We have outlined some key considerations for buyers and sellers undertaking a property settlement, including things your settlement agent will need to be made aware of in order to facilitate the settlement.
Your rights
You Settlement agent is obliged to act in your best interests at all times. These rights are detailed in the Appointment of Settlement Agent form your settlement agent will get you to sign.
Your obligations
You have an obligation to tell your settlement agent about anything you think may affect your interests in this transaction. This is especially important where your settlement agent prepares information on your behalf, which you think is incorrect.
General
You need to sign documents and attend to requests from your settlement agent as early as possible. You need to take action concerning any Special Conditions that apply to the transaction. Make sure that the deposit is made by the due date. If your not going to be available in the period leading up to settlement, you need to inform your settlement agent so that they can ensure all documents required are signed.
Finance
If you require finance to purchase the property, you need to take immediate steps to obtain finance. You need to attend to any request by your financier to sign documents as soon as possible to help avoid delays. Once you have accepted a Finance approval letter you need to inform your settlement agent as soon as possible. You need to arrange with your financier to sign the Mortgage documents at least 1 week before the settlement date. If your using a Mortgage broker contact your broker to make those arrangements. The Lender will advise you of any application, mortgage preparation fees or Stamp Duty which are payable in respect of the mortgage. The Lenders fees and disbursements won’t be included in the Settlement Statement you receive from us.
Documentation and Settlement Statement
Most transfers in WA are required to be made electronically. With an Electronic settlement your settlement agent will sign the Transfer of Land document on your behalf. Your settlement agent will send you a Preliminary Settlement statement which will apportion the current rates and taxes for the property and includes any amount held in our Trust accounts pending settlement. If you receive any accounts for rates from either the Water Corporation or the Local Government Authority soon after the settlement date, please contact your settlement agent before making payment, as these accounts may already have been paid following settlement.
Rate and service enquiries
Your Settlement agent will make enquiries to the Water Corporation, the local council and the Office of State Revenue to identify the current or outstanding rates to apportion the amounts payable for the year between the buyer and seller at settlement.
Building licenses
In many dwellings and Structures build before 1990, records are not easily obtained and further fees and extended time periods to apply to obtain the same from the Local Government Authority. Where you consider a patio, shed, games room or extension of a building was possibly erected after the main dwelling was build, you should query this with the sellers Real Estate agent to inquire with the seller. If the seller was the owner of the property at the time the structures were built, they may have retained the approvals thus reducing time and money required to obtain this information.
Sewer lines
If the property isn’t connected to sewerage then in certain circumstances it may be the sellers responsibility to connect to the sewer line either within 1 year of the date of settlement or within 5 years of the Water Corporation issuing a notice to you to connect to sewerage.
Septic tanks
Under the Health Act, if the property you’re purchasing is connected to a sewer and septic tanks are still on the property and have not been decommissioned, then within 60 days of settlement, you must de-commission any septic tanks on the property. De-commissioning is done by:
1. Emptying the tank by a person licensed to do so.
2. Either removing the tank, or if that is not practical, breaking up the base of the tank.
3. Back-filling the tank with clear fill and compacting.
Home indemnity insurance
If a building license was issued after 1 February 1997 for a dwelling or for substantial improvements of a value of $12,000.00 or more, the builder (including an owner builder) must have home indemnity insurance for the work. From 1 July 2007 the $12,000 value limit was raised to $20,000. You will need details of the insurance in the event you need to make a claim for structural defects within the period of insurance. If you believe this applies in your situation, please contact us so that we can attempt to obtain the necessary details.
Owner Builders aren’t required to take out Home indemnity insurance before they can build or undertake substantial improvements that must do so if they sell the property within 7 years of obtaining an owner builder license from the local authority.
An owner builder is not permitted to sell the property within 3 years of obtaining their owner builder License without receiving permission from the Minister of Fair Trading, through DOCEP.
Strata title properties
If the property you’re buying is a Strata Titled property, the Strata Titles Act states that you must receive a Disclosure Statement either prior to or at the time of, making your offer to purchase the property. If you have not yet received the required disclosure information, the law gives you rights to avoid the contract.
Inspection of the property
Your Contract gives you the right to a final inspection of the property on 1 occasion within 5 business days before the Settlement date or Possession date. You should contact the Sellers Real Estate agent and make arrangements to inspect the property to ensure that its in the same condition as when you made your offer to purchase it. If your contract has a condition which states that certain items are to be in working order at settlement or if it states that repairs are to be carried out by the Seller, you will need to check that these have been attended to satisfactorily and that the items mentioned are in fact working.
Keys
We will notify you once settlement has taken place, at which time you should contact the real estate agent concerned to arrange to collect the keys and any other security devices to the property. If the property is the Sellers normal place of residence, the Seller is entitled to stay in possession, ie. Occupy the property, until 12:00 noon on the following settlement. That provision is intended to allow adequate time for the Seller to vacate the property.
After settlement
If a Mortgage is to be registered on the property by your Lender, the Certificate of title will be held by the lender as security for the loan. If you’re paying cash for the property, you will forward the Certificate of Title to you by registered mail once it has issued back from the Department of Land information. If you wish to collect the Certificate of Title from our Office, please advise us and we will contact you once it has issued back. We recommend that you make arrangements for safe keeping of the Certificate of Title since it can be different and expensive to replace. You might, for example wish to make arrangements for the Title to be held in a safe custody packet with your Bank.