Beware of Stamp Duty!

Purchasing a property is usually a huge milestone in most people’s lives. Whether you are purchasing your first home, upgrading to a larger property or purchasing an investment property, buying a house is an extremely exciting time. However, during this time, it is important to realise that the purchase price is not going to be the only cost associated with securing your new property!

When budgeting for your property purchase, it is important to make sure you consider all financial aspects of the transaction. One of the key costs that is often overlooked by prospective buyers is Transfer Duty, which is more commonly known as ‘Stamp Duty’ (even though it hasn’t officially been called this for many years!).

What is Stamp Duty?

Stamp Duty is a tax owing to the State Government’s Office of State Revenue on most ‘dutiable transactions’. A dutiable transaction includes purchasing a property or transferring an interest in a property, either from one person to another or into a separate entity (eg. transferring from a person to a Trust or Company). Stamp Duty is calculated based on the higher of the purchase price payable or the value of the property in the transaction, meaning that the amount payable can vary significantly. It also means that in many cases where you are receiving an interest in a property for free or at a discounted price, stamp duty will still be payable on the total value of the property.

Stamp Duty Concessions and Exemptions

You may be eligible for certain stamp duty concessions or exemptions, depending on your situation and whether you meet the specific criteria applicable. For example, first home buyers who are purchasing a property for under $500,000.00 may be eligible for the first home concession. This concession can only be accessed by a person that has never owned property anywhere in the world, who is purchasing the property as an individual (eg. not using a Trust or company).

Buyers who have owned a property previously but are purchasing the property in question as their primary residence, may be eligible for the home concession.

If you are purchasing a property in a Company or Trust, you will not receive the first home or home concession despite you living in the property and you will need to pay stamp duty at the highest rate.

When Else is Stamp Duty Payable?

Whilst purchasing a property is the most common scenario in which the obligation to pay stamp duty will arise, there are several other situations in which it may need to be paid. Check out our EL's recent video, 'Stamp Duty Explained', for more details regarding some of the other common scenarios in which stamp duty will be payable.

Stamp Duty Top Tips

When you are thinking of purchasing your next home, don’t forget to consider how much Stamp Duty you will be payable in addition to the purchase price, how you are going to fund the payment of stamp duty (eg. if you are getting finance, will you need to add it to your loan) and what Concessions or Exemptions you may be able to apply for.

If you would like come clarification on what Stamp Duty you will be paying on the purchase of your next property, contact EL's Property Conveyancing team today:

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🌐 | Property Conveyancing Services

Purchasing a unit that is still getting built at the time of signing the contract seems hassle free, and a weight off your shoulders with not having to think about costing, delays, daily discussion with builders and to be presented with a brand-new beautiful unit at the end!

In some sense, purchasing off-the-plan can be great, but because of the lack of control during the build process, there can be pitfalls too! Ensuring that you obtain the benefit of enforcing the warranties with the builder is one of the most important things to do when you are purchasing to ensure you can continue on hassle free once settlement has occurred. 

What Are Warranties And Why Are They Important?

A warranty in a construction contract is written guarantee given by the builder to the owner that they will fulfil their obligations under the contract. Some of the most important warranties that are commonly in construction contracts are:

1. that the materials used will be of good and merchantable quality;
2. that the work will be carried out in a good and workmanlike manner;
3. that the work and materials used to complete the works will be fit for purpose; and
4. that the materials used and the completed works themselves will be reasonably fit for the purpose for which they are required.

It is obvious to see why every owner would want to see these warranties in their construction contract. These warranties set a standard for the industry and will ensure that your home is built correctly and safely by qualified people.

Another imperative contract term that is common to explicitly see in a construction contract is a defects liability period. This is usually one year from the date of completion. This allows the owner to call upon the builder for any defects that has occurred in the building and the Builder must come and rectify that defect within a reasonable time period.

