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RESIDENTIAL CONVEYANCING BOOKLET FOR BUYERS

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RESIDENTIAL

CONVEYANCING

BOOKLET

FOR

BUYERS









Liability limited by a scheme approved under Professional Standards Legislation

1. INTRODUCTION



1.1 This Residential Conveyancing Booklet (“the Booklet”) is to be read in conjunction with the detailed

letter of advice to be provided to a property buyer by their lawyer following the signing of a Contract (“the

First Letter”).



1.2 The First Letter contains information which is specific to your transaction, such as:-



(a) contract information;



(b) critical dates;



(c) what you need to do now;



(d) information on identity, searches and PAMDA compliance;



(e) details of legal fees, transfer duty and outlays; and



(f) a checklist of matters you need to attend to.



1.3 This Residential Conveyancing Booklet contains information on the following:-



(a) what is included and excluded from our retainer;



(b) an explanation of the contract terms;



(c) risk and insurance;



(d) how PAMDA affects you;



(e) important contractual matters to consider;



(f) additional matters if your purchase involves a residential tenancy; and



(g) additional matters if purchasing a unit.



1.4 If you have any queries or questions about the information provided to you, please call us.







2. OUR RETAINER



2.1 What is included in our retainer?



Our retainer to act in a conveyance includes all matters which the Queensland Conveyancing Protocol

(endorsed by the Queensland Law Society) recommends as being usual and necessary for the purchase

in Queensland of houses and residential land or residential lots in a community titles scheme.



If you instruct us to exclude any of the steps that are generally considered usual and necessary in a

conveyance we are required by law to provide you with a detailed explanation of the risks associated with

these exclusions. Advice of this nature is not part of the usual conveyancing process and will be an extra

cost to you.



2.2 What is excluded from our retainer?



Our retainer does not extend to matters which go beyond what is usual and necessary in the

conveyancing process. We consider the following items to be excluded:-









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(a) No financial/tax/matrimonial advice



Advice regarding the commercial viability of the transaction or the tax, succession, matrimonial

or other financial implications of the purchase. If you require advice on the commercial viability

or the tax implications of the purchase you should seek the advice of a specialist financial

adviser or tax professional such as your accountant.



(b) No physical inspection



We do not carry out a physical inspection of the property. It is up to you to do this. Issues

relating to the location of the property, impact of adjoining properties, impact of proposed

development, or proposed road works on land in the vicinity of the property that does not

actually adjoin the land will not be discovered by us in our searches. Therefore it is imperative

that you advise us immediately of any concerns you have following your physical inspection of

the property.



(c) Finance



It is up to you to apply for finance (if required) and tell us whether your finance approval is

satisfactory. A finance approval is often subject to satisfactory valuation or other conditions. If

so, it is up to you to arrange for the valuation and decide whether you are able to satisfy any

condition of the finance approval before notifying us that you have finance approval.



We will as part of the conveyance, need to liaise with your financier to arrange settlement,

however, any instructions you give us concerning your loan, the security documents or any

certificates required by your financier are beyond the scope of this retainer.



(d) Building and Pest



It is up to you to obtain any building and pest inspection reports and tell us whether it is

satisfactory to you. We confirm that our retainer does not extend to giving advice regarding the

building and pest inspection report.



(e) Sustainability Declaration



It is up to you to satisfy yourself as to the accuracy of any Sustainability Declaration required to

be given to you (see paragraph headed “Sustainability Declaration”).



(f) Limited town planning information



The information available from town planning searches is set out in section 7.4 of this Booklet

and Tables 1 and 2 of the First Letter. The available information depends on the search you

select. The work to be done as part of this retainer does not include advice about any of the

following issues unless you specifically instruct us to do so:-



(i) Site Issues



The development potential of the site, whether nearby land is subject to development

applications or development approvals which could affect the value or potential

development of the site, whether any applications over the site are current or have

lapsed, whether the site and structures on the site have all necessary approvals,

whether any approvals over the site have lapsed, whether any old or historic

approvals are still current and binding on the site.



(ii) Planning Laws



The laws about compensation for changes in the town planning scheme, deadlines to

apply under superseded versions of the town planning scheme or other deadlines to

make and pursue applications for approvals, whether the seller should assign certain

rights to make applications to the buyer, any existing use rights, infrastructure charges

which apply on development, whether the site is subject to call in powers by the

government, any existing or proposed planning scheme amendments, the effect of the



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South East Queensland Regional Plan, the effect of current and future government

planning policies.



(iii) Other Laws



Local laws including local laws concerning the protection of vegetation, noise including

industrial noise, road noise, rail noise, aircraft noise and future planned increases in

noise levels from these and other sources, current and future transport routes,

vegetation controls, whether the site has been illegally cleared in the past.



(g) Limitation on actions that can be taken under the contract as a result of search

information



The searches which we recommend are essential for a buyer to conduct in the conveyancing

process, however the actions you can take as a consequence of the information produced by

the searches depends on the contract. The standard REIQ contract which has been approved

by the QLS is written to have regard to the rights of the buyer and seller with rights to terminate

for matters which are not considered fundamental to the contract being limited. As a

consequence not all adverse search results will give you a right to terminate or a claim for

compensation.



(h) Survey



We do not conduct a survey – this is your responsibility. Issues such as encroachments will not

be identified unless a survey is conducted.







3. EXPLANATION OF THE CONTRACT TERMS



3.1 Form of contract



There are two forms of contract recommended by the Real Estate Institute of Queensland and the

Queensland Law Society. They are:-



(a) Houses and Residential Land (Eighth Edition); and



(b) Residential Lots in a Community Titles Scheme (Fourth Edition).



You should read your contract in detail, in particular the reference schedule.



In this section we point out contract terms which we consider important in relation to your purchase.



3.2 Reference Schedule



The reference schedule contains the particulars which are relevant to your contract. These particulars

are set out in the First Letter. You need to check that they are accurate and tell us immediately if the

particulars are not accurate.



