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Understanding your Vendor Statement

Published: 14 October 2019
Written by burstonline
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Categories: Buying, Contract Review, First Home

Also known as a Section 32, a Vendor Statement includes all of the information that you need to know about the property you are buying or selling.

Why is it called a Section 32?

A Vendor Statement is also called a Section 32 simply because it is included in Section 32 of the Sale of Land Act. In accordance with this section, A Vendor must give to a purchaser (before they sign the contract of sale) a statement signed by the Vendor that complies with Section 32.

Understanding your Vendor Statement

If you are following along with a Vendor Statement for a property you are interested in purchasing, this is what you are likely to find.

Vendor Statement Cover/Signing Page

Most Vendor Statements follow a very similar structure. They typically begin with a cover sheet that is signed by the Vendor who by signing confirms that the information in the following pages is correct.

Register Search Statement

If you’re looking for a certificate of title in the vendor statement then you’re likely to be disappointed. Proof of ownership in property is more often included in the Register Search Statement which will give you some important basic information about the property.

For a detailed explanation of a Register Search Statement, please click here

Plan of Subdivision

The Plan of Subdivision can differ depending on the age of the property you are purchasing. Older properties can have a very dated looking Plan of Subdivision, whilst new developments are now prepared using digital drawing software.

If you are purchasing in a high rise development, the Plan of Subdivision will include every level of the property and could extend to a number of pages.

For a detailed explanation of a Plan of Subdivision, please click here

Land Tax Statement

The Land Tax Statement is prepared by the State Revenue Office and will provide details of any current land tax that is owing or due to be paid on the property.

For a detailed explanation of a Land Tax Statement, please click here

Owners Corporation Search

There are usually two components to owners corporation information in a Vendor Statement.

If you are purchasing in developments with common property then there will be an owners corporation governing the owners of those properties. The first thing is to check the Owners Corporation search which will tell you a) if there is an Owners Corporation and b) who they are.

The next document will be an Owners Corporation Certificate which will include the Owners Corporation Rules, minutes from the last meeting of the Owner Corporation members and a certificate detailing the rates, whether they are up to date and other important you need to know before becoming a member.

For a detailed explanation of an Owners Corporation search and Owners Corporation Certificate, please click here

Water Rates Certificate/Notice

Your Water Rates Certificate/Notice will contain the current water charges for the property, including the usage for water and sewerage. This document will let you know if the current owner has paid their water bills and allow your lawyer to prepare adjustments on those amounts accordingly.

For a detailed explanation of a Water Rates Certificate/Notice, please click here

Council Rates Certificate/Notice

Your Council Rates Notice is also known as a ‘Land Information Certificate’. This will contain the current council charges for the property, including your rates. This document will let you know if the current owner has paid their council rates (and if there are any arrears) and allow your lawyer to prepare adjustments on those amounts accordingly.

For a detailed explanation of a Council Rates Certificate/Notice, please click here

Planning Property Report

A Planning Property Report provides important information on the overlays and zones that impact the property. This document contains information on whether the property is a bushfire zone and the different planning overlays that will impact the works that can be completed on the property in the future.

For a detailed explanation of a Planning Property Report, please click here

Do You Qualify For The First Home Buyers Exemption, Concession or Reduction?

Published: 30 September 2019
Written by burstonline
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Categories: Buying, First Home

The major difference between the First Home Buyers Grant (FHOG) and the First Home Buyers Exemption, Concession or Reduction is how you receive assistance from the government.

The First Home Owners Grant gives you money ($10,000 in metropolitan areas and $20,000 in regional Victoria) to build or buy your first home.

The First Home Buyers Exemption, Concession or Reduction is often incorrectly referred to as a ‘grant’ when really it is an exemption or concession from paying all of the stamp duty you would usually pay on the property.

The amount of duty you pay is either an exemption from paying any stamp duty or a concession (to pay less) based on the price of the property.

NOTE: It is important to remember that you can be eligible for both the FHOG and the First Home Buyers Exemption. You don’t have to choose between one or the other.