Minor defects are common in the first 12 months post construction, this is why the defects liability period and warranties are so important. 

If a warranty is not fulfilled by a Builder or the defects liability period not complied with, the Builder  would be in breach of the construction contract and the other party to the contract typically has a  claim against the builder to force them to comply. 

Who Would The Warranties Be Given To In The First Instance?

Just like any construction contract, the Builder would be providing warranties to the person that has engaged them to build the unit. In this case it would be the person/developer that is selling you the finished unit. 

In some instances, the Developer can be the Builder, and, in that instance, there would most likely not be a construction contract in place. 

What About Home Warranty Insurance?

Whilst the Home Warranty Insurance (that is required to be undertaken before any works is commenced) stays with the property, which means an incoming purchasers may be able to rely on it , there are other things to consider that may not be included under that scheme. For example, any manufacturer warranties in respect to any of the work under the construction contract or goods and equipment like appliances, washing machines and/or garage roller doors that also form part of the work under the construction contract. Equally, there are a number of pre-set criteria that must be met prior to being eligible for the Home Warranty Insurance, and home owners are often left out of pocket because the scheme doesn’t apply to them and their circumstances on the basis of specific criteria not being met and/or exclusions. 

It is also important that you do a search of insurance when purchasing the property to ensure that the Builder has actually taken out that insurance that they are required to on the property.

What Does That Mean For You As The Purchaser?

Unfortunately, what we see at Enterprise Legal, is people who find themselves with defects in the property or with the equipment provided, and very little to no control in being able to get this fixed. Due to the lack of assignment of the warranties under the Property Contract, the Seller ‘wipes their hands clean’ once settlement has taken place and the have received their funds from the sale. Without the correct documents and special conditions in place in your Property Contract, you would have no right to ensure the builder replace the defects (e.g. roller door, air conditioning unit, defective roofing system etc.).

How Can You Ensure You Can Enforce Those Warranties Once You Have Purchased The Unit And A Defect Occurs?

To ensure that you have the benefit to enforce the warranties with the Builder once settlement has taken place, you should make sure the warranties under the construction contract between the Builder and Seller are assigned to you. It is important to cover off on the assignment of warranties prior to signing the Property Contract. As such, at Enterprise Legal, we recommend a Deed of Assignment of Warranties is put into place between yourself, the Seller and the Builder. This Deed will ensure that any warranties provided to the Seller by the Builder under the Construction Contract is assigned to you so you may rely on them should a defect occur in your unit once settlement has taken place. Typically, Builders also have a 12 month defect liability period post construction, during which period they have an obligation to rectify defects promptly and effectively. The Deed can also assign this defects liability to you, as the incoming Purchaser. 

At Enterprise Legal we recommend to all clients that the engage us to review their draft Property Contract, not only from a property perspective, but from a construction perspective to ensure that things like warranties are considered as it can be something easily missed and unfortunately could cost a Buyer a lot of time and money down the track should it not be address at the beginning of the process. 

If you are looking to purchase an off -the-plan unit and need assistance, please reach out Enterprise Legal's expert property conveyancing team:

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When buying or selling your property and going through the conveyancing process, it's not uncommon for both the buyer and the seller to have a lot of questions.

These can relate to from how the entire process works, to specific questions about the documents you receive from us. Below are just a few of the questions we often get asked at Enterprise Legal and their answers. 

Should I Get My Draft Contract Reviewed?

Yes, it is important for both Buyers and Sellers to get the draft contract reviewed. Small administrative errors such as misspelt names or incorrect property details have the potential to cause delays of Settlement or even financial loss when getting the contract amended. It is also important to be aware of all of your rights and obligations under the contract before signing and to ensure everything that has been agreed between the parties is documented correctly prior to signing. 

Why Is There So Much Paperwork?