3.3 Time essential



Time is of the essence of the contract. This means that you must perform all your obligations under the

contract strictly by 5pm on the due date. For example, you must be ready willing and able to settle on the

Settlement Date, otherwise the seller may either terminate or affirm the contract. In both cases, the seller

would also be able to claim damages from you.



3.4 Deposit



Payment of the deposit is a sign of your intention to proceed with the contract. It is usually a substantial

amount but no more than 10%. If the contract becomes unconditional and you later default under the

contract then the seller may be entitled to forfeit the deposit and sue you for damages. The deposit

holder (who must be a solicitor or real estate agent) holds the deposit in trust until completion when the

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deposit will be paid to the seller (usually net of the agent’s commission). It is therefore important that the

deposit holder be either a solicitor or real estate agent and that the deposit is held in a trust account.



If you were to terminate for valid reasons in accordance with the contract, then the deposit would be

repayable to you. If the deposit is not paid on time or you are otherwise in fundamental breach of the

contract the seller will be able to terminate the contract and forfeit the deposit. The seller may also

recover as a liquidated debt, any part of the deposit which is not paid when required. If the seller is

obliged to pay GST then GST will be payable on the forfeited deposit. The seller may also be entitled to

damages.



3.5 Finance



If the contract is subject to finance, you must take all reasonable steps to obtain finance approval by the

finance date. This would include making a finance application shortly after the contract date and pursuing

the application diligently. If you have a letter of approval from a financier you should send it to us. We

can answer questions about the finance approval, however, the responsibility to obtain finance approval

and decisions relating to the acceptability or otherwise of conditions in the finance approval rests with

you.



We must notify the seller as to whether or not you have finance approval on or before 5:00pm on the

finance date.



You need to give us instructions on the satisfaction or otherwise of the finance condition in sufficient time

prior to the deadline for notification to enable us to prepare and give the requisite notice under the

contract.



We suggest you plan to give us instructions on the day before the finance date, however, if this is not

possible by 12 noon on the finance date.



If you do not have written finance approval from your financier, we can (on your behalf) by notice,

terminate the contract (and the deposit will be returned to you) or seek an extension of time for finance.

Agreement from the seller is required to any extension and there is a risk that your request may be

declined.



Alternatively, you may instruct us to waive the benefit of the finance condition, however, waiving the

benefit of the finance condition means you are bound to complete the contract regardless of whether your

financier approves finance or the finance terms are satisfactory.



If we do not notify the seller that finance is approved or that the finance condition is waived by the finance

date then the contract remains on foot and both you and the seller have a right to terminate the contract.

You also have a continuing right to waive the benefit of the finance condition up until the time the contract

is terminated by either party.



If you decide to waive the benefit of the finance condition you must instruct us to give notice to the seller,

as your waiver will not be effective unless notice of waiver is received by the seller prior to the seller

notifying us of the termination of the contract.



3.6 Building and Pest Inspections



If the contract is subject to satisfactory building and pest inspection reports you must take all reasonable

steps to obtain the reports. You must use a licensed building inspector otherwise you will not be able to

terminate the contract on the grounds that you are not satisfied with the building and pest inspection. You

should provide us with a copy of the building and pest reports.



We must give written notice to the seller’s solicitors on or before 5:00pm on the inspection date as to

whether or not you are satisfied with your building and pest reports.



You need to notify us of your satisfaction or otherwise with the building and pest reports in sufficient time

to enable us to prepare and give the requisite notice under the contract.



We suggest you plan to give us instructions on the day before the inspection date, however, if this is not

possible, by 12 noon on the inspection date.



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If you do not have a report by the inspection date you can instruct us to seek an extension, however, the

seller is not obliged to grant the extension.



If you are satisfied with the report, you should instruct us to give notice to the seller that the building and

pest condition is satisfied.



If, acting reasonably, you are not satisfied with the results of the building and pest reports then you may

instruct us to terminate the contract. Your other option is to waive the benefit of the condition in which

case the contract will no longer be subject to this condition and you will be obliged to proceed with the

contract. In either of these cases, you do not have any recourse against the seller under this condition for

issues which are raised in the building and pest reports.



If you do not instruct us to give a notice to the seller before 5:00pm on the inspection date, the contract

remains on foot and both you and the seller have a right to terminate the contract. You can also before

the seller gives a notice terminating the contract, elect to waive the benefit of the building and pest

condition.



If you decide to waive the benefit of the building and pest condition you must instruct us to give notice to

the seller, as your waiver will not be effective unless notice of waiver is received by the seller prior to the

seller notifying us of the termination of the contract.



Note, there are no other rights to terminate for unapproved structures in the contract, unless a show

cause or enforcement order exists.



3.7 Settlement Funds



If you are providing money for the purchase price in addition to the financed amount, you will need to

ensure cleared funds for the balance amount required to complete the purchase are deposited to our trust

account at least one day prior to the day of settlement. If you need to do this please contact us and we

will provide our trust account details to you.







4. INSURANCE



4.1 Risk



The property will be at your risk from 5:00pm on the first business day after the Contract Date.



Despite this, the seller has a continuing obligation until settlement to take reasonable care of the property.



4.2 If the lot you are purchasing is a residential house, not in a Community Title Scheme



Because the property is at your risk, we recommend if you have not already done so, that you arrange

property insurance cover in respect of the house, contents and public liability.



You can arrange insurance by contacting an insurance broker or home insurance company directly.



4.3 If the lot you are purchasing is a lot in a Community Titles Scheme with common walls



The body corporate is responsible for insuring the building for replacement value and public liability in

respect of the common property and any relevant body corporate assets. We will obtain insurance

information as part of our searches and you will need to satisfy yourself the insurance is adequate.



We recommend that you arrange insurance cover in respect of the contents of the unit (which will include

things such as carpets, curtains and internal blinds) and public liability insurance for the interior of the lot.