How do I know if I’m eligible for the First Home Buyer Exemption, Concession or Reduction?

Let’s take a look at the criteria. If you would like to know more, click here for a link to the State Revenue Office website.

  1. You must have entered into a contract of sale to buy your first home on or after 1 July 2017.
  2. Your home has a dutiable value of $600,000 or less to receive the First Home Buyer Duty Exemption or $600,001 to $750,000 to receive the First Home Buyer Duty Concession.
  3. All the purchasers of the property must meet the First Home Owner Grant eligibility criteria
  4. At least one purchaser must satisfy the residency requirement

Click here for more information on the First Home Buyer Grant eligibility criteria or click here to head to the State Revenue Office (SRO) FHOG page.

Do You Qualify For The First Home Owners Grant (FHOG)?

Published: 30 September 2019
Written by burstonline
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Categories: Buying, First Home

The $10,000 First Home Owners Grant (FHOG) is available to eligible purchasers when they buy or build their first new home. The grant is boosted to $20,000 for eligible first home owners buying in regional Victoria.

There are essentially two steps to obtaining the First Home Owners Grant, the property you are purchasing must be eligible and you personally must be eligible to receive the grant.

How do I know if the property I am looking to purchase is eligible?

  1. To be eligible for the First Home Owners Grant your first home can be a house, townhouse or apartment, unit or similar valued at $750,000 or less.
  2. It must be the first sale of the property as a residential premises
  3. Home must be less than 5 years old

How do I know if I am eligible for the First Home Owners Grant?

Some of the questions the State Revenue Office will ask include

  1. Will the home be in Victoria? The property must be in Victoria.
  2. Will there be more than one applicant for the Grant?
  3. Will the applicant(s) both be a person? This means that each of the applicants must be an individual person, not a separate legal entity like a company or a trust.
  4. Will the applicant be at least 18 years of age at settlement or completion of construction?
  5. Will the applicant be an Australian Citizen or permanent resident?
  6. Will the applicant have a spouse or partner? If you have a spouse or partner, you will have to answer if they have received a first home owner grant in any other state or territory of Australia. If they have already received a First Home Owners Grant then you will be ineligible.
  7. Has the spouse or partner ever had a relevant interest in residential property? A relevant interest is someone with a legal entitlement to the property being purchased or built. Each person with a relevant interest must be listed as an applicant for the grant.
  8. Will the applicant be an owner builder? An owner builder is an owner of land who builds a home without entering into a comprehensive home building contract.
  9. Will the applicant move into the home within 12 months of its completion and live there for at least 12 months?
  10. Will the property be in regional Victoria with a contract signed on or after 1 July 2017?

The State Revenue Office has a tool you can use to determine whether you are eligible for the First Home Owners Grant. Click here to take a look.

For more information on the First Home Owners stamp duty exemption or concession click here.

5 People You Will Meet At An Auction…And How To Beat Them!

Published: 26 September 2019
Written by burstonline
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Categories: Buying, First Home

When it comes to an auction you better know the character you are playing. That’s right, it’s not enough to turn up and hope for the best. If you want to be the highest bidder when the final hammer falls you need to understand who you are bidding against.

3 Tips Before Heading to Open For Inspections

Published: 20 September 2019
Written by burstonline
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Categories: Buying, First Home

We’ve been there before. It’s Saturday morning, you’re at an open for inspection eyeing off every other person looking at the property you’re quickly falling in love with.

The real estate agent tells you that there is ‘plenty of interest in this one’ and that they ‘have a couple of people interested but no one has signed a contract yet’. Are you prepared to make an offer on the spot?

How do you prepare yourself before heading to an open for inspection? Your Property Australia shows you how.

Print out your YPA Inspection Form

This is the biggest single financial investment of your life, so you best be getting serious about it.

Start off by downloading the Your Property Australia Inspection Form. Chances are you will be looking at 5-6 properties on a weekend. This will allow you to write down key information about your favourite properties to review at the end of the day.