Conveyancing in Queensland is guided by a considerable number of State and Federal Legislations as well as specific guidelines which need to be followed. Due to this it is critical that we provide you with as much information as possible outlining your rights and obligations under the contract and equally obtaining as much detail of yourselves and the property to ensure we can meet all of the requirements. It is, after all, a substantial investment you are making! Our First Letter Pack contains a questionnaire that we require you to complete which will provide us with all the information you know about the property, so we then have that knowledge and we can tailor our advice to you based on your specific circumstances and the property. 

Why Do I Need To Do The Essential Searches? (Buyer)

The essential searches that we undertake are completed for multiple reasons. Searches like Rates and Water Meter Readings are done to ensure that at Settlement, the correct adjustments can be made to account for the Sellers portion of the levies for the current period and that any unpaid rates with Council have been paid. Searches like QCAT and Court Searches ensure that there are no proceedings against the Sellers and/or there is nothing affecting the seller’s ability to sell the property. It is important to do these searches now to avoid potential consequences later or even after Settlement. 

How Do I Get My Keys Following Settlement? 

Once Settlement has taken place, we will give you a call to confirm the exciting news. We then confirm with the Agent that they are authorised to release the deposit to the seller and to release the keys to the buyer. This is when you arrange with the Agent directly to collect the keys.

If it is a private sale, keys can be exchanged at settlement with the Solicitors, or between the Buyer and Seller directly. 

At Enterprise Legal we aim to make the process of buying or selling your property as streamlined and stress free for you as we can. Most importantly, this is an exciting time for you and we want you to feel that way!

If you are in the process of purchasing a residential property, EL offers a competitive fixed-fee rate of $1,350 inc. GST + disbursements, and if you are selling your residential property, our fixed fee is $880 inc. GST + disbursements.

Get started today; contact EL’s Property Conveyancing team for a hassle-free property transaction:

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Often to get the best deal (or even to get the deal done at all) on a new property purchase, you will need to refinance your existing loans to a new bank. Seems simple yes? Well, when you refinance at the same time as purchasing a property, it adds a whole extra layer to your transaction and as such, there are some important things you need to keep in mind during the process.

You Need to Drive Your Refinance Process

As we (your lawyers) are acting for you in relation to your purchase transaction and not the refinance transaction, this means we have limited ability to drive the matter, as your old financier will not discuss the matter with us as we are not a party to the transaction. It is important that you and your Broker (if you have engaged one) ‘drives’ this matter by completing the relevant forms needed as soon as required and checking in to ensure both banks will be ready by the Settlement Date under you property contract.

Why is it Important to Drive Your Refinance Process?

Most of the time, you will be refinancing when purchasing a property which means that it will happen simultaneously (eg. at the same time) with the settlement of your property purchase on Settlement day. This means if your refinance is not ready due to either your old or new financier not being ready, then your purchase transaction will not be able to proceed, placing you in breach of your contract. 

Keep Us Updated!

It is important to tell us from the start whether you are refinancing or not. As we don’t have the privilege to see how the refinance transaction is tracking, it is also important to keep us updated on how it is progressing. This also means letting us know what the outgoing (old) bank’s ‘payout figure’ is (eg. how much money you have to give them to leave), so we can ensure that your new loan covers not only the refinance with your outgoing bank but also your purchase transaction as well. 

Between ourselves, you and your Broker, it is a collaborative effort to ensure your refinancing transaction and property transaction runs smoothly with no hiccups.

Ensure a smooth transaction and getEnterprise Legal's expert conveyancing team in your corner when you buy your next property by getting in touch with us today: 

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🌐 | Property Conveyancing Services

When selling your property there are several people involved in the process but three of those key players are your conveyancer, yourself, and your mortgagee / bank if applicable. 

We all have a different role, but we all are working towards and want the same outcome. There is a common misconception that your Conveyancer will take the reins and do everything to complete Settlement on your behalf. Whilst it is our job to guide and assist you, there are certain limitations of what we can do on your behalf. 

