It's the Little Things That Count
14/11/2014 by The Hopkins Group
Buying a property is likely to be the biggest purchase you’ll ever make. With the average median house price in Australia’s capital cities now a touch below $600,000, most buyers are aware of how important it is to cover every fine detail before signing on the bottom line.
Yet according to The Sunday Age, around “5 to 10 per cent of (property) sales are hit by some kind of serious problem that can threaten, delay or even prevent a settlement from going through.”
Often, these problems arise due to a misunderstanding between parties, or a contractual dispute that occurs between agreeing the sale and the physical signing of contracts. Here are some of the finer details to look out for before signing everything off…
Do you know what a chattel is? Of course not. Why would you? It’s a ridiculous word. But the humble chattel is a prominent example of a contractual issue that can delay or derail a sale.
Put simply, chattels are permanent fixtures and fittings affixed to the property and can include things like appliances, awnings, the TV aerial, blinds or drapes, carpets, garden plants, light fittings and other similar fixtures.
Not only should your contract detail exactly which chattels will pass to you with the purchase of the property, it should also ideally state which of them are in working order and which aren’t; it’s not entirely uncommon for vendors to remove chattels after the sale has been made – either vindictively, or because they haven’t read the contract properly themselves. And in some cases, it can also be arranged for the vendor to remove any appliances which don’t work – if this has been agreed between you and the seller, make sure the contract mentions this in detail.
If “caveat emptor” sounds to you like something Harry Potter might utter to ward off evil spirits, you’re ironically not far from the truth. Well, kind of…
Caveat emptor is Latin for “let the buyer beware”. And in the context of boundaries, it translates to “check where your property boundaries lie, because whatever happens next is your own problem”. So whether you’re buying an apartment, house or unit, make sure you thoroughly understand where your new property’s boundary lines are – or else the pre-emptive renovation plans you’ve been dreaming up could end up severely hampered.
Strata Agreements and By-Laws
Few people understand that buying a unit or apartment actually means you’re buying a share of a building. This is what’s known as “strata property” ownership and means that the residents of the whole building or development are jointly responsible for rules that govern what you can and can’t do with your property.
Strata management (what used to be known as body corps) produce bylaws which can govern everything from pet ownership to the placement of your air conditioning unit. Residents will also be liable for strata fees to cover building upkeep, which can top $1,000 per month at the more expensive end.
So before signing a contract for an apartment or unit, make sure you’ve read the strata rules and bylaws thoroughly.
The above list is just a snapshot of the many contractual issues that can knock a sale off course. As such, it’s highly advisable to have a lawyer and/or conveyancer (plenty of lawyers are also conveyancers) look over the fine print before you sign anything.
If you’re ready to find an investment property and want the journey to be as smooth as possible, call The Hopkins Group on 1300 726 082 or contact us here.
How to find the right property investment
16/05/2018 David Conner, Head of Property (NSW)
When it comes to potential investment properties, first time investors are seemingly spoiled for choice. So how do you choose one that’s right for you?
Changes to GST on property transactions
06/04/2018 Rachel Williams, Director of Accounting
Thinking about property development? Our Director of Accounting breaks down the importance of considering GST and tax obligations from the outset.
Travelling to Inspect Your Rental Property? Pause before you go
09/03/2018 Ivy Guo, Graduate Accountant
Before you claim a deduction on your rental property travel expenses, it's best to check you're eligible to continue making that claim.