The YPA Inspection Form is an interactive PDF meaning you can insert information before you go (if you are super organised) or fill it in when you arrive. At the end of the day you will have a list of the properties you’ve visited, what you liked and what you didn’t.

Download here.

Broken toilet. Let’s get a plumber. Busted air conditioner. Let’s get it fixed before settlement. You can then hand this list across to your YPA lawyer who can use it to understand your purchase and any special conditions that might need to be drafted.

Get on the phone to Your Property Australia. Now.

If you think that this property is too good to be true then call Your Property Australia straight away. A Contract Review can usually be completed within a handful of hours, allowing you to have the confidence to put in an offer before the weekend is finished.

Make sure you have your finance sorted BEFORE you sign a Contract of Sale

‘Subject to Finance’ is the Shania Twain of Contracts of Sale. As our favourite country singer used to say ‘that don’t impress me much’. No one is getting excited about a conditional offer. Real estate agents aren’t getting paid their commission to bring vendors conditional offers. They want to seal the deal. Now.

Make sure you have your finance sorted BEFORE you sign a Contract of Sale so that you can make an offer with confidence and without the purchase being ‘subject to finance’.

3 Ways To Help Your Children Into Their First Home

Published: 18 September 2019
Written by burstonline
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Categories: First Home

If you thought that your pre-retirement years were going to be filled with more golf and long lunches then think again!

Current property prices in Melbourne are out of the financial reach of many young homebuyers. Parents are increasingly having to step in to help their children afford their first home.

We take a look at three ways to help your children into their first home, whilst also protecting your own financial security.

PROVIDE A LOAN

Whilst not every family is in the position to offer straight cash towards a first home purchase, it is crucial to ensure that the parties understand the terms upon which the money is being given.

  • Is it a gift or is the purchaser expected to repay the money in the future?
  • Will interest be charged on the money borrowed?
  • What happens if the property is sold in the future? 

A carefully drafted loan agreement between parents and the borrower(s) will ensure that at the outset both parties know what they are getting into and help to guide them if there are disputes in the future. 

ACT AS A GUARANTOR

A parent may be in a position to act as a guarantor; agreeing to fulfill the obligations of the borrower if they are unable to make their repayments.

This ‘ties’ the parent to the transaction. It is an area that requires good communication between the borrower and guarantor because there is a huge burden on the parent if the borrower defaults.

Some of the common causes of tension that we see are guarantors objecting to the way borrowers are handling their day-to-day finances. When parents have ‘skin in the game’ all of a sudden they have a very real interest in making sure that there is money to pay the mortgage. 

If you are going to have a parent guarantor then the parties need to be clear how they are going to make their repayments.

In this situation spending habits become more scrutinised with things like overseas holidays, frivolous spending or even changes of career causing fights between the parties. The guarantor can be left feeling like the potential financial failure of the borrower leaves them in the firing line.

USE THEIR ASSETS AS SECURITY

Many parents have been able to pay off the family home before their child enters the property market. Particularly as first home buyers are now older because they need to save more for a home deposit.

An unencumbered title (usually a certificate of title that does not have a mortgage on it) can be used as a security for the mortgage taken out by their child.

Some parents are reluctant to put their family home on the line as a default by the borrower may result in the mortgagee ‘calling’ the security and selling it to recoup their money.

Whilst your here take a look at “Common mistakes when borrowing from your parents”. Click here to read more.

Contact the experienced lawyers at Your Property Australia to discuss how we can protect your security in retirement whilst getting your children into their first home.

Common Mistakes When Borrowing Money From Your Parents.

Published: 16 August 2019
Written by burstonline
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Categories: Buying, First Home

Family comes first. If your family has offered you money to purchase a property then keep reading to understand how to make sure it doesn’t cause huge problems in the future.

One of the biggest worries for first home buyers entering the market is finding a property that fits within their budget. It can be particularly difficult when purchasers want to stay near their family as the suburb they have been living in for decades has almost certainly skyrocketed in value.