Sale of Property When There is a Mortgage 

You have secured a contract of sale for your property and engaged a conveyancer, happy days.  

Who else needs to know? Your Mortgagee / Bank / Lender.

Who needs to tell them? You. 

A Mortgage is a financial agreement (Loan) between yourself and your Lender. If your property has a Loan associated with it, you cannot sell it unless the Loan has been paid out and the Mortgage is released at settlement. This involves you completing the necessary paperwork with your Lender to request for the Loan to be released. Part of that process includes you listing us as the Conveyancer acting on your behalf for the transaction, and thus authorising us to speak to you Lender about it. 

Your Lender will not get in touch with us or speak to us about your matter until they have received the completed Release of Mortgage request from you, and you have nominated us as your Conveyancer.  

The lead time for your Lender to be ready to release the Loan is hard to predict as there are many contributing factors. An example being that your Lender may be waiting on valuations to be conducted of other securities you own which could add substantial delays to the normal processing time required to Release the Mortgage. Therefore, we encourage our clients to attend to the process of arranging the Release of Mortgage as soon as possible. Whilst we cannot complete this request for you, we make sure we advise you of this requirement in our First Letter Pack we send out soon after receiving the signed contract. We are also always ready to answer any questions you may have, regarding the Release of Mortgage

Sale of a Property When the Loan has Been Paid but the Mortgage has not been Released 

You have finally paid off your loan and your debt with the bank is over – Congratulations! 

Why are we still asking you to arrange for the Mortgage to be Released? Because the Release of Mortgage has not actually been registered with Land Titles and the Mortgage is still on the Title. 

When you purchase a property and borrow money to do so, your Lender will register a Mortgage over the Title after Settlement to confirm the Loan agreement. 

Once you have paid off the loan amount, the Loan can be released from the Title, but to do so a Release of Mortgage needs to be obtained from your Lender and registered at Land Titles. Your Mortgagee may arrange to do this for you, or you may be provided with the Release of Mortgage for you to arrange for it to be registered.
It may be that when it comes time to sell the property, you have not yet arranged for the Release of Mortgage to be registered. 

If this is the case, the Release of Mortgage needs to be registered at the Land Titles before Settlement. Alternatively, you can provide the physical Release of Mortgage to us, and we can provide at settlement to the Buyer’s Solicitor. 

In Conclusion 

There is a lot involved when you are selling your property but at Enterprise Legal, our main aim is to try and make the process as stress-free as possible. 

We have experience in what is involved in the process of selling your property, and what can go wrong so we know what to avoid.  

Our goal in advising our clients of the importance of this process is to avoid any last-minute delays that may attribute stress, costs or ultimately, being in breach of your sale contract due to your releasing Mortgagee not being ready on Settlement Date.

If you have any questions regarding your upcoming sale or any of the information in this article, please get in contact with EL's conveyancing team:

☎️ | (07) 4646 2621
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🌐 | Property Conveyancing Services

Building your dream home can be one of the most exciting times in your life but securing the perfect location can be difficult in some circumstances, especially in the current market.

One of the ways to secure your dream block that is becoming increasingly popular is purchasing property ‘off the plan’. This simply means that the 'Lot’ (or block) you are purchasing has not yet been ‘created’ by the developer at the time of signing your land Purchase Contract. While purchasing off the plan can seem like a great way to secure your dream block, it is important to understand some potential issues you may face with this strategy.

Sunset Date

A Sunset Date is a date inserted in your Purchase Contract to say that the Seller must ensure the Lot has been created with the Titles Office by this date. By law, a Seller can take up to 18 months to do this. It is important to look at this date before you sign your Contract to make sure it fits in with your plans for the property, especially if you are planning on building straight away.

