Sell a Real Estate in Victoria- What to do? Key takeaways from HN Conveyancing.
Selling a house or property is becoming more stressful now as the vendor has more legal requirements to meet. These are key takeaways for you when selling your property in Victoria that you should be mindful of:
1. Section 32 and Contract of Sale
In the first step, you must engage a Real Estate Agent to advertise to sell your home. The next is you also need to engage a conveyancer to prepare section 32 and a contract of sale. Section 32 is a vendor statement to be provided to any prospective purchasers before you can enter contracts with them. Section 32 (Sale of Land Act 1962) is a statement that reflects true information, condition and your knowledge about the property at the time of sale. There are certain requirements of what needs to be disclosed.
The consequence of not providing section 32 to a purchaser before signing a contract or failing to provide all required information might lead to the purchaser ending the contract any time before settlement (Section 32K).
You should also have your section 32 updated, especially when your property has been on the market for a while and there are changes to the property, such as a building notice received from the Council, a road enhancement, or a special levy raised.
2. GST, Capital Gain tax
If the property is a brand new property or vacant residential land, or commercial property, the sale might be subject to GST. If you are unsure about the GST, you should consult with your accountant.
If the property is an investment, you should be mindful that you might have to pay Capital Gain tax when completing your tax return. You should have an amount set aside from the sale proceeds to pay the tax to ATO.
3. Material Fact guideline
Material Fact Guideline is published by Consumer Affairs Victoria that details what the vendor needs to disclose when selling a property under section 12d, the Sale of Land Act 1962. It is an offence for the vendor not to disclose such material facts under the Act.
"The change to section 12(d) means that it is an offence if a vendor or agent knowingly conceals a material fact about land for sale, with the intention of inducing a potential purchaser to buy the land. It is not necessary to show that anything active was done to conceal the material fact, although doing so knowingly will still be an offence."
A Material Fact can be a defect in the structure of the building, a termite infestation, combustible cladding, asbestos, a significant event at the property, including a flood or a bushfire, a history of pesticide use, a restriction on vehicular access, illegal building works without a require a building permit, planning permit, if there was extreme violence such as a homicide, use for the manufacture of substances such as methylamphetamine during the current or previous occupation.
Further details can be accessed here:
Material Fact Guidelines - Consumer Affairs Victoria
https://www.consumer.vic.gov.au
4. Owner Builder works within 7 years
If you have any building work within 7 years preceding the sale carried out by a Registered Builder, you must disclose in section 32 any building permits details, the Registered Builder Domestic Building insurance, Certificate of occupancy or Certificate of final inspection.
If the building works were done by an owner builder, you must disclose any Building permits details, an Owner Builder condition report (or so-called Owner builder defect reports) issued within six months, the certificate of Domestic Building insurance if the building works value (not the cost) is more than $16,000 to comply with Section 137B of the Building Act 1993 (Vic).
There is also an implied warranty under building law applied to all building works. Please refer to the Owner Builder checklist published on the Consumer Affairs website for more details: https://www.consumer.vic.gov.au/housing/building-and-renovating/checklists/owner-builders
For more details, please contact HN Conveyancing at 041277 0215 or info@hnconevyancing.com.au
5. Section 27
Section 27 is a statement of the vendor to use to seek an early release of deposit monies from the purchaser prior to settlement. Deposit generally is being held in the Agent's trust account. Section 27 contains particulars of the mortgage (if applicable) and information on any caveats on the title (if applicable). With a property having a mortgage on title, generally, we will need to obtain a letter from the mortgagee confirming these particulars in section 27. Once served to the purchaser, the purchaser has 28 days from the day of serving to object to the request. If the purchaser does not object to section 27 within those 28 days, which means the purchaser is deemed to satisfy Section 27, the deposit can be released to the vendor. The Agent is also entitled to their commission at the time of the release.
For more details, please contact HN Conveyancing at 041277 0215 or info@hnconevyancing.com.au
6. Vacant possession/ Tenant
Having a tenant and the property has been sold with vacant possession. It is best that you serve a Notice of Vacate to the tenant as soon as possible, as there is a certain time period required by law before the tenant vacates. This is very important as the vendor sometimes forgets to follow up with the tenant managing agent, especially when the sale Agent is not a tenant managing agent. If the Notice of Vacate is not served in time, this can lead to the tenant not moving out before settlement, and the settlement might not happen. And of course, the delays in the settlement are the vendor's fault, and there are consequences that the vendor might have to remedy for the purchasers.
The vendor should be mindful of the condition report when having a tenant.
For more details, please contact our office at 0412770215 or hanh@hnconveyancing.com.au
7. Vendor's warranty
As per the general condition of the sale contract, the vendor must deliver the property in the same condition as it was on the day of sale, except for fair wear and tear. You should ensure that the property remains in the same condition as it was on the day of sale.
8. Discharge of Mortgage
If there is a mortgage on the title, it must be discharged at settlement. The vendor must sign a Discharge of authority to provide to the bank in advance so that the bank can prepare the necessary documents and payout figures before settlement. The Conveyancer will take care of this process.
For more details, please contact our office at 0412770215 or hanh@hnconveyancing.com.au
9. Verification of Identity (VOI)
Each party in a real estate transaction must have their identity verified. This requirement is mandated by the Land Registry. Without completing your verification of identity, your transaction can not proceed.
Contact our office at 0412770215 or hanh@hnconveyancing.com.au for how to complete your verification of identity.
HN Conveyancing is a conveyancing firm specialising in property transfers of all aspects in Melbourne, Victoria. We have experienced conveyancers who are passionate and professional and will ensure you have a seamless transaction and keep you informed every step of the way. Contact us at 0412770215 or hanh@hnconveyancing.com.au for your first free consultation.
