Stress-Free Property Conveyancing
Congratulations! You’ve secured your dream home and contracts are exchanged. But before popping the champagne, let’s navigate the legal hurdles before settlement in New South Wales. It might sound daunting, but with TDP by your side, it can be a smooth ride.
While property inspections, contract discussions and financial arrangements are crucial pre-exchange steps, this article delves into your rights and responsibilities after the big swap. We’ll unveil the legal landscape that unfolds between exchange and settlement, empowering you to approach closing day with confidence and peace of mind.
Agreeing upon the Settlement Date: The settlement date is agreed upon and written into the contract, typically set for 6 weeks after the exchange of contracts. This date signifies when the buyer pays the seller all costs associated with the property, and any potential interest charges if the buyer cannot pay in full by the agreed-upon date and the buyer takes possession of the property.
Preparation for Settlement: Lawyers and financial advisors perform searches and exchange cheques and crucial documentation during the preparation phase. In NSW, buyers are responsible for any damage incurred up to the settlement.
Finance Approval: Ensure that your finance is in order and that you meet all conditions outlined in your loan approval. TDP can provide guidance on fulfilling these conditions and assist in liaising with your lender to ensure a seamless financing process. This can often involve taking out home insurance on your new property.
Conducting the Final Inspection: As settlement day approaches, the buyer conducts a final inspection to ensure the property’s condition aligns with the signed contract. Any unfinished repairs included in the contract are addressed during this phase.
Making Final Payments: Before the settlement date, TDP prepares a settlement adjustment statement, adjusting the price based on factors such as first-home owner grants and stamp duty concessions.
Transferring Ownership Documentation: On settlement day, the buyer’s payment is processed, and legal possession of the property is transferred. TDP facilitates the transfer documents, ensuring a smooth transition of ownership by releasing any outstanding mortgage or caveats on the property.
Legally binding: In Australia the process of buying a property involves exchanging contracts, and once contracts have been exchanged, both the buyer and the seller are legally bound by the terms of the contract. However, there are certain circumstances in which a buyer may be able to pull out after contracts have been exchanged.
These situations include:
- Cooling-Off Period: In NSW, buyers have a standard five-business-day cooling-off period after the exchange of contracts. During this time, the buyer can legally pull out of the contract without providing a specific reason. However, the buyer is usually required to pay a penalty, known as a “cooling-off fee,” which is typically 0.25% of the purchase price. Cooling off periods do not apply when a property has been purchased under auction conditions.
- Special Conditions: The contract may include special conditions that provide, for example, the buyer with the right to terminate the contract under specific circumstances. These conditions must be agreed upon by both parties at the time of contract exchange.
- Failure to Meet Conditions: If the contract is subject to certain conditions, such as obtaining finance or a satisfactory building inspection, and the buyer is unable to meet these conditions, they may have grounds to terminate the contract.
- Breach of Contract by the Seller: If the seller breaches the terms of the contract, the buyer may have legal grounds to terminate the agreement. This could include issues such as the seller’s failure to complete agreed-upon repairs or address title defects.
- Rescission by Mutual Agreement: In some cases, both parties may agree to rescind the contract, allowing the buyer to pull out. This mutual agreement is typically documented, and any penalties or compensation agreed upon are outlined in this agreement.
TDP is here to safeguard your rights, navigate potential challenges and ensure a successful property transaction. Contact us today for personalised conveyancing tailored to your specific situation. Our team are experienced in both commercial and residential conveyancing services.