4.4 If the lot you are purchasing is a lot in a Community Titles Scheme with no common walls



The body corporate is responsible for public liability insurance in respect of the common property and any

relevant body corporate assets. The body corporate may insure the building with the agreement of all lot

owners.

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We recommend that you arrange insurance cover in respect of the building (perhaps by way of a cover

note), the contents of the unit (which will include things such as carpets, curtains and internal blinds) and

public liability insurance for the interior of the lot.



The building insurance should cover you until you are able to discover by search whether the body

corporate has common insurance for the building.



If the body corporate has not insured the building then your insurance of the building will be relevant, and

you should pay the applicable premium, but if you are satisfied with the body corporate insurance you can

cancel your building insurance, but must still maintain insurance of the contents and public liability within

the unit.



4.5 If obtaining finance



If you are obtaining finance it will be necessary for the bank to be noted on the policy as first mortgagee.

You should arrange for your insurance broker or home insurance company to attend to this for you.







5. HOW DOES THE PROPERTY AGENTS AND MOTOR DEALERS ACT 2000 (“PAMDA”) AFFECT

YOU?



5.1 Warning Statement



PAMDA requires that all proposed relevant contracts for the sale of residential property in Queensland

(have attached a PAMD Form 30c Warning Statement (“Warning Statement”).



The only exception is where the property is sold under the fall of the hammer at auction, however if the

property is passed in a Warning Statement must be attached to the contract.



You should read the Warning Statement carefully as it contains important consumer protection

information regarding a cooling off period and recommends that you obtain an independent valuation of

the property.



Be aware that by signing the Warning Statement you acknowledge:-



(a) you have read all sections of the Warning Statement;



(b) your attention has been directed to the Warning Statement and the proposed relevant contract

attached to the Warning Statement;



(c) you signed the Warning Statement before you signed the proposed relevant contract; and



(d) signing the Warning Statement negates any termination right you may have had under s.370 of

PAMDA.



5.2 Information Sheet



The Body Corporate and Community Management Act 1997 (“BCCMA”) requires that all contracts in

relation to lots in a community titles scheme have attached a BCCM Form 14 (“Information Sheet”). As

with the Warning Statement, an Information Sheet is not required to be attached if the property is sold at

auction.



You should read the Information Sheet carefully as it contains important information about community

titles schemes and the obligations of the body corporate and individual lot owners.



Be aware that by signing the Information Sheet you acknowledge:-



(a) you have read all sections of the Information Sheet;



(b) you have signed the Information Sheet before you signed the proposed relevant contract to

which it is attached;

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(c) your attention has been directed to the Information Sheet and the proposed relevant contract;

and



(d) signing the Information Sheet negates any termination rights you may have had under Sections

206A or 213A of BCCMA.



5.3 Cooling Off Period



Under PAMDA, unless you waive the cooling off period, you are entitled to a five (5) business day cooling

off period. This period starts on the day that you or your appointed agent (which is usually us as your

appointed solicitors) receive the relevant contract, signed by the seller, in accordance with the

requirements of PAMDA or are deemed under s.369(2) of PAMDA to have received the relevant contract.

The cooling off period ends at 5:00pm on the fifth business day.



You are entitled to terminate the contract during the cooling off period. If you terminate the contract in the

cooling off period, the seller is entitled to retain a termination penalty of 0.25% of the purchase price from

the deposit. The balance deposit must be refunded to you within fourteen (14) days following termination.



If you decide to terminate the contract during the cooling off period you should tell us immediately so that

we have sufficient time to give the requisite notice before the cooling off period ends.



5.4 Valuation



The Warning Statement recommends that you obtain an independent valuation of the property. We

endorse this recommendation and suggest valuation advice be obtained from an independent

Queensland Valuer. We do not provide valuation advice and the price is something in respect of which

you need to satisfy yourself. The contract is not conditional upon a valuation being obtained and

therefore, if you do not want to proceed until you have a valuation, you will have to obtain the valuation

prior to entering the contract or at the very least prior to expiration of the cooling off period.



The contract provides that the seller must allow you access to the property (after reasonable notice) once

prior to settlement for the purpose of valuing the property.



5.5 Vacant land – Non residential use – Pre-contract notice



If you are purchasing vacant land through an agent or auctioneer and at the date of the contract the land

is not able to be lawfully used for residential purposes the seller’s agent or auctioneer should have

delivered a notice under section 149/226 of PAMDA to you stating, amongst other things, that the land is

not able to be lawfully used for residential purposes.



The limited town planning certificate should tell you if the land cannot be used lawfully for residential

purposes.



If:-

(a) you are purchasing vacant land;

(b) the limited town planning certificate reveals that the land cannot be used for residential

purposes; and

(c) you did not get a notice from the agent/auctioneer under s.149/s.226 of PAMDA that the land

cannot be used for residential purposes,

you need to tell us immediately, as you may have a right under s.150/s.227 of PAMDA to avoid the

contract by giving a notice of avoidance within six (6) months of the contract date.







6. POOL SAFETY



6.1 What is a “swimming pool”



A regulated swimming pool is any excavation or structure capable of being filled with water to a depth of

300mm or more including a pool, spa pool/tub or wading pool, but generally does not include a fish pond

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(or similar ornamental water feature), dam, water tank, watercourse, spa bath in a bathroom (unless

continually filled with 300mm or more of water) or birthing pool.



If you have any doubt as to whether a pool is situated on the property, then you should contact us.



6.2 Non-shared pool – obligation to obtain Pool Safety Certificate



Where there is a pool on the property (or on adjacent land used in association with the property) and

there is no Pool Safety Certificate in effect, the seller must not enter into a contract to sell the property

without giving you a Form 36 Notice of No Pool Safety Certificate..



If you complete the purchase without obtaining a current Pool Safety Certificate at settlement you become

responsible for obtaining a Pool Safety Certificate within ninety (90) days of settlement and are also

responsible at your cost to carry out all works required (e.g. upgrading the pool fence) to meet the pool

safety standards currently in force.