There are two approaches that a Seller may have in relation to a Sunset Date. Under the first approach, they may have a shorter timeframe, knowing that the subdivision is only a few months away from being completed and having a shorter timeframe is obviously more attractive to potential buyers. However, whilst you may think that the land will be subdivided by the date specified in the Contract, some key steps (i.e Ergon connection, council sealing) may take longer than expected and push dates out, meaning the Seller will need to ask for an extension of the Sunset Date to accommodate these delays. In these circumstances, you can agree or otherwise terminate the Contract, missing out on your ‘dream block’.

Alternatively, a Seller may include the full 18 months in the Contract as the Sunset Date even though they are expecting the works to be completed in 6 months (for example). The reason why sellers do this is to leave extra time ‘up their sleeve’ legally under the Contract, should progress be pushed back.

As a Buyer, it is extremely important that you understand that even though you may have been told by the Seller or real estate agent that the subdivision will be completed by a certain date, you will not really have the ability to rely on these representations, if they don’t match the timeframes and dates specified in the Contract. The takeaway here is to prepare for the ‘worst case scenario’ timeframe (eg. 18 months) and don’t get sucked in if the Seller or the agent make you promises to the contrary!

Build Contracts

As a Buyer, arguably the exciting part of this process is the actual building of your new home. Unfortunately, a lot of people rush into signing a build contract without fully understanding what some ramifications may be should there be a delay in the purchase of your block of land settling (refer to our comments above).

With the current state of the market and the construction industry, price increases are common. This is due to a range of factors, including an increase in the price of materials, supply chain issues and shortage of labour. If you sign your Build Contract around the same time as your land Purchase Contract, there is real potential for these costs to increase significantly over a potential 18 month period.

Even if you have a ‘fixed price’ Build Contract in place, it is important to check that there are still not any clauses in the Contract that allow for a price increase in certain circumstances. During these times, builders are relying heavily on these clauses to increase the contract price. Most standard contracts allow for the builder to increase a fixed price if there are material increases that ‘were outside of the builder’s control’.

Secondly, delays with your land Purchase Contract settling may cause issues with your Build Contract, depending on the anticipated start date included in your Build Contract. Should the builder not be at fault for the delay under you Build Contract (for example, if settlement of the land has been pushed back), you may need to pay the builder delay damages for each day that they are unable to commence the build. This is why it is so important to consider the Sunset Date in your land Purchase Contract and how this will affect your anticipated start date under your Build Contract, despite what you may have been verbally told by the seller or agent.

Given the potential severity of the above issues, we highly recommend that any Buyer who plans to build obtains legal advice on both your land Purchase Contract and your Build Contract, to ensure that both contracts work together to protect you from incurring unintended costs. . Unfortunately, at Enterprise Legal, we have seen dozens of times where this has occurred during the last two years, where clients should have had their Contracts reviewed.

If you would like to know more or for assistance with obtaining legal advice when purchasing vacant land ‘off the plan’ to build your dream home, please get in touch with EL's expert Property and Construction team:

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🌐 | Property Conveyancing Services

Subdividing property has the potential to increase the value of the land and ultimately increase your return on investment. Whilst the allure of potential profit can cause you to ‘rush in’, it is vital that you understand the requirements, processes and associated costs prior to embarking on the subdivision bandwagon! 

What is ‘Subdividing’?

The process of subdivision involves splitting your existing property/land (or ‘lot’ as it is known technically) into two or more new lots. Subdividing can also be undertaken by adjusting the boundaries between two or more lots, to make some lots smaller or larger. Most subdividing activities require a development approval from your local Council.

What is Involved in the Subdividing Process?

The first step in investigating a potential subdivision process is to obtain advice from a professional town planner. A town planner will be able to inform you of any potential restrictions or limitations with your proposed project. It is important to know about these matters early on in the process, so that you can determine if your project will be commercially viable prior to investing a lot of time and money into it!. . Your town planner can then assist you with any application to your local Council to gain approval. It is important to note that there will be applicable fees for this application and any approval will be subject to certain conditions being met. These conditions must be complied with and again payment of any fees associated with this will need to be made. 

