Buying property

Table Of Contents

Should the buyer beware?

Vendors in Tasmania should advise purchasers about title restrictions on use of the property. Otherwise, there is no compulsory system of comprehensive disclosure required of vendors on the sale of real estate as is the case in some other states. 

The purchaser is responsible to make their own enquiries.

The Tasmanian Law Society Standard Form Contract, as used for most sales, makes provision for a voluntary Vendor Disclosure Statement, a set of standard questions about the vendor’s knowledge of the property that purchasers may like to have vendors answer in writing. A purchaser may be able to claim damages that follow from the incorrect answers by the vendor about what the vendor knows or ought to have known.

Vendors are not legally bound to make the voluntary Vendor Disclosure Statement. Whether the vendor gives answers is a matter for negotiation between the parties. 

Should I search before or after I sign the contract?

Complete your searches as far as possible before the negotiations. The results of your searches may affect the price or other parts of the negotiation.

Some searches may need to be finalised after the contract is signed.

If critical searches are outstanding you may need to change the standard contract in place, so the vendor guarantees the result you want or to give you the right to withdraw if you do not get the result you want.

Can I use the property as I wish?

Before signing, check the property can be legally used as you intend, particularly if you intend a non-residential use. Most, but not all, properties can be used for residential dwelling.

Check permitted usage with the local Council. You may need a development application or planning permission.

Check there are no restrictions on the title that would prevent you from using the property as you intend.

The standard contract allows you to make your offer conditional on being able to use the property for a purpose you specify in the contract. Make sure your intended use is properly specified. Describing an intended use as “a rural block” for instance does not say clearly enough the use you intend. If there is a secondary but important use make sure that is entered as well; e.g. “home with child day care centre”.

Do I need to check the title?

It is risky to sign a contract to buy land without first checking the title documents. 

How do I get a copy of the title?

The estate agent should be able to get you a copy of the title.

Copies of the title, government valuation and last sale price information are available for Tasmanian properties via the internet at www.thelist.tas.gov.au.

You can also get maps, zoning details, land valuation information and a history of sales from this site.

Tierney Law can access this information for you or you can get access using your credit card. There is a government search fee to get a copy of the title.

What do I need to check on the title?

Usually, the title is a Government certificate as to who owns the land and what restrictions are recorded against the title. 

If the title is held under the modern Government certificate system, there will be a title plan of the land. Usually there will not be a plan of the building.  The title plan will only show the boundaries of the land itself.

What do I need to check with Council?

When inquiring about your property, ask:

  • if there is a new planning scheme on the way or planning applications in relation to the property;
  • if Council maintains the adjoining road;
  • Council about building records for the property. Ask Council if they can provide records of building and planning approvals. At many Councils, comprehensive records are only available for recent years;
  • Council generally if there are any other issues that may restrict the enjoyment of your purchase in the manner that you intend.

It is possible to obtain a detailed report from Council on its rights and powers in relation to the property. This search is usually undertaken after the contract to check the vendor has no unsatisfied orders. Council typically takes about a fortnight to prepare such a report. The report costs just under $300.00.

You can make your purchase offer subject to being satisfied with such a report. However, every condition makes your offer less certain and less attractive to the vendor.

What is the basis of property sales?

Unless a contract says to the contrary, land is sold on an “as is where is” basis. The purchaser takes the property as found. Inspect the property carefully before signing the contract.

The vendor does not automatically warrant that:

  • the property has all necessary planning approvals; or
  • buildings are built to any particular standard or according to the building regulations.

Do I need a building inspection clause?

Before paying for a building inspection report, you may want the security of knowing you can buy the property at an acceptable price.

Perhaps the vendor will agree to be bound subject to such a report.

The 2023 version of the Standard Form Contract for Sale of Real Estate in Tasmania contains a standard building inspection clause in the Particulars of Sale

Inspection ClauseIf this Contract is subject to a building inspection. All relevant details must be completed for the following clause to apply.

The Purchaser may have reasonable access to the Property during the Building Inspection Period to inspect buildings and other improvements on the Property personally or by agents, at the Purchaser’s cost. If, strictly within the Building Inspection Period, the Purchaser serves on the Vendor:

  • a copy of a report, by a building inspector holding professional indemnity cover for that work or a licensed Building Services Provider under the Occupational Licensing Act 2005 (Tas), both:
    • specifying one or more defects in buildings and other improvements on the Property; and
    • certifying that the defects are likely to cost more to remedy than the Defect Limit; and
  • notice that the Purchaser terminates this Contract in response to that report,

then the parties’ obligations under this Contract end and the Purchaser is entitled to a refund of the Deposit, but neither party is otherwise entitled to compensation.

