We strongly suggest speaking to us prior to signing a sale contract so we can check the document prior to signing.
Points to be aware of Prior to signing
- Section 7 Statement (aka Form 1)
- Special Conditions
- Cooling off rights
- Insurance – Property
- Insurance – Title Insurance
- Building & Pest Inspections
- Costs Involved
Section 7 Statement (aka Form 1): The Section 7 Statement (aka Form 1) is a formal statement by the vendor about certain details relating to the property under the Land and Business (Sale and Conveyancing) Act 1994. This statement must be complete and accurate when served on the purchaser. A cooling off right is usually linked to the time of service (see below) Consulting a Conveyancer about the contents of the statement will ensure that you are aware of various details affecting the property. Ensure that you are aware of the details and understand all terms and conditions applicable.
Special Conditions: Your chosen Conveyancer will offer independent advice on special conditions that should be included in the Contract for your protection (eg conditions that mean that you don’t need to proceed if you don’t get approval for a loan or don’t sell your existing property). If you consult him/her before you sign the Contract or lose any cooling off rights, you can be guided through this process and informed about what you can expect.
Cooling off rights: Most purchasers have a statutory right to terminate a Contract (‘cool off’). A purchaser exercising that right must give written notice of the ‘Cooling off’ to the vendor within two clear business days after the later of both:
- receiving a complete and accurate Form 1
- entering into the Contract.
Importantly, not all buyers of property have the right to cool off. The right does not exist if:
- you have waived your right by getting independent legal advice and have a certificate from the legal practitioner to that effect
- you bid at auction and were successful or purchased later that day
- a company is the purchaser
- in certain circumstances where the sale involves a tender or option to purchase
- the purchaser is buying a business plus the property
You should be careful about waiving your rights to cool off if you have not received all information that would be included in the Form 1.
If the property is being auctioned, the Form 1 must be available for inspection at the agent’s office at least three business days prior to the auction and at the place of auction at least 30 minutes before the auction commences.
You are bound by the Contract from the time that your offer is accepted. Unless you legally cool off, you are obliged to try to fulfil the special conditions and ultimately finalise the settlement. There are various financial consequences for you (including default interest and even loss of deposit and payment of the difference in price on resale) if you fail to comply with the terms of the Contract.
Insurance – Property: In most respects, the property is at your risk from the making of the contract – hence you should insure the property as soon as possible after your offer has been accepted. Your lender will require a copy of the insurer’s Certificate of Currency with its interest noted before providing funds to settle.
Insurance – Title Insurance: For a single premium, Title insurance protects against claims for various unknown and (disclosed) known risks that threaten ownership and use (including structures) of the property until its resale.
Building & Pest inspections: Building, pest or other inspections should ALWAYS be undertaken and completed as soon as possible. It is preferable to do so before or during any cooling off period; if it may not happen within that time, you should make the Contract subject to a satisfactory inspection report.
Costs involved: Fees and disbursements vary depending on the nature of your purchase and if any special matters need to be attended to. Please contact our office to obtain a quote for your specific transaction.
Some general fees include:
- Stamp duty
- Registration on Transfer
- Government search fees – The SA Government Property Interest Report (PIR) and Local Council search are required for each property purchased. These fees are reviewed by the government each July. Ask your conveyancer what these fees are.
- If you are purchasing a Strata or Community Title there are additional search costs involved. The fee varies between strata/community managers.
- Conveyancers fees will vary due to knowledge, experience, services provided and the complexity of the transaction.
Conveyancing clients tend to get what they pay for – although there is a minimum level of service that must be provided to satisfy the conveyancer’s legal obligations. Some conveyancers quote a fee for all services whilst others quote for individual services. When seeking a quote for fees, please ask what services are provided for the fee and what other services are provided.
It is necessary for our office to pass on the disbursements associated with the transaction such as stamp duty, LTO lodgement fees, search fees, SA Water meter readings, bank cheque fees, extra searches as required, couriers, phone calls, postage and file storage and destruction. Please contact us directly to obtain a quote on the fees and charges involved.
Occasionally a transaction involves more work than usual. Unless otherwise indicated, quotes are given against the usual tasks included in a transaction. Additional time may also be required to give advice in relation to documentation or rights or to liaise with your lender. A transaction may also involve extra tasks (eg liaising with a GST expert or dealing with an encumbrance or contractual breach). In such cases, your Conveyancer is entitled to charge an additional fee for that work unless it was allowed for in any fee estimate.
We will provide you with a settlement statement prior to your settlement date listing all fees, rate adjustments, incoming moneys and deposits paid so you know exactly how much is payable on the settlement day.