Homebuyers find themselves priced out of the market and understandably stressed out. 

There are of course plenty of inner city options and new suburbs opening up on the outskirts of Melbourne, but for those who are lucky enough to have been offered some assistance from their family our concern is always ensuring that the help doesn’t cause tension between the family in the future. You might say ‘don’t be silly it will be fine’ but when money is involved tension inevitably follows. 

TALK ABOUT MONEY NOW. AVOID PROBLEMS LATER.

“She’ll be right” is not a solid foundation for loaning someone money. Tension and fighting is usually caused by miscommunication. One party doesn’t understand their role and their responsibilities in the property transaction.

WHO IS REALLY DREAMING OF OWNING PROPERTY?

Understanding the spending habits of the home buyer is essential for avoiding problems in the future. Remember that above all the ambition to own a home must be the home buyer themselves and not their parents.

If it’s the parents’ dream that their child own their own home but they want to go overseas for a year on holiday then there will be big problems.

Talk openly about the future with your children; they may have completely different ideas for their life. Of course there are always ways to make it work, including renting the house to help cover the mortgage before they are ready to settle down.

BUDGET.

Whether you’re a guarantor, loaning money or using the family home as security, once the property has settled you have a vested financial interest in its’ success.

Working through a budget with your children sounds so simple, but it will give you clarity on whether they can comfortably met their repayments in the future.

For more information on family and property, have a read of our recent article “3 ways to help your children into their first home”.

Click here for more.

The Difference Between Joint Proprietors and Tenants In Common

Published: 14 August 2019
Written by burstonline
No comments
Categories: Buying, First Home
  1. If the whole property is held equally between two parties then they are Joint Proprietors.
  2. When one of the Joint Proprietors dies, their share in the property passes to the other person.
  3. If the property is held in equal divisible shares then they are Tenants in Common in Equal Shares.
  4. If the property is held in different divisible shares then they are Tenants in Common in Unequal Shares.
  5. When one of the Tenants in Common dies, their share in the property is directed according to their will.

Every week we get questions from couples who simply have no idea how they will ‘own’ the property they are planning to purchase.

Most people assume that they are splitting ownership 50-50 and whilst that is usually the case, it is HOW that is represented on the certificate of title that can have a massive impact on your future.

Principal Lawyer and Founder of Your Property Australia, Matthew Woods takes a look at the different types of property ownership.

JOINT PROPRIETORS

Joint Proprietors is the most common choice for most couples. With a vision to the future, purchasing a home together is one of the biggest financial decisions that a person can make.

The intention of the parties is that if something was to happen to them (in other words if they die) their partner would become the sole proprietor of the property. 

The best way to think of Joint Proprietors is that you both own the property jointly but your interest isn’t divisible. It isn’t a simple process to sell it off. You both own the whole property together. 

Now wait a second! I’ve only been with my partner for a couple of years and I want my share of the property to go to my family. How can I make that happen?

TENANTS IN COMMON IN EQUAL SHARES

Obviously not every property transaction involves a couple or a family and there are many situations where it would completely inappropriate to have the other party take full ownership of the property when the other party dies. 

Tenants in common in equal shares is a smart choice for new couples who would like some security surrounding their purchase. Unlike joint proprietors, tenants in common in equal shares is treated by the law as the purchasers having clear, divisible interests. In this case each party owns a 1 of 2 share or 50%. It can be sold and is easily transferred.

TENANTS IN COMMON IN UNEQUAL SHARES

Not everyone wants to split the ownership of their property evenly. If you have contributed an equal share of the deposit and will both contribute evenly to the mortgage repayments then an equal share of the property is usually the way to go. 

There may be situations where it is appropriate for the contribution of both parties to the purchase price to be represented in the overall ownership of the property.

Understanding how you own your property with your partner is vitally important for any prospective homeowner. Of course this article is also applicable to family or friends purchasing together. 

Click here to read the Your Property Australia list of questions you should be asking before purchasing with another person.