You will also need to engage a certified surveyor to prepare a Survey Plan (eg. a technical plan showing the measurements and other features of the new lots) in the appropriate format. There may also be other plans that will be required to be prepared as part of the conditions imposed by Council. 

Once Council has ‘endorsed’ (a fancy word for signing off) all the documents, they can now be lodged with the Titles Office and once the documents have registered, the lot is created – magic! The new lot(s) that has been created can now be sold to a potential buyer. 

Can I Sell the New Lot to a Buyer Prior to Completing my Subdivision?

Yes – marketing and selling a lot or lots prior to them ‘existing’ is called ‘selling off the plan’. There are specific disclosures that must be given and certain special conditions that must be included in any ‘off the plan’ contract, so it is important that you engage real estate agents and lawyers (like Enterprise Legal) who are experienced with these specific types of contracts. 

Ultimately, it is important to weigh up whether or not you are better off  waiting for the proposed lot to be approved and created, to ensure the contract can go ahead and will not need to be terminated if the project does not ultimately proceed. Of course, this needs to be balanced with the potential benefit of ‘locking in’ a potential buyer in a hot market.  

What Does Subdividing Cost?

A large deciding factor in whether to go ahead with a subdivision project is of course the costs involved! Accordingly, when preparing a project budget, you should factor in the following costs at a minimum: 

1. Surveyor Fees; 

2. Town Planner Fees;

3. Council Fees;

4. Legal Fees;

5. Titles Registration Costs;

6. Holding Costs, such as land tax and Council rates;

7. Agent's Commission; and

8. Marketing Costs.

It is also imperative that you speak with your accountant to discuss any potential tax or other financial considerations in relation to the proposed project.

Need Assistance With Subdividing Your Property?

If you are interested in subdividing your property, contact the specialist Property and Business lawyers at Enterprise Legal to discuss how we can assist you further.

We can assist with all aspects, from providing you with initial advice on the project, through to managing the ultimate sale of the lots.

We work closely with your other professional advisors (and can even recommend trusted town planners etc.) to ensure that the project progresses as smoothly as possible.

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On 21 July 2022, the Real Estate Institute of Queensland (REIQ) released new versions of the Contract for Commercial Land and Buildings (9th edition) and the Contract for Commercial Lots in a Community Titles Scheme (8th edition).

The latest editions contain many amendments that have been made to align with the recently-amended REIQ Residential contracts that came into effect earlier this year, as well as some further changes made specifically to these commercial contracts:

New Termination Rights

Buyers now have a termination right if there is:

1. an error in the boundaries or area of the property;
2. an encroachment by structures onto or from the property;
3. there are services that pass through the property which do not service the land and are not protected by an encumbrance disclosed to the Buyer in the contract; or
4. a mistake or omission in describing the property of the Seller’s title to it.

Equally, should there be any services to the property that pass through other land (e.g. a neighbouring property) that are not protected by a registered easement, building management statement or statutory authority and it has not been disclosed to by the Seller to the Buyer in writing before the Buyer has signed the contract, the Buyer may terminate the contract.

So what does this technical jargon actually mean? It means that it is vital that sellers complete searches such as a ‘Dial Before You Dig’ or similar prior to entering into the Contract, so that they are aware of the location of all services and any potential encroachments or errors in boundaries which may need to be disclosed to the Buyer. Failure to do this could give the buyer a convenient excuse to terminate the Contract later down the track.  

Warranty of Present Use

The standard REIQ Contracts now stipulate that the seller does not warrant that the Present Use that is noted in the Contract is lawful. For example, this means that even though the present use of the property might be a ‘gym’ or ‘fitness centre’, that does not mean that a gym of fitness centre is lawfully allowed to be carried on from the property. . Further, in clause 7.7(1), if the present use is not lawful under the relevant town planning scheme, and the Seller has not disclosed that to the Buyer, the Buyer may terminate the contract. 