We do not remind you of this date and suggest you make a note of the date by which you must obtain a

Pool Safety Certificate.



6.3 Non-Shared Pool – How the contract operates



The contract requires the seller to complete the following questions:-



Q1 - is there a pool on the property or on adjacent land used in association with the property?



Q2 - will a Pool Safety Certificate be given to the buyer at settlement?



Q3 - has a Notice of No Pool Safety Certificate been given?



If the seller has indicated that it will give a Pool Safety Certificate to you at settlement then, or prior to, the

seller must hand over a copy of the current Pool Safety Certificate at settlement, failing which you can

terminate the contract. If the Pool Safety Certificate provided to you expires before settlement, the seller

must obtain a new Pool Safety Certificate which is in effect at settlement.



If the seller indicates that it has given a Notice of No Pool Safety Certificate or does not complete the

questions the contract is conditional upon you obtaining from a licensed pool safety inspector:-



(a) confirmation that the pool safety requirements have been met and the issue of a Pool Safety

Certificate; or



(b) confirmation of the works required before a Pool Safety Certificate can be issued.



You must on or before the Pool Safety Inspection Date notify the seller that:-



(c) a pool safety inspector has issued a Pool Safety Certificate in which case neither party has

further rights; or



(d) if a Pool Safety Certificate is not issued, that you terminate the contract. You must act

reasonably in making this decision; or



(e) you elect to waive the benefit of the condition and proceed to settlement, in which case you

become responsible at your expense for obtaining the Pool Safety Certificate within ninety (90)

days of settlement.



You need to notify us in sufficient time to enable us to prepare and give the requisite notice under the

contract.



We suggest you plan to give us instructions on the day before the Pool Safety Inspection Date, however,

if this is not possible, by 12 noon on the Pool Safety Inspection Date.



Your other option is to waive the benefit of the condition in which case you must proceed to complete the

contract.



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If you do not instruct us to give a notice to the seller before 5:00pm on the Pool Safety Inspection Date,

the contract remains on foot and both you and the seller have a right to terminate the contract until

settlement or a Pool Safety Certificate issues. You also have the right to waive the benefit of the

condition, before the seller gives a notice terminating the contract.



If you decide to waive the benefit of the condition you must instruct us to give notice to the seller, as your

waiver will not be effective unless notice of waiver is received by the seller prior to the seller notifying us

of the termination of the contract.



6.4 Shared Pool - (e.g. a pool on the scheme land of an apartment building)



In the case of a shared pool the body corporate is responsible for obtaining the Pool Safety Certificate.

The seller has an obligation, prior to settlement, where a Pool Safety Certificate is not in effect, to give a

Notice of No Pool Safety Certificate to:-



(a) you as the buyer;



(b) the body corporate (being the owner of the shared pool); and



(c) the chief executive of the Department of Infrastructure and Planning.



The owner of the shared pool (usually the body corporate) then has ninety (90) days in which to obtain a

Pool Safety Certificate, subject to the transitional arrangements which:-



(d) in the case of a shared pool used for short term accommodation, extends the time to 1 June

2011; and



(e) in the case of any other shared pool, extends the time to 1 December 2012.



The consequences for you are that the body corporate must obtain a Pool Safety Certificate at the cost of

the body corporate and you may be called upon to contribute your proportionate share of the cost through

body corporate levies.



6.5 Prohibition on letting



If you proceed to settlement without a Pool Safety Certificate for a pool on your property you are

prohibited from entering into a lease or tenancy without first obtaining a Pool Safety Certificate.



This prohibition on leasing premises with a non-shared pool prior to obtaining a pool safety certificate

applies to new leases or tenancies entered into on or after 1 December 2010 subject to some exceptions

and extensions in particular circumstances.



6.6 Penalties



There are substantial penalties for non-compliance.







7. IMPORTANT CONTRACTUAL MATTERS FOR YOU TO CONSIDER



7.1 Purchasing Entity/Tenancy



If any of the following apply:-



(a) you are purchasing the property as trustee, then we need to establish that the trust deed

authorises acquisition of the property and that the trustee named in the trust deed corresponds

to the buyer named in the contract. Please therefore immediately forward the original trust deed

to us for this purpose.



(b) there is more than one buyer, then please advise whether you intend to purchase the property

as joint tenants or tenants in common (and, if so, in what proportions) as we will need to specify

this on the transfer documents. The effect of joint tenancy ownership is that the entire title to

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the land will, on the death of one owner, pass to the survivors despite any provision in a will. If

you purchase as tenants in common then on the death of a co-owner the share in the property

of that co-owner will pass in accordance with the will of that co-owner or in accordance with the

laws of intestacy if the co-owner does not have a valid will.



(c) you are purchasing the property for investment purposes and the contract has not yet been

entered into, then we recommend, if you have not already done so, that you seek advice from

an accountant as to the most beneficial purchasing entity taking into account your financial

circumstances. If you decide to purchase the property through another entity then please

contact us immediately with the purchasing entity details.



7.2 Date of Birth



Please tell us the date of birth of each owner. We must provide this information to the Office of State

Revenue for land tax purposes.



7.3 Foreign ownership



If you are a foreign person or are a trustee of a foreign trust:



(a) you may need to obtain the consent of the Foreign Investment Review Board under the Foreign

Acquisition and Takeovers Act 1975; and



(b) you may need to notify the Department of Environment and Resource Management under the

Foreign Ownership of Land Register Act 1988.



Please telephone us if you think this applies to you.



7.4 Present Use



If the present use is not lawful under the relevant town planning scheme as at the contract date and this

has not been disclosed in the contract then you may be able to terminate the contract up until two (2)

business days before the settlement date.



It is not possible to ascertain whether the present use is lawful by search alone. The only way of

ascertaining this is by physical inspection and a detailed check against the town planning codes which

apply. This type of investigation will usually be carried out by a town planner. Issues relating to present

use and related town planning matters which are not dealt with as part of our retainer are set out in

Section 2 of this Booklet.