  Building Inspection Period(Complete)             until the ……….. day of …………………………20….. or (Insert number of days) …….. days from …………………………………
Defect LimitEither…………………………………………… per cent of the Sale Price or                 $ ……………..

Often an adjustment to the original price may be preferable to requiring the vendor to remedy defects after the contract is signed. Vendors may not be motivated to do the work to a good standard. Price adjustments are simple, clear cut and not time sensitive. With a price adjustment, the purchaser is free to undertake the remedial works at a time, to a quality and in a way of the purchasers choosing.

Do I need a soil test?

Be sure the land is not subject to soil movement or landslip. Soil movement is a particular danger if the land is steep or has deep loam. 

Council and the state government keep a register of landslip-affected land. Not all landslip-affected land is on these registers. If landslip is an issue, a soil inspection would be wise.

Councils require an assessment of soil conditions as part of the building approval process. If you will need a building approval, discuss this with Council and obtain this inspection at the pre-contract stage. Difficulties with the soil conditions may or may not have contractual significance. Landslip issues are best resolved before the contract is signed. 

Are there hidden pipes and cables?

A register of the location of cables and equipment is available through a service called “Dial before you Dig” by phone on 1100 or on the web at www.dialbeforeyoudig.com.au

Check that register before planning or executing any project on the property that may affect cables and equipment.

Do I need Australian residency?

People without residency status in Australia may need special Government permission to buy land. Go to www.firb.gov.au or talk to Tierney Law if you do not have permanent Australian residency status. Extra taxes sometimes apply to non-residents.

Tierney Law also have available without charge a client guide booklet explaining the residency requirements in detail.

What is sold with the property?

The sale of land includes all buildings and fixtures to buildings that are part of the land.

Check the contract specifies any extra things to be included with the sale such as household goods.

It is best to specify in the contract things like stoves and TV antennae that are only arguably fixtures. Things like electric fencing, water pumps and tanks are often the source of confusion. If such things are included in the sale, they are usually best specified in the contract.

Check the condition of these extras before you sign. There is no automatic warranty that such things are in working order or of a particular condition.

How is the contract made?

The Tasmanian Law Society standard form contract, as used for most sales, is made up of two parts:

  • agreed variables and non-standard clauses, known as “the Particulars of Sale (2023)”; and
  • the standard clauses known as “the Standard Conditions of Sale (2023)”.

The text of the Standard Conditions of Sale is fixed and incorporated in the Contract by adoption on signature of the Particulars of Sale, subject to any variation by the Particulars of Sale.

The Law Society approval is noted on the front page of both the Particulars of Sale and the Standard Conditions of Sale. Non-standard forms of contract are sometimes used, particularly in off the plan developer sales. There may be additions or changes to the standard form. If the proposed contract is not a standard contract, you should take legal advice, talk to Tierney Law.

If there is a real estate agent, the real estate agent usually prepares the contract and has it signed by the purchaser. The agent then presents this offer to the vendor. At this point the vendor either accepts or rejects the offer. If the offer is rejected, there may be further negotiation. The vendor may sign an amended contract as a counter offer to put to the purchaser or ask for a new offer from the purchaser. When the vendor is content with the offer, the vendor signs the contract to accept the offer and makes it binding to both parties.

What is the effect of the contract?

Once a contract is made the parties are bound to act according to its terms.

The contract should include all substantial matters agreed, for example, any outstanding work the seller agrees to complete. The contract should specify any important assurances given in negotiations and any preconditions, such as approval of a home loan for instance.

The contract is the last opportunity for negotiation before being bound. 

The Tasmanian Law Society standard form contract provides for an optional cooling off period, but most offer are made without the optional cooling off period.

What do I check in the contract?

Make sure you read and understand all the terms, conditions and ‘fine print’ before you sign a contract. 

Raise with the agent anything you do not understand. If that does not resolve your query, get legal advice, talk to Tierney Law.

Consider your particular needs. 

When do I pay up / takeover?

The completion date is the changeover date to complete the transfer of ownership. Completion is sometimes called settlement.

Negotiate a completion date that will suit you. 30 days is the typical period from an unconditional contract to completion.

The Particulars of Sale specify a completion date.

