Ten things all purchasers should know

1. Once the Contract has been fully signed, it can not be amended without agreement

You will either purchase from the seller directly or deal through a real estate agent who represents the vendor or seller. In either case once the price has been agreed you will need to sign a written contract. If you buy privately the seller’s lawyerwill usually prepare the contract, otherwise it will usually be prepared by the real estate agent.

All agreements for the sale of real estate (vacant land or developed land) must be in writing and signed by all parties. Verbal agreements are not enforceable. It is important that the contract contains all terms, important assurances given in negotiations and any preconditions to you being able to proceed. We strongly recommend that you forward the contract to us before you sign to enable us to discuss the terms with you.

There are no automatic cooling off periods or automatic rights to withdraw in Tasmanian contracts unless there is some specific provision in the contract.

Buyer Beware!

Properties are usually sold on an ‘as is where is’ basis in Tasmania.

Condition of the Property: Unless there is a special provision in your contract, there is no obligation on the seller under the contract to deliver up the property in any particular condition other than that at the time of your pre-contract inspection. For example, if the washing machine did not work when you inspected the property you have no right to have it fixed by the seller. You can request that a special provision in relation to the condition of the property and/or chattels be inserted in the contract. Please contact us prior to signing a contract so we can arrange this on your behalf.

The seller and agent do not have a duty to disclose any issues or defects affecting properties in Tasmania: It is up to you to make all necessary enquiries prior to signing a contract. You should make enquiries with the seller, agent or local Council to ensure all buildings, improvements and plumbing on the property have necessary Council approvals. We strongly recommend that you request that a council compliance clause be inserted in the contract if you have any concerns. Without a council compliance clause in the contract, the seller can refuse to rectify any defects. Please contact us for further information.

Refer to 'Council Matters' below.

2. There is no requirement to pay a certain deposit amount or percentage in Tasmania

When a contract has been signed you will usually be required to pay a deposit. This will be paid to the agent or to the seller’s lawyer. It is an essential term that the deposit is paid in accordance with the terms of the contract. A failure to pay the deposit will enable the seller to terminate the contract without any notice to you.

If the contract is subject to you fulfilling certain conditions and you do not do so then the full deposit will be refunded to you.

3. You need to include all preconditions to you being able to complete the purchase

Once the contract is signed by all parties you need to take steps to fulfil any conditions. These are commonly finance approval, building inspection or the sale of your own property. You will have a limited time to fulfil the conditions. If you fail to fulfil any conditions within the time specified in the contract then the contract may be terminated or the seller may agree to extend the time allowed to fulfil any outstanding conditions.

4. Property searches will generally only be ordered once the contract is unconditional

When you have fulfilled the conditions we will obtain title, Council and Statutory Authority searches. These give us information concerning the property and the seller. We will forward this information to you and advise you if any of these searches disclose any issues.

5. PEXA is not an option in Tasmania yet

‘PEXA’ stands for Property Exchange Australia and is an Electronic Lodgment Network. Whilst most other States now use PEXA for settlements, Tasmania is still a couple of years away. We still do paper settlements in Tasmania. This is important to keep in mind if you are buying and selling in different States.

6. You do not need to attend settlement

We will arrange settlement or completion of your purchase with your bank and the seller. On settlement we will pay to the sellers lawyer the balance of the purchase price and receive the title deed to the property being purchased together with a transfer signed by the seller and the release of any mortgage or other encumbrance affecting the property.

7. The Title will only register in your name several weeks after settlement

Following settlement the title documents received on settlement will be submitted to the State Revenue Office for payment of stamp duty and then to the Land Titles Office for registration of the transfer to you. This process usually takes 4 to 6 weeks. Upon registration of the transfer the certificate of title will be returned to us or to your bank if you have a mortgage over the property.

8. The Council certificate that we can order may not disclose all issues with the property

It is standard practice in Tasmania to obtain a municipal right and powers certificate (337 certificate) from the local Council after the contract is unconditional to ensure that there are no issues affecting the property.

The 337 certificate is not attached to Tasmanian contracts as is the case in most mainland states. Let us know if you would like to obtain the 337 certificate before signing a contract or make your contract subject to a clause that you are satisfied with the 337 certificate.

The 337 certificate has some information in relation to things such as nuisances, council notices that have been served in respect of the property, sewerage, water supply, planning scheme and zone, current planning permits, building completion certificates, landslips, demolition orders, and indemnity policies under the Housing Indemnity Act 1992. It may not disclose work done by the vendor which does not have a building or occupation certificate from council as council can only advise in relation to matters that it has been made aware of. You may be able to work out what work has approval if you go to council to view their records relating to the property.

Please note that if the ‘without qualification’ box is ticked in the Vendor Warranty Clause of the Contract, this means that the Property is sold “As Is/ Where Is” and, the Vendor made no legally binding warranty, description, or representation of any kind as to i) the physical nature of the Property; or ii) the Property having any permits or certificates of completion or occupancy.

It is therefore very important to make enquiries with the seller, agent and Council prior to signing a contract if you have any concerns.

If you have already signed the contract and think there may be issues with the property please speak to us before contacting the council. If the contract is already exchanged the seller may not have given a relevant promise to remedy discrepancies found. The council’s inspection may reveal discrepancies not the seller's responsibility. You may lead the council to discover discrepancies that you end up having to remedy at your own expense.

9. You will need to pay a proportion of land tax if the Vendor is liable for land tax - regardless of your proposed use

People who are purchasing a property to be their principal residence are often surprised when required to pay a proportion of land tax. If the property you are purchasing is subject to the payment of State Land Tax in the current ownership and has a land tax liability at 1 July last, you will be asked to contribute a proportion from settlement date to 30 June next. However, as the property will be your principal residence, the State Revenue Office may review the classification and amend same to ‘Residential’ thus exempting you from the payment of land tax but this will not take place until 1 July next when they next review classifications. You will not be reimbursed for the proportion of land tax paid the Vendor on settlement.

We can order a land tax search on your behalf at any stage. The cost is $12.15 and the search result is instant.

10. Permanent visa holders and New Zealand citizens with a special category visa will need to provide evidence of their visa, otherwise the foreign investor duty surcharge will be payable

If you are a foreign person, company or trust, a foreign investor stamp duty surcharge may be payable by you on settlement. Please click here for further information.

Please note that most trusts are presumed to be foreign unless proved otherwise. An amendment of the trust deed to exclude the distribution of the capital of the estate to a foreign person is usually required to rebut this presumption.

All material on this site is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this material as legal advice. If there are any issues you would like us to advise you on arising from this material, please get in touch.

Contact us for advice in relation to your specific matter and circumstances...