1. REPORT TO CLIENT
1.1. that the matter is completed! they will be happy to take the keys
1.1.1. details of the amounts received
1.1.2. s
1.2. send cheque to client for costs and disbursements from the proceeds of sale
1.3. enclose letter with tax invoice and furnish trust account statement. Appendix 14. 201.
1.4. vendor to cancel any home insurances
2. INSTRUCTIONS law stationers sell standard forms of instruction sheets for use in connection with sale or purchase of land
2.1. costs and disbursements
2.1.1. Professional responsibility and ethics note*
2.1.1.1. s12E Real Property Act 1900 - Registrar general can make rules for 1) verification of identity - Legal practitioners must take reasonable steps to verfiy identity of clients to whom certificates of title are given 2) verification of authority (right to deal) - legal practitioners to take reasonable steps to verify that any client is a legal person and has a right to enter into a conveyancing transaction 3) evidence and its retention - must retain evidence supporting dealing for at least 7 years 4) certifications - applies to witnessing and execution of paper dealings - must check that the witness is an eligible witness (at least 18 years, is not a party to the application and, has known the person to whose execution dealing or caveat is attesting more than 12 months or reasonably ensure the identity of the person
2.2. VENDOR"S INSTRUCTIONS
2.2.1. outgoing mortgagee
2.2.2. AGENCIES - agency needs to be in writing - governed by Property, Stock and Business Agents Act 2002
2.2.2.1. Open agency agreement
2.2.2.2. exclusive agency agreement
2.2.2.2.1. Agent may want to continue for a period after dates in an unsuccessful auction. Some vendors may want to appoint another
2.2.2.2.2. watch out for double commission which could be payable depending on the terms
2.2.2.3. auction agency agreement
2.2.2.3.1. needs extensive advertising over 4 week period
2.2.2.3.2. check reserve price - make sure it is fixed
2.2.2.3.3. prepare contract well before auction date and include the special conditions
2.2.2.3.4. advise client of amounts liable in auction agency agreement including commission, advertising, costs and disbursements
2.2.2.3.5. agent can advertise, but cannot make offers until contract is made
2.2.2.4. sole agency agreement
2.3. PURCHASER'S INSTRUCTIONS they may seek advice if there is an intention to buy a property
2.3.1. main concerns of purchaser
2.3.1.1. sources of finance warnings on page 3 and 4 of standard contract about finance
2.3.1.1.1. solicitor may not give financial advice, but inform of lenders
2.3.1.1.2. make purchaser aware of provisions in cl 9 of 2016 standard contract (interest rates, costs of a mortgage like the lender's solicitor)
2.3.1.2. effects of vendor disclosure and anti-gazumping legislation
2.3.1.2.1. cooling off period - commences when the contract is made
2.3.1.3. if purchaser has plans to further develop and improve use of property in accordance with environmental planning schemes
2.3.1.4. overall costs and expenses in addition to purchase price
2.3.1.5. what inspections should be made and when
2.3.1.5.1. whether survey or building certificate is required AND whether special condition should be sought
3. CONTRACT
3.1. Drafting the contract for sale
3.1.1. done by vendor
3.1.1.1. before property is advertised and buyer found if residential
3.1.1.2. if non-residential and auction - before buyer found
3.1.1.3. if non-residential and not auction - after buyer is found
3.1.2. must be done carefully because
3.1.2.1. terms will be binding upon exchange
3.1.2.2. propsective purchasers will consider terms and whether to proceed
3.1.2.3. they must be clearly understood by all the parties
3.1.3. s66Q check cooling off/anti gazumping legislation
3.1.3.1. 5 days statutory right to rescind
3.1.3.2. vendors may ask for a s66W certificate to waive the right of the cooling off period, so that
3.1.4. Legislation which cannot be excluded
3.1.4.1. real property act
3.1.4.1.1. prevents legal interest being created without a formal instrucment
3.1.4.2. corporations act
3.1.4.2.1. regulates the way a company can sign a contract
3.1.4.3. states give court or tribunal to vary a contract
3.1.4.3.1. compentition and consumer act
3.1.4.3.2. contracts review act
3.1.4.3.3. credit act
3.1.4.3.4. fair trading act
3.1.4.3.5. bankruptcy act
3.1.5. claims by purchaser before completion - clause 7
3.1.5.1. monetary compensation
3.1.5.1.1. physical errors and misdescriptions of the land
3.1.5.1.2. reduction in price where property has been damaged between contract and completion
3.1.5.1.3. claim for damages for misleading and deceptive conduct
3.1.5.1.4. delay
3.1.6. vendor's right to rescind - clause 8
3.1.6.1. when purchaser makes a requisition which places an unexpected or unreasonable burdon on the vendor - also provides purchaser an express right of termination where vendor does not comply with contract
3.1.7. purchaser's default - clause 9
3.1.7.1. vendor has right to terminate contract for failure to comply with an essential term
3.1.7.1.1. must write written notice and served on the purchase in accordance to cl 20.6
3.1.8. restrictions on the righits of the purchaser - clause 10
3.1.8.1. not as many rights to rescind compared to common law
3.1.9. compliance with work orders - clause 11
3.1.9.1. any work order made on or before the date of the contract is the responsibility of the vendor. If the work order is made after exchange (even before completion) it is responsibility of purchaser.
