The Law Handbook 2024

558 Section 6: Houses, communities and the road 3 The property is held as tenants in common – each individual has an unequal share in the property (individual buyers can also choose who receives their share in their will); or 4 The property is held by an entity (e.g. a company or trust) in which the co-owners have an interest. The different manners of holding can be combined. For example, two couples purchase a holiday house together. Each couple holds a 50 per cent share jointly with their partner. These two 50 per cent shares are held as tenants in common with the other couple. This means that if one person died, their share of the property automatically passes to their partner, not to the other couple. Caveats As soon as the vendor accepts the buyer’s written offer, some buyers choose to lodge a caveat on the vendor’s title. This protects the buyer by preventing the vendor from dealing with the title except to complete the contract. Caveats must be lodged electronically via an electronic conveyancing platform, such as Property Exchange Australia PEXA ). Buyers need to engage a solicitor or conveyancer who is a PEXA subscriber to lodge a caveat on their behalf. This is an additional charge on top of the standard conveyancing fees. These caveats can be used in circumstances where the buyer wants to be sure their interests under the contract are protected (e.g. when the deposit is released early). If a buyer’s caveat is registered in the names of the buyers who are ultimately put on the title, this type of caveat generally automatically lapses when the transfer of land is lodged at settlement. Insurance In general, the risk of damage to a property remains with the vendor until settlement. However, it is prudent for the buyer to take out building insurance from the day the contract is signed. This is in case the vendor is underinsured, and because the buyer’s bank will want to see proof that the building is adequately insured. Buyers who are purchasing a property with common property should ensure that the common property and shared services are insured by the owners corporation; this includes a minimum of up to $20 million in public liability insurance. (See Chapter 6.5: Owners corporations.) Two-lot subdivisions and subdivisions without common property are exempt from the requirement for common property insurance (note that ‘accessory’ or carpark lots are not considered to be separate lots). Investigating the title Buyers should always examine the certificates that are commonly found in a vendor’s statement: • a planning certificate from the Victorian Govern­ ment Department of Planning or the local council; • a VicRoads certificate about plans to build or widen roads; • an information statement from the relevant water authority showing rates, usage charges, easements and other information; • a SRO certificate showing the taxable value, arrears of land tax, and land tax payable. Note that vendors of contracts signed after 1 January 2024 are not entitled to adjust land tax against a purchaser; • a land information certificate from the local council showing rates, road charges and other municipal records; • building approvals and notices from the local council (forms 2.10, 10 Building Regulations 2006 (Vic)); • an encumbrance certificate from the water authority showing unregistered encumbrances in its records (if applicable); • the building permits and any insurance for homes built or renovated in the previous seven years; and • an owners corporation certificate or prescribed information relating to the active owners corporation under the Owners Corporation Act 2006 (Vic) (if applicable). If any of the above certificates are not included in the vendor’s statement, the buyer should conduct their own search for these certificates. Certificates can be applied for online and fees are payable. Goods and Services Tax Overview The Goods and Services Tax ( GST ), effective from 1 July 2000, applies to certain types of property transactions. However, generally, GST does not apply to existing residential land sales and purchases.