There are three types of planning and development certificates which can be obtained from the local

authority to assist in the investigation. The information these searches disclose and their relative cost

(using Brisbane City Council fees as a guide) are set out below:-



(a) Limited Certificate - $107 (takes twelve (12) business days)



A limited planning and development certificate provides:-



(i) information as to the town plan area or zone in which the property is located; and



(ii) by reference to the plan, a description of the planning scheme provisions applying to

the property.



Limited certificates do not tell you whether the existing use is lawful or whether any conditions

for the use of the property have been complied with. This certificate reveals the designated

zone of the land and any other restrictions on the use of land in the zone. For example, if the

property is in a Demolition Control Precinct or subject to character housing or other

development codes of general application to the area.



(b) Standard Certificate - $473 (takes twelve (12) business days)



A standard planning and development certificate provides:-



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(i) the same information as in a limited certificate; and



(ii) a copy of every decision notice or negotiated decision notice for a development

approval that has not lapsed, which has been issued by the local authority in respect

of the property.



By looking at the existing use of the property, the local authority area or zone for the property

and the approvals that have been obtained for the property it is possible to ascertain if the

property is capable of being lawfully used for its existing use or for other uses.



The certificate does not identify whether the conditions of any approval have been complied

with.



(c) Full Certificate - $2,570 (takes thirty (30) business days)



A full planning and development certificate provides:-



(i) the same information in a limited certificate and standard certificate; and



(ii) if there is currently in force for the property a development approval containing

conditions (including conditions about the carrying out of works or the payment of

money), a statement about the fulfilment or non-fulfilment of each condition.



The full certificate is more expensive because a town planning officer from the local authority

needs to inspect the property and go through conditions of approval to identify those which have

been complied with and those which have not.



(d) Recommendation on Town Planning Certificates



Our recommendations on the type of certificate to obtain are:-



(i) for a residential dwelling or vacant land, a limited certificate is adequate unless you

are intending to redevelop the property when you may require a standard certificate.

Unless you instruct us that you intend to redevelop the property we recommend you

instruct us to order a limited certificate;



(ii) for residential units, the overall development must have been granted an approval

for a material change of use. It is prudent to obtain a standard certificate to confirm

whether a material change of use approval was obtained. We recommend you

instruct us to obtain a standard certificate. If you do not obtain a standard certificate

your risk is that you may not be able to establish that the use is lawful. In that case, we

recommend, at least, that you instruct us to obtain a limited certificate. We also

recommend you instruct us to order a building search for a certificate of classification.

The issue of a certificate of classification usually demonstrates that the local authority

is of the view that the conditions of development approval have been satisfied. The

only sure way of knowing whether the conditions of the approval have been complied

with is to obtain a full certificate, however due to the length of time it takes and the

costs involved we do not think the benefit of obtaining a full certificate is worthwhile. If

you require a full certificate please contact us immediately.



7.5 Environmental Protection



In addition to the disclosures required under the contract, the Environmental Protection Act 1994(“EPA”)

requires that the seller disclose in the contract any of the following, if applicable:-



(a) if the land is the subject of a notice issued under the EPA informing the seller that the

Environmental Protection Authority believes the land has been or is used for a notifiable activity

or is contaminated, a notice to conduct or commission a site investigation, a remediation notice

or a notice that the Environmental Protection Authority requires a site management plan to be

prepared for the land; or



(b) if a magistrate issues an order under the EPA for an authorised person to enter the land to

conduct an investigation or to conduct work.

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If any of these situations arise and they are not disclosed in a notification by the seller under the EPA

prior to you entering into the contract then you may terminate the contract by notice given before the

earlier of completion or possession. In this event, all money paid by you must be refunded by the seller.



The searches we undertake only identify land which is on the Contaminated Land Register or the

Environmental Management Register but not land which is the subject of the notices referred to above. If

you have any suspicions that the land may be contaminated or that any of these matters may affect the

land, please contact us immediately so that we can take the steps necessary to address the issue.



7.6 Administrative Advices



Administrative advices may also reveal other interests impacting on the land that require disclosure by the

seller such as heritage listing or agreements, coastal protection notices, nature conservation orders,

vegetation clearing offences, Milton Brewery notices (in respect of a unit) or water licences.



In addition an administrative advice is lodged on the title where land is declared acquisition land under the

Queensland Reconstruction Authority Act 2011 (QLD) and the following applies:-



(a) the registered owner is not able to sell the land other than to the relevant authority;



(b) if the owner does want to sell the land the relevant authority must acquire it.



Your rights in relation to any administrative advice depend on the content of the notification which gives

rise to the administrative advice and the extent of disclosure in the contract or otherwise.



7.7 Unregistered encumbrances



There may be unregistered encumbrances which affect the property or the title such as:-



(a) unregistered water, sewerage or combine drains; or



(b) access or extraction rights under the Greenhouse Gas Storage Act 2009; Geothermal Energy

Act 2010; or the Petroleum and Gas (Production and Safety) Act 2004.



The standard searches may not reveal all unregistered encumbrances. In most local authorities the

written Council rate search will show the existence of any sewerage or drainage lines which traverse the

property. If you have any concerns about sewerage and drainage lines, access rights for geothermal

exploration or production or wish to search for other unregistered encumbrances you should contact us

immediately.



7.8 State Government – Prescribed Projects



It is possible that the land you are purchasing may adjoin or be included in an investigation area or an

affected area in respect to infrastructure projects being undertaken by the State Government under the

State Development and Public Works Organisation Act 1971 and associated regulations, for example,

water infrastructure pipeline works.



The use and enjoyment of the land you propose to purchase may be affected by any such project even

though the land is not directly affected. Our searches will only reveal matters directly affecting your land.