3.1.10. GST- Clause 13
3.1.10.1. pay attention to teh income tax assessment act and GST (for land and input tax). input tax means it doesn't include gst if it is a 'residential home'
3.1.11. adjustments - Clause 14
3.1.11.1. income and outgoings for the property are proportioned between the vendor and purchaser according to periods that they will respectively own the property
3.1.11.1.1. water usage
3.1.11.1.2. land tax
3.1.11.1.3. arrears of rent due by continuing tenant
3.1.11.1.4. statutory concessions
3.1.12. completions - clause 16
3.1.12.1. legal title to the property to pass to the purchaser subject to registration
3.1.12.1.1. legal title is protected under s43A Real Property Act 1900
3.1.13. possession before completion - clause 18
3.1.13.1. if the purchaser fails to settle, there is little chance of the vendor being able to recover damages for any breach of cl 18.2 or 18.3 (eg. failure to keep the property in good repair)
3.1.13.2. if possession is given to purchaser prior to completion, a fee or rent must be agreed in writing - cl 18.7
3.1.13.3. purchaser is to maintain full insurance on property until completion cl 18.4
3.1.14. continuing rights
3.1.14.1. cl 11
3.1.14.2. cl 13
3.1.14.3. cl 14
3.1.14.4. cl 17
3.2. DRAFTING SPECIAL CONDITIONS
3.2.1. general principles
3.2.1.1. necessary where agreement between parties includes matters not covered in the Standard Contract for Sale and Purchase of Land
3.2.1.2. special condition usually prevail over standard condition
3.2.1.3. purpose of special conditions is to protect the vendor without imposing onerous obligations on your client
3.2.1.4. special condition numbering should continue consecutively from the numbering of clauses in the standard contract. (start with no 32)
3.2.1.5. if a special condition is to make the contract conditional on some event, it is important to include what will happen if it does not occur
3.2.1.6. start with; - the vendor discloses that + - the purchaser acknowledges that + - the purchaser warrants that they would have entered the contract despite the fact that..