Consequently, it is very important for buyers to consider whether the use of the property is lawful for a particular use and to ensure they undertake appropriate due diligence to verify this, instead of simply ‘taking the Seller’s word’ for it. Equally, as a Seller, it is important to disclose if you are unsure whether the current use of the property is lawful. We highly recommend disclosure to the Buyer even if you are unsure to avoid the buyer relying on potential termination rights in this regard. 

Lease Warranties

Clause 10.3 now provides a large list of matters the Seller warrants that are correct as at the contract date in relation to current leases over the property. If there is a change in any way to these warranties during the Contract period (eg. between when the Contract is signed and settlement), the Seller must notify the Buyer of the change. 

Settlement Extensions

This new concept allows either party to unilaterally extend Settlement by up to 5 Business Days after the Scheduled Settlement Date specified in the Contract. This mechanism only applies to Settlement and does not apply to other conditions like the Finance or Building and Pest Condition. 

Default Place for Settlement

The standard condition has been amended so that if a Seller does not advise the specific location for Settlement (e.g. the specific law firm) at least 2 Business Days before the Settlement Date, Settlement will be required to take place at the Titles Office closest to where the land is located. Given the erroneous results this condition could result in, we recommend including a Special Condition to amend it.

Summary

There have been some significant changes made in the latest REIQ Contract updates for commercial buildings and units and it is important that parties understand what these mean and include appropriate Special Conditions to amend the Standard Condition if required. 

If you are purchasing or selling a commercial building or unit and would like guidance from Toowoomba's finest, you can get the ball rolling by contacting EL's conveyancing team:

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Thinking of buying or selling a property at auction? Here are some crucial tips:

What’s the Process? 

The contract for a property sold at an auction is required to be signed ‘on the spot’. This is different from other transactions, whereby the parties have time to have their respective legal representatives review, advise and amend the draft contract prior to you signing it. 

Because of this, we highly recommend that you engage a conveyancer to review the contract prior to going to Auction.  This can be done by contacting the sale agent and asking them to provide you with a draft contract for us to review on your behalf. 

Whilst an Auction contract is typically not subject to any conditions, it is still important that we check over the details of the property to ensure that the correct information has been inserted.  It is significantly more difficult to change certain aspects of the contract once it has been signed, thus part of our service includes a free review of the draft contract. 

The Fall of the Gavel 

It’s important to do any research regarding the property and confirm your financial ‘buying power’ prior to attending the auction and making a bid. This includes meeting with your broker or lender to ensure you have finance preapproval to purchase the property. You may also want to consider whether you can arrange a building inspection or obtain information from the selling agent prior to the auction to investigate the property. 

As previously mentioned, an auction contract usually comes with no conditions (eg. they are not usually subject to you obtaining finance or being happy with the results of a building and pest inspection), so it is important to understand that as a buyer at an auction, you won’t have the standard termination options available and will be in hot water if you can’t complete the purchase for any reason. 

If you cannot attend auction, you may elect to authorise a buyer’s agent to sign the contract on your behalf.

The Auctioneer’s Authority

We have seen instances recently where the contract has been signed by the Auctioneer as authorised representative of the buyer or seller. There are two main scenarios where this occurs:

1. some Agents will specify in their Auction Terms and Conditions that by agreeing and signing them, you grant the Auctioneer an irrevocable authority to sign all documents and papers necessary to form the agreement for sale of the property with the Buyer. It is therefore extremely important that you provide clear instructions to your agent and auctioneer regarding the reserve price etc; and

2. an Auctioneer also has authority pursuant to common law to sign a contract on behalf of the buyer or seller if the hammer has fallen and a party refuse to sign the Contract. Changing your mind isn’t that easy! 

Final Auction Tips

Buyers - it is important that you don’t get carried away at auction and end up being required to purchase something that you may have ‘buyer’s regret’ in relation to. Make sure you do your due diligence prior to the Auction and that you don’t bid over your budget.