We therefore suggest you make enquiries to ascertain if any prescribed projects have been declared or

proposed in the general vicinity of the land you propose to purchase.



7.9 Sustainability Declaration



The Building Act 1975 requires the seller to provide you with a sustainability declaration in the approved

form in relation to the property prior to advertising the property for sale.



The sustainability declaration:-



(a) must be given to you on request;





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(b) must be displayed conspicuously at an open house or otherwise given to you at an inspection of

the home;



(c) should be included in any advertising material given to you (other than at inspection where (b)

above applies); and



(d) must include reference to its location in any marketing material or advertisement about the sale

of the property.



Please let us know if you have not seen or been made aware of the existence of the sustainability

declaration.



A failure by a seller/agent to provide or display the sustainability declaration does not entitle you to

terminate the contract, however, you may be able to claim compensation if you subsequently incur a loss

or expense arising from a false or misleading sustainability declaration.



7.10 QBSA Owner Builder Notice



If:-



(a) building work has been carried out on the property by a person who is not licensed to carry out

that building work; and



(b) the land is offered for sale within six (6) years after completion of the building work,



the seller has a statutory obligation before a contract is signed to give notice to a buyer containing details

of the work and the warning required by regulation.



If the notice and warning are not given then the seller will be taken to have given the buyer a contractual

warranty that the building work was properly carried out. The effect of this is that if the work turns out not

to have been properly carried out then you may have a right to claim compensation from the seller.



Please let us know if you are aware of the seller having conducted any work as an owner builder or if you

have received any such notice from the seller.



7.11 Neighbourhood Disputes



Please tell us if you have been told about or become aware of any disputes with neighbouring property

owners about fences or trees, so that we can ascertain whether these disputes will affect you.



7.12 Instalment Contract



We will need to determine whether your contract is an instalment contract. A contract can become an

instalment contract for many reasons including the following:-



(a) the deposit is more than 10%; or



(b) the deposit is stated to be non-refundable in all circumstances; or



(c) the buyer is given a rebate off the purchase price; or



(d) the buyer is required to pay money to the seller (other than a 10% deposit) prior to receiving a

transfer and the amount payable under the contract exceeds market value for what is provided

in exchange. For example, a rent to buy contract may require the payment of instalments which

exceed the market rent that would otherwise be payable.



The effect of the contract being an instalment contract is:-



(e) you can obtain another thirty (30) days in which to settle;



(f) the seller is prohibited from re-selling or re-mortgaging the property prior to settlement; and





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(g) the seller may be required to comply with the National Credit Code, including the requirements

for pre-contractual disclosure, ongoing notices and certain pre-requisites to enforcement.



Unless you instruct us to investigate the possibility that your contract is an instalment contract, we will

assume that this investigation will not be of any benefit to you and that you wish to settle the purchase on

the settlement date. If, of course, your capability to settle on the settlement date changes at any time,

you should let us know.



7.13 Transfer Duty



Transfer duty is a state tax which is payable on the transaction.



As transfer duty is applicable to each transaction, you must ensure that the buyer named in the contact is

the person or entity that will own the property. By purchasing in the correct name you will avoid multiple

transactions and the prospect of more than one assessment of transfer duty, for example, purchasing in

one name and then nominating a substitute buyer involves two dutiable transactions and two

assessments of transfer duty.



Concessions on the transfer duty are available if the property is being purchased in your own name and

will be used as your home.



The concession is available if you intend to occupy the property within twelve (12) months of settlement,

and applies to the first $350,000 in the value of the property.



You will lose your entitlement to the full concession if:



(a) you sell, lease, transfer or otherwise grant exclusive possession of all or part of the residence

before occupying it as your home; or



(b) you fail to occupy the residence within twelve (12) months of settlement; or



(c) you sell, lease, transfer or otherwise grant exclusive possession of part or all of the residence to

another person within twelve (12) months from your date of occupation of the residence; or



(d) there are existing tenants in the residence and they do not vacate the property within six (6)

months of settlement.



An additional concession is available if the property is your first home. No transfer duty is payable for

purchases if the property is your first home and is valued under $500,000. The concession progressively

reduces as the value of the acquired property increases up to $550,000. There is no additional first home

concession where the value of the acquired property is $550,000 or greater and transfer duty in this

circumstance is payable according to the home concession rates.



A concession on transfer duty is available if the property is being purchased in your own name and is

vacant land to be used to construct your first home which will be occupied as your principal residence.

No transfer duty is payable for purchases of first home vacant land up to $250,000 in value. The

concession progressively reduces as the value of the acquired land increases up to $400,000. There is

no concession where the value of acquired land is $400,000 or greater and transfer duty in this

circumstance is payable at ordinary rates.



No concession on duty is available on a purchase for investment purposes or a purchase by a company

or trust.



7.14 Seller’s Warranties



Under the contract the seller gives warranties about various matters which could affect the property, such

as correctness of title, capacity to complete, no judgments, orders or writs affecting the property, no

unregistered dealings, no notices of body corporate meetings and no obligation to give an EPA notice.



If the seller breaches any of these warranties the buyer may:-



(a) terminate no later than two (2) days before settlement; or



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(b) claim compensation prior to settlement and proceed to completion.



7.15 Property adversely affected



If the property is adversely affected at the contract date because:-



(a) the present use is not lawful;



(b) the land is affected by a proposal of a competent authority e.g. Transport Infrastructure;



(c) access or any services to the land passes unlawfully through other land;



(d) an authority has issued a current notice to treat, or notice of intention to resume;



(e) the property is affected by the Queensland Heritage Act 1992 or is included in the World

Heritage List,



and these facts are not disclosed in the contract, then you may be able to terminate the contract up until

two (2) business days prior to settlement. If you do not terminate in accordance with the contract, you will

be treated as having accepted the property subject to these matters.



7.16 Survey



The searches we conduct cannot ascertain if there:-



(a) is an error in the boundaries/area of the land; or



(b) exists any encroachment onto or from the land.



