 32 Statement). This document provides the buyer with certain information about the property, such as the zoning, services, rates, but to name a few. Please note a contract signed without first providing a Vendors Statement is voidable by the buyer.

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Warranty

A statement containing certain matters of fact on which a purchaser can rely.

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