3.2.2. MODEL
3.2.2.1. 1. consider specific client instructions, legislation and standard contract terms and purpose of contract
3.2.2.2. 2. determine what matters are not dealt with or inadequately dealt with
3.2.2.3. 3. split identified areas into individual topics so that each special condition deals with one matter and consider whether definitions would aid the condition
3.2.2.4. 4. draft each special condition considering; purpose, rights and obligations, what consititutes sufficient disclosure, what would make the contract conditional or deal with particular facts
3.2.2.5. 5. ensure that any necessary time limits are considered
3.2.2.6. 5. ensure that mechanics are considered
3.2.2.7. 7. reconsider draft as to heading and layout
3.2.3. particular special conditions which may be needed for certainty
3.2.3.1. agreement as to what constitutes a reasonable time for notice period
3.2.3.2. and agreed rate of interest as a genuine pre estimate of liquidated damages
3.2.3.3. amendedment to printed conditions that are not commonly enforced
3.2.3.4. procedures if one of the parties loses mental capacity
3.2.3.5. release of deposit
3.2.3.6. payment of deposite if some unusual arrangement other than 10% has been agreed
3.2.3.7. guarantee for corporate purchaser
3.2.3.8. other special conditions considering the facts
3.3. submission of draft contract gets sent to the purchaser
3.3.1. vendor's solicitor to sign as power of attorney
3.3.2. insurance
3.3.2.1. s 66K of the conveyancing act - risk in respect of damage does not pass until completion or time stipulated in the contract
4. REPLIES TO REQUISITIONS (clause 5 of the 2016 contract for the sale of land edition) - requires vendor to do something with title / fix it - requirement to do conveyance in a certain way or object to it - requirements to any implied warranties or contract specifications - can ask general questions or any claims must be served in a reasonable time.. or 21 days if served by the vendor - a standard for exists
4.1. Duties of vendor's solicitor
4.1.1. to pay care and attention
4.1.2. go through requisitions in detail
4.1.3. discuss them with vendor
4.1.4. have vendor read over and sign
4.1.5. retain signed replies for protection
4.1.6. prepare formal replies and sign them
4.2. replying to requisitions
4.2.1. vendor has to be honest but not reckless.. "as far as the vendor is aware"
4.2.1.1. vendor is not bound to make enquiries or to establish any accuracies
4.2.1.1.1. Vendor
4.2.2. "yes" or "no"
4.2.3. "the vendor does not know"
4.2.4. "this not a proper requisition"
4.2.5. if there are disclosures made for the first time in requisitions - consequences may depend on the nature of them
4.2.6. *note: do not use "the purchaser should rely on their own enquiries" - it doesn't actually disclose what the vendor knows.
4.2.7. pay attention to blockages to requisitions, you may not need to answer all questions (Cl 5, 7, 8, 10 and 20.
4.3. vendor may rescind if unable to comply with requisition + it is not waived by the purchaser
4.4. Liability for incorrect answers by vendor
4.4.1. fraud
4.4.1.1. if vendor knew it was wrong/did not care if it was wrong
4.4.1.1.1. damages if they had induced the purchaser
4.4.2. must ask: if vendor knew he was under a duty of care when answering purchaser's questions
5. PREPARING FOR SETTLEMENT *note: completion and settlement is same thing
5.1. ADJUSTMENTS via ADJUSTMENT SHEET done by purchaser's solicitor
5.1.1. vendor is to obtain rents, profits and bears rates and outgoings up to and including the adjustment rate
5.2. Vendor must register for discharge or mortgage
6. PROPERTY TRANSACTIONS
6.1. BACKGROUND INFORMATION
6.1.1. Fee Simple
6.1.1.1. absolute ownership of land
6.1.2. Life Estate
6.1.3. Leasehold Estates
6.1.4. Old System Title
6.1.5. Torrens TItle
6.1.5.1. Legal title owned only by registration
6.1.5.2. Forms registered at LPI
6.1.5.3. many if not most of Old title and crown have been converted
6.1.6. Strata Title
6.1.6.1. permit ownership of parts of a building
6.1.6.2. starts with Torrens title land,and then strata subdivision is registered
6.1.6.3. land and building together is called 'common property'
6.1.7. Crown Land
6.1.8. native title
7. EXCHANGE OF CONTRACTS writing requirements complied with s 52A of the Conveyancing act exchange = bringing contract into existence
7.1. Methods of exchange
7.1.1. Face to face
7.1.2. SAI GLOBAL in city
7.1.3. Post
7.1.4. DX
7.2. Procedures on Exchange
7.2.1. Must get cheque from purchaser
7.2.2. Check if there is an outgoing mortgagee
7.2.2.1. contract mortgagee and tell them mortgagor intends to discharge
7.2.2.2. ask mortgagee to prepare discharge
7.3. Procedure after exhange
7.3.1. advise client that contracts have been exchanged
7.3.1.1. confirm in writing
7.3.2. forward cheque to agent or deposit holder, and then instruct them to sent to purchaser accordingly
8. VENDOR DISCLOSURE LEGISLATION s 52 A Conveyancing (Sale of Land) Reg 2010. why disclose? --> to disclose matters which may affect title or quality of land
8.1. REQUIRED DOCUMENTS s 52A(2)(a) Attach documents prescribed by regulation
8.1.1. s 149(2) Certificate under environmental planning and assessment act
8.1.1.1. law only requires s149(2) but best practice is to include, s 149(2) and 149(5).