Under the contract you are entitled to survey the land to establish the location of structures on the land or

adjoining land. If there are errors in the boundaries then you may be entitled to claim damages or

terminate the contract.



If you wish to satisfy yourself about survey matters then you should engage a surveyor to survey the land

prior to settlement. If the surveyor makes any adverse observations you should contact us immediately.



7.17 Pre-settlement Inspection



Under the contract you are entitled (after giving reasonable notice to the seller) to enter the property once

for the purpose of conducting a pre-settlement inspection. We suggest you make arrangements directly

with the seller’s agent to arrange to inspect the property closer to the time of settlement and, amongst

other things, check that no fixtures have been removed.



7.18 Transfer documents



We are able to sign the transfer documents on your behalf. We will send a copy of the transfer

documents to you for your records.



7.19 Keys



The seller is obliged to deliver all keys to the property at completion. If there is an agent, we will arrange

for the seller to leave the keys with the agent and the keys can be collected by you from the agent after

settlement.



If this arrangement is not satisfactory please let us know and we will request that the keys be available at

settlement.



7.20 Other Professionals



We suggest you may wish to seek advice about the transaction from the following other professionals:-



(a) an accountant – in relation to the commercial viability and tax considerations of the purchase;



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(b) a valuer – to assure yourself that the price represents the market value of the property; and



(c) a town planner – to assess compliance issues or give advice regarding proposed future

development.



7.21 First Home Buyers’ Scheme



If you are purchasing your first home in Australia, you should contact your financier to see if you are

eligible for the Government’s first home buyers’ grant.



7.22 Settlement Notice



We will lodge a Form 23 Settlement Notice on the title of the property prior to settlement. The effect of

this notice is to protect your interest in the property by prohibiting the registration of any conflicting

interest in the property (such as a writ of execution, mortgage or transfer to an unrelated third party, but

not a caveat) during the period between settlement and when the transfer in favour of you is lodged for

registration at the Department of Environment and Resource Management.



7.23 Electrical Safety Switch



If an approved electrical safety switch for general purpose socket outlets has not been installed in the

property under the Electricity Regulations you are required to have one installed within 3 months following

settlement. Failure to do so could result in a $1,500 penalty.



7.24 Smoke Alarms



Failure to install compliant smoke alarms is an offence under the Fire and Rescue Service Act 1990. If

the property does not have compliant smoke alarms installed, you should ensure this is done immediately

following settlement.







8. ADDITIONAL MATTERS IF YOUR PURCHASE INVOLVES A RESIDENTIAL TENANCY



8.1 Residential Tenancy Inquiries



If you are purchasing the property subject to an existing residential tenancy we recommend, preferably

before signing the contract, that you instruct us to obtain a copy of the tenancy documents from the seller

and that the documents be reviewed and/or you make inquiries of the seller to ascertain:-



(a) whether the tenancy is an enforceable agreement under the Residential Tenancies and

Rooming Accommodation Act 2008 and whether the seller complied with its obligations of

disclosure under the Act;



(b) whether the term is fixed or periodic and the time left to run;



(c) if the tenancy is longer than three (3) years, that it is registered;



(d) the current rent payable by the tenant;



(e) if the rent (or any other payments) are in arrears;



(f) if there are any special arrangements between the seller and the tenant that do not appear in

the tenancy agreement;



(g) any discrepancies between the contract and the tenancy agreement;



(h) any unusual provisions in the tenancy agreement;



(i) whether a bond was requested and whether it is being held by the Residential Tenancies

Authority;



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(j) whether the seller is in dispute with the tenant on any issue.



If as a result of our inquiries we discover something adverse regarding the tenancy then we will contact

you to discuss.



8.2 Bond Transfer – Residential Tenancy



Assuming you are satisfied with the results of our inquiries regarding the tenancy and you proceed with

the contract, the usual process for the transfer of the tenancy agreement and bond is as follows:-



(a) a Residential Tenancies Authority Form 5 Change of Lessor or Lessor’s Agent needs to be

prepared by us or your agent. Please instruct us who you intend to appoint as agent, or

organise your appointed agent to complete the Form 5 and send it to us;



(b) we will send the Form 5 to the seller’s solicitors for the seller to sign;



(c) the seller will deliver the completed and signed Form 5 to us at settlement;



(d) following settlement we will forward the Form 5 to you for you or your agent or lodge with the

Residential Tenancies Authority;



(e) upon receipt, you must immediately:-



(i) send or have your agent send a copy of the Form 5 to the Residential Tenancies

Authority. (The bond will then be held on your behalf by the Authority); and



(ii) send (or have your agent send) a copy to the tenant so that the tenant knows to pay

future rental to you as landlord or to your agent.







9. ADDITIONAL MATTERS TO CONSIDER IF PURCHASING A UNIT



9.1 Review of BCCM Disclosure Statement



As part of our retainer we review the BCCM disclosure statement provided with the contract. The BCCM

disclosure statement must be accompanied by a copy of the Community Management Statement and will

give you the following information:-



(a) details of the secretary or body corporate manager or in a specified 2 lot scheme, the person

responsible for keeping records;



(b) details of the body corporate administrative and sinking fund levies that apply to the lot you are

purchasing and the extent to which those levies are based on the contribution schedule lot

entitlements (“CSLE”) or the interest schedule lot entitlements (“ISLE”) for the scheme;



(c) a statement that the CSLE and ISLE are contained in the Community Management Statement;



(d) improvements on common property for which you may be responsible;



(e) details of any body corporate assets; and



(f) that there is a committee of the body corporate or a body corporate manager engaged to

perform the functions of the committee



If the disclosure statement contains omissions or is inaccurate and you would be materially prejudiced if

required to complete the contract, then you may have rights to terminate the contract. The only way to

discover omissions or inaccuracies is to search the body corporate records. We therefore recommend

that you instruct us to arrange a search of the body corporate records.









