The Law Handbook 2024

Chapter 6.2: Buying or selling a house 553 – check the distance from the land to the street corner (or the ‘connecting point’) shown on the plan, to ensure that the land inspected is the same as the land in the title (note that your ability to object to a title based on minor discrepancies in the dimensions of the land may be restricted under a standard contract); • you have checked whether you are required to install child-proof locks and barriers that comply with Australian standards for any swimming pool or spa on the property; • you have checked with the local council that the swimming pool or spa has been registered with the council and that the pool or spa fencing is compliant (and the vendor has a compliance certificate if required); • you have checked with the local council to ensure that the land can be used in the way you intend; • you have checked the land for contaminants by engaging an environment consultant, if you are concerned about the potential for contamination resulting from past uses or activities, or you will be using a groundwater bore, or there are signs of potential contamination in the soil, or for any other reason; • you have checked the area’s planning permits (at www.planningalerts.org.au) and considered if these will affect your amenity or privacy; and • any conversations you have had with the estate agent about early access to the property, certain goods coming with the property or other special conditions are written into the contract. The documents you are required to sign immediately on purchasing the property are the contract of sale and the vendor’s statement. Do not sign any other documents without independent legal advice. Section 27 statement At the time the buyer signs the contract of sale, it is common for the vendor or their agent to present a section 27 statement for the early release of the buyer’s deposit (pursuant to section 27 of the SL Act). This statement contains details of any mortgage or caveats over the property, which allows the buyer to make an educated decision about whether to consent to their deposit being released. Also, where a property is encumbered by a mortgage, the buyer has the right to request a letter from the lender stating the circumstances of the loan (e.g. the total amount owing and whether the borrower is in default). A section 27 statement can only be served on a buyer once the contract is unconditional, which means a vendor has to wait, for example, for any finance or building and pest inspection clauses to be satisfied or to expire. In certain circumstances, lawyers consider it safe for the buyer to consent to the vendor accessing the deposit before settlement. Most importantly, the vendor should have sufficient equity in the property to enable the mortgage to be discharged at settlement without relying on the deposit and they should not be in default of their mortgage (and the vendor agrees to not re-mortgage the property). ‘Sufficient equity’ is generally understood to mean that the total debts owing on the mortgage do not exceed 80 per cent of the purchase price. If a buyer agrees it is safe for the vendor to have early access to the deposit, they can sign the section 27 statement. Once this is done, whoever is holding the money in trust is authorised to release the deposit to the vendor (often less real estate agent fees and commission). If a buyer objects to their deposit being released early (and they need to state a valid reason for the objection), the vendor will not be able to access the deposit until settlement. If a buyer neither consents nor objects to the request, the deposit can be released to the vendor by the person holding it in their trust account 28 days after service of the section 27 statement on the buyer. A buyer has 28 days from receiving the section 27 statement to object to the early release of the deposit. It is permissible for an estate agent to provide the section 27 statement with the contract so that time begins to run from the signing of the contract. However, it is not permissible for an agent to ask a buyer to sign a section 27 statement consenting to the release of the deposit at this time. This is because a buyer is entitled to have a reasonable opportunity to assess the information (or have their lawyer assess it). If you receive a section 27 statement, seek legal advice before signing it. If the agent gives it to you directly, ask for it to be forwarded to your conveyancer or conveyancing solicitor for their review. Inspecting the building The contract of sale may contain warranties about the quality of the building. The rule is still caveat emptor , meaning ‘let the buyer beware’. However, deliberately misleading statements made by the