8.1.2. diagram indicating location of sewer
8.1.2.1. law only requires sewer diagram, but best practice to also include sewer reference
8.1.3. property certificate and DP Plan
8.1.4. s 88B copy of any instrument to create an easement, profit a prende, restriction or positive covenant burdening the land issued by the LPI
8.1.5. if there is a swimming pool, a valid certificate of compliance and occupation certificate
8.1.5.1. warnings pg 3 of contract
8.1.5.2. pool barrier requirements
8.1.5.3. certification
8.1.6. Land tax certificate (to be supplied since 1 July 2016)
8.1.7. ENQUIRE INTO
8.1.7.1. survey reports (may be necessary)
8.1.7.2. building certificates (may be necessary)
8.1.7.3. are there any work orders?
8.1.7.4. enquire with Land and Environment court for any tree disputes
8.1.7.5. is there any adverse affectation. eg. trees?
8.1.7.6. contravention to upgrading or demolition orders?
8.1.7.7. level of noise around an airport
8.1.7.8. pest inspection
8.1.7.9. inspection by builder, architect, electrician and plumber
8.1.7.10. zoning and enquiries including development of surrounding areas
8.1.7.11. valuation
8.1.7.12. sewerage and drainage
8.1.8. remedy for breach
8.1.8.1. Clause 16(1)(a) - Purchaser can rescind within 14 days of exchange unless completion has occurre
8.2. IMPLIED TERMS AND WARRANTIES s 52A(2)(b) Vendor taken to have included terms, conditions and warranties prescribed by regulation
8.2.1. IMPLIED TERMS
8.2.1.1. If there are encroachment structures, then purchaser can make an objection, requisition or claim
8.2.1.1.1. UNLESS: disclosed, clearly described and expressly precluding the purchaser from making an objection, requisition or claim
8.2.1.2. remedy for breach:
8.2.1.2.1. purchaser free to make any objection, requisition or claim the purchaser is entitled to make
8.2.2. IMPLIED WARRANTIES
8.2.2.1. land not subject to adverse affectation
8.2.2.1.1. essentially proposals of statutory authorities listed
8.2.2.1.2. notices or claims in respect of boundaries, boundary fences, encroachment by or upon land
8.2.2.1.3. access orders under Access Tto Neibouring Land Act 2000
8.2.2.1.4. demolition or rectification order under s 124 Local Government Act 1993
8.2.2.1.5. notice to re failure to comply with positive covenant
8.2.2.1.6. licence under Water Act 1912
8.2.2.1.7. notice under Stock disease Act
8.2.2.1.8. application for an order under the Trees disputes between neighbours act.
8.2.2.2. and does not contain any part of a sewer belonging to recognised sewerage authority
8.2.2.3. s 149 Certificate attached specifies true status re items set out in Sch 4 of EPA Regulation 2000
8.2.2.4. nothing regading any building/structure included in sale justifying making of upgrading or demolition order by Council
8.2.2.4.1. orders under EPA Act
8.2.2.4.2. orders under Local Government act
8.2.2.4.3. order to demolish structure erected without prior development consent or construction certificates
8.2.2.4.4. order to bring compliance where unlawfully erected
8.2.2.4.5. order to repair/remove building in public place
8.2.2.4.6. order to remove, demolish or repair in catchment district where likely to pollute water supply.
8.2.2.5. if the land is or purports to be burdened by a positive covenant, no amount is payable under s 88F of the Conveyancing Act
8.2.2.6. the land is not subject to an annual charge for the provision of coastal protection services under the Local Government Act 1993
8.2.2.7. remedy for breach
8.2.2.7.1. Purchaser can rescind up to completion provided: (a) breach constitutes failure to disclose existence of matter (b) purchaser unaware of matter when contract entered (c) purchaser would not have entered contract if knew about it
9. SIGNING OF TRANSFER
9.1. Purchaser's solicitor prepares and submits the transfer
9.2. Vendor solicitor to check
9.2.1. 1. whether transfer is stamped
9.2.2. 2. to make sure it isn't dated until settlement
9.2.2.1. the eNOS (electronic notice of sale) identification code is to be inserted at the bottom
9.2.3. 3. particulars in the transfer
9.2.4. 4. if there are two or more tenants, it must state whether they are joint / tenants in common (Real Property Regulation 2014 reg 6)
9.3. Vendor then arranges SIGNING with LPI requirements
9.3.1. check font size, initial if there are any alterations, and dated alterations
9.3.2. must be signed personally by vendor, or vendor's power of attorney + witnessed.
