What Are Adjustments?
One of the most common questions we have from new clients is ‘can you tell me how much this property is going to cost me?’ It’s a fair question, but often it is not until the day before settlement when we have the final answer.
This isn’t because of any issues on the purchaser or the vendor’s side of the transaction but rather that the final figures are not calculated until a couple of days before settlement.
Adjustments are the way that we ensure that the purchaser and vendor have paid for exactly what they owe and will owe when the property is settled. Remember that council rates, water rates, land tax and owners corporation fees are not charged on the day of settlement, they are annual, half-yearly or quarterly charges.
Why is it important?
It is important that each party only pays for the time they use the property. This is where adjustments come in, we use them to ensure that the vendor pays for their time in the property and is up to date with their payments and the purchaser starts to pay what they owe as soon as they move into the property.
Let’s take a quick look at what is ‘adjusted’ at settlement. Of course not every item of adjustment will apply to your property.
- Council Rates
- Water Rates
- Land Tax
- Owners Corporation Fees
- Rent (if the property has a residential or commercial tenant and is subject to lease)
Who prepares the adjustments?
Typically it will be the Purchaser’s responsibility to prepare the adjustments. In the case of Off the Plan property, the Vendor may prepare the adjustments because they are settling so many lots at the same time. To have multiple outside parties (purchasers) prepare them would require too much number checking. This saves time.
Why are certificates so expensive?
This is a common source of frustration and to be honest we don’t really understand it either. Certificates for council rates, water rates and owners corporation fees are expensive. Owners corporation certificates are incredibly expensive for what they tell you, but unfortunately this is not in our control. Your Property Australia simply pay for the certificates up front to get the work done and then pass on that cost to you as a disbursement.
For more information on property certificates and the information they contain please click below
Register Statement Search/Plan of Subdivision
Owners Corporation Certificates