Completion Date (See Standard Condition 3)

EitherThe ……….. day of ………………………………..20…………………
or Another date (specify):………………………………………………

What deposit do I need?

The deposit is a bond of the purchaser’s obligation.

There is no legal requirement for any particular deposit amount or for any deposit at all. How much does the vendor want or need to feel safe enough? How much does the purchaser have available?

A deposit of 10 per cent of the purchase price is typical but the amount is subject to variation and negotiation.

Does the purchaser lose the deposit?

If the purchaser wrongfully breaks the deal and if the breach is bad enough, the vendor may be able to call off the contract and then the purchaser automatically loses the deposit.

If the contract fails because some agreed pre-condition to the contract does not happen, the purchaser will be able to get the deposit back. 

Can I buy subject to finance?

A purchaser relying on getting finance can contract subject to getting a loan approval using the Finance Clause in the standard Contract.

Finance ClauseIf this Contract is subject to finance, complete all relevant details below. All relevant details must be completed for the following clause to apply.

It is a condition precedent to the Purchaser’s obligation to complete this Contract, that within the Finance Period, the Financier makes available to the Purchaser a loan of the Finance Amount, on terms currently available in transactions of a similar nature.

The Purchaser is the party benefited by this condition precedent.

Finance Amount(Insert amount) $……………………………………………………………………………………………..
Financier(Insert name)
Finance Period(Complete)     Either Until the ……….. day of …………………………20…………. or (insert number)……….. days from the Contract Date or ……………………………………………………………

Before you confirm make sure you have a final approval. Check any conditions to approval. Usually, for instance, you would not risk confirming finance if the approval was still subject to valuation.

Can I buy subject to sale?

A purchaser relying on the sale of their own property can contract subject to the standard Law Society Contract by the Subject to Sale Clause.

The Subject to Sale Clause only gives protection to the purchaser to the extent that the offer on the new property is subject to signing a contract for the sale of the existing one.   

To complete the purchase of the new property, the purchaser will usually not just need to sign a contract for the sale of the old property but will require the actual receipt of funds from the sale of that property to complete the purchase. Prudent purchasers subject to a sale, also make the contract for their new property subject to the further precondition that the sale of the old property proceeds all the way to settlement.  

Subject to Sale ClauseIf this Contract is subject to the signing and /or settlement of the sale of the Purchaser’s Property, complete all relevant details below. All relevant details must be completed for the following clause to apply.
Purchaser’s Property(Insert   address)    …………………………………………………………
  • Subject to Contract: It is a condition precedent to the Purchaser’s obligation to complete this Contract, that within the nominated Contract Selling Period, the Purchaser obtains a contract for the sale of the Purchaser’s Property that is free of any unsatisfied condition precedent. The Purchaser must offer the Purchaser’s Property for sale for no more than the Maximum Asking Price.
Contract Selling PeriodEither             ☐   Not applicable or                   By the …… day of …………20.. ./ or within                      days from……………………………………………………….
Maximum Asking Price(Insert amount)        $..……………………………….
  • Subject to Completion: It is a condition precedent to the Purchaser’s obligation to complete this Contract, that a sale of the Purchaser’s Property is completed on or before the nominated for Sale Settlement Deadline.
Sale Settlement DeadlineEither             ☐   Not applicable or                   The …… day of …………20.. ./ or within                      days from……………………………………………………….

What is conveyancing?

Conveyancing is the process of transferring ownership of property.

The conveyancing process is complex.

Conveyancing transactions involve many parties, conveyancing transactions are time critical. A conveyancing lawyer helps manage the transaction. The conveyancing lawyer needs to empower the client with sufficient knowledge to carry forward the transaction.

Property dealings usually involve a person’s largest financial transaction. Property transactions are usually part of more major changes in a person’s affairs. Failures in the process are likely to have dramatic consequences.

What is the difference between a conveyancer and a lawyer?

The state government requires a person to be licensed as a conveyancer or admitted as a legal practitioner before they undertake conveyancing for a fee.

Lawyers are more highly trained and qualified than conveyancers, have at least a four-year university degree and a six-month post admission diploma.

Licensed conveyancers can be licensed without any formal training or education course. A six-month trade or diploma course for licensed conveyancers has been suggested but is not yet implemented in Tasmania. 

What will the conveyancing cost?

Conveyancing fees are deregulated. Lawyers and licensed conveyancers compete in an open market.

Fees vary from firm to firm. Get a quote. Talk to Tierney Law.

  1. can I have a quote for the service of buying a property please

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