Sellers – make sure you are 100% comfortable that the agent and auctioneer have clear instructions regarding the price that you are happy to sell for and again, don’t get caught up compromising on the day. 

In either case, it’s best to seek advice from your lawyer before buying or selling at auction. Contact Enterprise Legal's experienced conveyancing team now for more expert advice:

☎️ | (07) 4646 2621
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🌐 | Property Conveyancing Services

One of the first questions we ask our clients that are purchasing a property is: “Will you be moving into the property after settlement?”

The answer is normally either “yes, I can’t wait to move in” or “no, I am not moving in as this is an investment property”.

But sometimes there is a third scenario- where our client has found their dream house that they want to move into as soon as possible but there is a tenant in the property.

Whilst this situation is less than ideal, there are still a couple of options available for you to consider. Part of our service includes reviewing the draft contract prior to signing. This is particularly important when a tenant is involved as we can check that the critical dates ‘line up’ in relation to both applicable notice periods, and the transfer (stamp) concession eligibility requirements – read on to find out more.

Getting the Tenant to Leave

It’s important to know what type of Tenancy Agreement is in place, as this determines the notice period that must be given to the tenant to require them to vacate.

For a periodic agreement the tenant has four weeks to vacate when a sale contract is in place for the property.

However, if there is a fixed term agreement in place the tenant has the later of 2 months from the day of notice, or the date on which the fixed term agreement ends to vacate the property.

Notice is not normally given until the contract goes unconditional (as understandably, the Seller won’t want to kick their tenant out unless they know that the property is definitely being sold), so it is important to allow sufficient time between the notice being given and settlement.

Of course, the tenant can agree to leave early at their own discretion but with no guarantee of this, it’s important to understand the relevant notice periods at the time of entering into a contract.

Transfer (Stamp) Duty Concession Requirements

Transfer Duty (often referred to as ‘stamp duty’) is a government tax charged on most property transactions, with the amount payable dependant on the purchase price and whether or not the purchaser can claim a concession or exemption.

As an owner/occupier intending to move into the property, you may be entitled to claim either the First Home Concession if you have never owned a property before or the Home Concession if you have previously owned property before. These concessions mean that you save a significant amount on the ‘full rate’ of transfer duty, which is otherwise payable (including if you are purchasing the property as an investment).

A key eligibility requirement to receive either concession, is that any tenants occupying the property under an existing tenancy agreement must move out when their lease expires or within 6 months of settlement at the latest, whichever is the earlier. This also applies to previous owners who may be living in the property for a period after settlement.

If you claim a concession and the tenancy doesn’t end within the required timeframe you will then need to notify the Commissioner of State Revenue by completing a Notice of Reassessment and pay the higher stamp duty amount. Therefore, it is very important to understand the eligibility requirements and ensure that you can comply with them.

Taking Possession

Once the tenant has vacated you will likely want to inspect the property to ensure no damage has been caused and that it has been appropriately cleaned and the tenant has otherwise complied with their end-of-lease obligations.

Any issues that come up at the inspection should be discussed with the selling agent and managing agent (if applicable) so that it can be dealt with by them and the tenant’s bond utilised if possible.

In the event that this is not possible, we can provide advice on any other options you may have before settlement.

Enterprise Legal’s Top Tips

1. Talk to the selling agent when putting in your offer to find out about the terms of the tenancy and if the tenant has any intentions of vacating earlier than required;
2. Have the contract reviewed by us prior to signing and discuss any concerns you have about the tenancy with us at the same time; and
3. Understand that if you claim a stamp duty concession and subsequently do not meet all of the requirements, you have an obligation to notify the Queensland Revenue Office and you can be subject to penalties for giving false and misleading declaration if you do not give that notice.

Are you in the process of purchasing a property? Contact Enterprise Legal's experienced conveyancing team now for more expert advice:

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