True or False? Property Edition

Buying or selling property can involve complex contracts, strict timeframes and legal obligations that are not always obvious.

So, how much do you really know about property transactions? We’re putting some common property myths to the test. True or false?

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I have signed a contract to purchase a property, I always have cooling off rights.

False – Only some contracts for the purchase of land grant cooling off rights to a purchaser. For example, properties purchased at auction, or within 3 clear business days before and after a publicly advertised auction, or by a company or corporate body, are some examples of where cooling off rights do not apply.

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I purchased a contract at auction on a Saturday, and the selling agent told me I have to pay the full deposit on the day.

False – Whilst selling agents now have various methods to assist you to pay the deposit on the day, most standard contracts provide that any obligation that falls due on a weekend or public holiday automatically moves to the next business day.

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I purchased a property subject to finance approval. If my loan isn’t approved by the due date, the Contract will end.

False – Under most standard finance conditions, the right to terminate belongs to the Purchaser, not the Vendor. The Contract will only end if the Purchaser elects to terminate it in accordance with the finance condition. The Purchaser must satisfy the requirements of the finance condition and will usually have two business days after the finance approval date to terminate the Contract in writing.

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I purchased a property subject to a building and pest inspection. My inspector has to have certain qualifications for my report to be valid.

True – Whilst there are different forms of Contract in circulation at present, you must carefully check the conditions and the qualifications of your inspector, to ensure the if the report identifies a major defect or a major pest infestation, affecting the structure of a building, it is valid and of a sufficient standard to give you the right to terminate the Contract without penalty.

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I am selling my home and I have done some DIY renovations. Someone told me I might need a special report on the works in my Vendor Statement.

True – If you have carried out building work to your property yourself, you may be required to obtain a defects inspection report before selling the property. The rules can apply even where a building permit was not obtained or was not required. Failing to comply can have serious consequences, including giving a purchaser rights to avoid the Contract.

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I loaned money to my child to purchase property though we don’t have a written agreement, but at least I can lodge a caveat over their property to protect my interest.

False – Caveats can only be registered against property in certain circumstances. Care needs to be taken to determine whether you have a sufficient interest, before you register a caveat. If you intend to register a caveat, it is important to document the arrangement properly and obtain advice as to whether the agreement creates a caveatable interest before lodging a caveat.

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Whether you are buying or selling property, it is important to understand your rights and obligations before signing a Contract of Sale or taking steps to protect your interest in a property.

If you have questions about a property transaction, your Contract of Sale, Vendor Statement or a caveat, contact our office on 03 5623 5166 to book an appointment with our experienced Property Law Team for advice tailored to your circumstances.