9.3.2.1. witness must know signatory more than 12 months OR
9.3.2.2. must take reasonable steps to confirm their identity (check license)
10. SETTLEMENT ITEMS PREPARING THE SETTLEMENT AGENDA /checklist (appendix 12 13)
10.1. documents of title if no existing mortgage
10.2. keys
10.3. payments on settlement (note has to be bank cheques only)
10.4. all payments due to the vendor
10.4.1. direction as to payment all in writing as the vendor solicitor directs
10.4.1.1. eg. payment to outgoing mortgagee to discharge mortgage
10.4.1.2. vendor's solicitor for costs and disbursements
11. SETTLEMENT vendor's objective: to make sure vendor can give good title, recieve all the money due to the vendor and be relieved of all outgoings Purchaser's objective: to make sure that the purchaser gets good title, pay no more than is required and gets possession with all inclusions and services
11.1. Place of settlement
11.1.1. mortgagee's office (if there is a mortgagee)
11.1.1.1. solicitor's on both sides will need to meet here, with the morrtgagee's solicitor because they need to discharge the mortgage
11.1.2. at office of vendor
11.1.3. at sai global in city
11.2. attendance
11.2.1. failure to attend = failure of settlement
11.2.2. law clerks can attend but they need to be briefed heavily
11.2.3. deal with documents first then moeny
11.2.4. check that all bank cheques are avialable
11.2.5. not a place to give or take undertakings
11.3. DOCUMENTS IF THERE IS NO MORTGAGE
11.3.1. Certificate of Title *must make sure we can give good title*
11.3.2. duly signed transfer
11.3.3. keys
11.3.4. to recieve payment from purchaser
11.3.5. direction as to payment
11.3.5.1. payments to outgoing mortgagee for discharge
11.3.5.2. payments to vendor's solictor for costs and disbursements
11.3.6. any survey report or building certificate to be handed over
11.4. DOCUMENTS IF THERE IS A MORTGAGE
11.4.1. SAME AS ABOVE BUT DOCUMENTS WILL BE GIVEN TO THE MORTGAGEE'S SOLICITOR INSTEAD*
11.4.2. vendor's solicitor will sign a receipt of these documents and hand them to the mortgagee's solicitor
11.4.3. vendor's solicitor will make sure that there is a complete discharge from the mortgage the release vendor from liability
11.4.4. purchaser's solicitor should site the original mortgage document
12. AFTER SETTLEMENT
12.1. ORDER ON AGENT
12.1.1. Order recieved from purchaser's solicitor should be forwarded to the agent/deposit holder, so that deposit can be made
12.1.1.1. amount received is reduced by agent's commission
12.2. INSURANCE POLICY
12.2.1. discharge step: discharge the building insurance or send re-assignment agreement back to the insurer
12.3. NOTICE OF SALE
12.3.1. Submit eNOS or hard copy to effect change on the torrens title property
12.3.1.1. LPI will scan the notice and send to government authorities so that the purchaser can be the liable rate payer
12.3.1.1.1. council authoriites
12.3.1.1.2. water
12.3.1.1.3. tree
13. ADVISING ON SALE
13.1. Solicitors must be aware of obligations imposed on vendors to disclose information about the property + consequences if not met
13.1.1. property sold must be fully described
13.1.2. contract itself cannot exclude operation of legislation which will affect rights of parties
13.1.2.1. Competition and Consumer Act
13.1.2.2. Bankruptcy Act
13.1.2.3. Fair Trading Act
13.1.2.4. Contracts Review Act
13.2. Vendor Disclosure Legislation
13.2.1. Contained in s52A of the Conveyancing Act & Conveyancing Regulation
13.2.2. check the flow chart