The legal position with respect to buying and selling real estate in the ACT has undergone significant changes since
1 July 2004 when the ACT Government introduced new legislation requiring Contracts for Sale to contain various so-called ‘disclosure’ documents.
This new legislation has important practical implications for both Buyers and Sellers of real estate in the ACT.
In the case of a typical freestanding house, before a property may be sold or marketed for sale, a Seller must ensure that the following documents are obtained for inclusion in the Contract for Sale:
An Energy Efficiency Rating (EER).As a practical matter, these documents-
As the Civil Law (Sale of Residential Property) Act 2003 provides for the cost of the Building, Compliance and Pest Reports to be reimbursed to you on Settlement of the sale, it is important that a copy of the tax invoice is included in the Contract. You should retain a copy for your reference also.
In addition to the Building, Compliance and Pest Reports and the EER, Sellers must also ensure that the Contract for Sale contains the following documents:
These documents can be easily, and commonly are, obtained by your Solicitor through on-line searches.
Once all relevant documents have been provided, your Solicitor will prepare the draft Contract for Sale and make it available either to you personally or, more usually, direct to your Agent so that copies may be made available to prospective Buyers.
It is important to note that other Contract documents may be required, or may be unnecessary, depending on whether the property is, for example-
Your Solicitor will be able to advise you on the specific requirements that relate to your particular property.
From a Seller’s perspective, it is important that the following matters (among others) be discussed with your Agent at the time the property is marketed for sale:
Once the property has been sold, your Solicitor will contact you to arrange a suitable time for you to sign the Contract and to provide any instructions in addition to those contained in the Sales Report/Advice itself.
Once agreement has been reached with the Buyer on all aspects of the sale (such as price, Settlement date, goods, etc.), your Agent will prepare a Sales Report or Sales Advice which sets out all the terms of the sale. This is provided both to the Seller’s Solicitor and the Buyer’s Solicitor.
The Seller’s Solicitor uses the information in the Sales Report/Advice to prepare the final version of the Contract for Sale, so it is important that you liaise with your Agent to confirm all the details to be included.
Once signed, your Solicitor will contact the Buyer’s Solicitor to arrange a time to ‘exchange Contracts’.
At exchange, the Seller’s Solicitor and the Buyer’s Solicitor ensure that all details contained in the Seller’s and Buyer’s ‘counterparts’ of the Contract are identical. The counterparts are then dated and the Buyer’s Solicitor provides the Deposit (for example, by way of cheque or ‘Deposit Bond’ or ‘Bank Guarantee’). If the Deposit is provided by cheque, the cheque is forwarded to your Agent to be banked into the Agent’s Trust Account pending Settlement.
On exchange of Contracts, both the Buyer and the Seller are legally bound to complete the Contract in accordance with its terms and conditions.
In summary, the most important issues for Sellers to address between exchange of Contracts and Settlement are as follows:
Arrange with your Bank or other lender for the discharge of any Mortgage on the property. In this respect, it is essential that-