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9.2 Community Management Statement (CMS)



The CMS:-



(a) tells you which regulation module applies to the scheme;



(b) specifies the CSLE for the lot and the aggregate CSLE.



(c) for a scheme established before 14 April 2011 the lot entitlements must be equal, except to the

extent explained in the CMS that it is just and equitable in the circumstances for them not to be

equal (however, no explanation is required if the scheme was established before 4 March

2003);



(d) for a scheme established after 14 April 2011:-



(i) must state that the CSLE are based on the equality principle or the relatively principle;



(ii) if the equality principle applies, the lot entitlements must be equal, except to the extent

explained in the CMS that it is just and equitable in the circumstances for them not to

be equal;



(iii) if the relatively principle applies, the CMS must include an explanation which

demonstrates the relationship between the lots by reference to one or more particular

relevant factors, including the following:-



(A) how the community titles scheme is structured;



(B) the nature, features and characteristics of the lots;



(C) the purposes for which the lots are used;



(D) the impact the lots may have on costs of maintaining the common property;

and



(E) the market values of the lots.



(e) specifies the ISLE for the lot, the aggregate ISLE and for a scheme established after 14/4/2011,

includes a statement that the ISLE reflects the respective market values of the lots and if not,

the CMS must include an explanation as to why it is just and equitable in the circumstances for

the ISLE not to reflect the respective market values of the lots.



(f) sets out the by-laws which apply to the scheme. You should read these by-laws carefully as

they are the rules which apply to the scheme; and



(g) if exclusive use areas have been allocated the Community Management Statement will include

plans (and a supporting by-law) which show the exclusive use areas allocated to various lots in

the scheme.



The CSLE is the basis for calculating your proportion of body corporate administrative and sinking fund

levies payable (except in the case of insurance) and is the value of your voting rights on an ordinary

resolution of the body corporate.



The ISLE is the basis for calculating a portion of the insurance premium, your share of the common

property, your interest on termination of the scheme and the unimproved value of the lot.



If you have any concerns about how the ISLE or the CSLE have been calculated or the principle upon

which the CSLE were decided, please contact us.



If the seller is the original owner for the community titles scheme established on or after 14/4/2011 and

you reasonably believe:-



(h) the CSLE are inconsistent with the principle upon which they were decided; and

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(i) you would be materially prejudiced if compelled to complete the contract,



you may terminate the contract before it settles, by notice in writing, given not later than thirty (30) days

(or a longer period agreed between the buyer and the seller) after you (or your agent) receives a copy of

the contract, which notice must identify the relevant section of the BCCM Act upon which you rely.



In the event that the CMS recorded is different from that which has been disclosed and you are materially

prejudiced by the difference or inaccuracy, you may terminate the contract by notice in writing which may

need to refer to the section of the action which you rely given:-



(j) fourteen (14) days after the contract is received; or



(k) another day agreed between the buyer and the seller.



It is possible that the CSLE may be amended in the following circumstances:-



(l) by passing a resolution without dissent or applying to a specialist adjudicator or QCAT; or



(m) for an existing scheme where an adjustment order has previously been made, an owner, by

proposing a motion to the body corporate, obliges the body corporate to consider having the

scheme’s CSLE revert back to the pre-adjustment order figures. This process will only be

available until 14 April 2014.



If a change is made to the CSLE the amount you pay for body corporate fees may be significantly

different than what is disclosed now. If you want advice on this issue please contact us.



9.3 Review of Caretaking and Letting Agreements



We do not undertake a review of the caretaking and letting agreements for the scheme on your behalf as

this is not included in the scope of our retainer. If you would like us to review those agreements and

provide a summary to you then you should telephone us immediately.



If you are purchasing as an investment and will be relying on the income from the letting arrangements

then, preferably before you sign the contract, but if not, then before settlement, we recommend that you

instruct us to review the letting arrangements that apply to your lot and advise you of the foreseeable

legal risks arising from the transaction.



There are many possible letting arrangements that may apply to your lot. Below is a list of documents

that may exist and may apply to your lot:-



(a) a product disclosure statement under the Corporations Act 2001 issued by the letting manager;



(b) a caretaking and letting agreement entered into by the body corporate with the manager;



(c) an agreement appointing a letting agent for your lot;



(d) a tenancy agreement or lease between you and any tenant of the lot;



(e) a leaseback agreement with the seller; or



(f) a rental guarantee offered by the seller.



If you have been given any of these documents we recommend that you should send them to us for

review. The review of the documents listed above is not included in the scope of our retainer and will be

an additional cost to you.



In reviewing any of the above documents that apply to your lot we will not be providing financial or

commercial advice about the viability of the lot as an investment. Our advice will be limited to the

associated legal risks, for example matters such as:-



(g) costs associated with the entry into the investment, including commissions, entry fees, furniture;





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(h) costs associated with exiting the investment including penalties;



(i) the terms and option periods of any leaseback to the seller or letting agent;



(j) legal risks which could impact on the income stream from the property, such as default by the

seller or third party under the leaseback, possibility of insolvency, default under any rental

guarantees, the lack of a guarantee, the adequacy of the guarantees;



(k) the need to protect you from risks of default by the seller or a third party;



(l) the need to protect yourself from future interest rate rises over the period of the investment;



(m) the practical difficulties of renegotiating leases after the expiry of the leaseback arrangement;

and



(n) any restrictions on the use of the unit for residential purposes if you wish to cease the

investment at some stage.



For commercial advice you should seek the advice of a qualified accountant or financial advisor.



If you would like us to review any of the above documents that apply to your lot you should telephone us

immediately.



9.4 Body Corporate matters



The contract requires the seller to notify you of any notices of body corporate meetings or any resolutions

passed at a body corporate meeting after the contract date.



If you are materially prejudiced by any resolutions passed after the contract date which are not disclosed

in the contract, you may be able to terminate the contract.



If you are notified of or become aware of a body corporate meeting proposed to be, or actually held after

the contract date you should contact us.









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