Key differences buying property in different states across australia
Australia might be one country, however there are substantial differences when it comes to law around property transactions across the States.
The common similarity across all states is DUE DILIGENCE.
WHO PREPARES THE CONTRACT FOR SALE?
In QLD, SA and WA Contracts are prepared by Real Estate Agents.
IN NSW, Contracts are prepared by the Seller’s Solicitor and there are a number of prescribed documents which must be in the Contract. A NSW Contract is generally long and complex.
In VIC, a Contract and the disclosure documents must be prepared by the Seller’s Solicitor.
SELLER/VENDOR DISCLOSURE REQUIREMENTS
In NSW and VIC, a seller must provide a comprehensive disclosure document to a potential buyer, whereas in QLD, SA and WA, a contract is very limited to ‘standard terms’ and as such ‘Buyer Beware’.
TIME IS OF THE ESSENCE (OR NOT)
The most notable difference is that in QLD, ‘time is of the essence’, this means that the settlement date prescribed in the Contract is an essential condition, and if you fail to settle on an agreed date, the Seller can terminate, keep the deposit and sue for damages and specific performance.
The difference in NSW and VIC is that Contracts are not time is of the essence, as the standard conditions have a 14 day notice to complete provision that provides that if either party does not settle on the due date, the other party must first serve a Notice to Complete giving them a further 14 days to settle. It is only at the end of the additional 14 day period, that the Contract becomes ‘time of the essence’ which gives the innocent party a right to terminate.
In WA, if settlement does not occur within 3 business days of the settlement date, then the purchaser is liable to penalty interest. If the delay is due to the vendor then the vendor must pay penalties. The vendor or purchaser cannot terminate until a Default Notice is issued with a minimum of 10 business days to remedy the default.
COOLING OFF PERIODS
In NSW, a stardard contract has a 5 day cooling off period. This is generally when the Purchaser pays a 0.25% deposit and if they terminate, they will loose that deposit.
This is very different in other states, as the initial deposit is not forfeited if the purchaser does not proceed.
Generally, in QLD, SA and WA, Contracts include ‘subject to’ conditions which allow purchasers specific periods of time to satisfy finance and building and pest. This allows them time to conduct due diligence, seek rectifications and even ask for a price reduction. This minimises risk for purchasers.
INSURANCE REQUIREMENTS
In NSW and VIC, the property is at the seller’s risk up until settlement date.
In QLD, the property is at the buyer’s risk from 5pm from the first business day after the Contract date. Thus it is essential for buyer’s to take out insurance as soon as they sign a contract, or seek to amend this clause of the contract.
Most importantly, it is essential that buyers and sellers understand the specific terms of the State they are buying or selling in.
Renee Roumanos Legal operates Australia wide, and would love to extend a hand and help buyers and sellers in this exciting time. Contact our office on (02) 9054 1311.
