Private Real Estate


Selling Residential Property in Victoria
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Introduction
The following checklist is provided in order to be a broad guide to those who are seeking to either sell real property Victoria.
For the sake of simplicity these checklists are set out in point form and are designed to provide a number of steps which can be followed in chronological order to achieve the desired result.
Please note that the following checklists are only guides and should not be relied on in every circumstance. Purchasers and Vendors are strongly advised to seek professional advice and assistance before entering into any transaction which involves the conveyance or leasing of real property or a business.
Selling Real Property (Land)
Information contained in the following checklist has been compiled from pieces of legislation that covers dealing with real property in Victoria.
It is written to advise the vendor (seller of the property) on what procedures need to be complied with:
1.	Do your own research. Follow sale prices in your area and get a sense of how marketable your property will be. Visit auctions of comparable properties.
2.	Once your property is listed to be sold it is required by law that you prove that your title to the property is good. This is done by providing purchasers with a vendor's statement.
3.	Vendor's statements are usually drafted by solicitors and must be given to all potential buyers at an auction or to a buyer in a private sale, before they sign the contract of sale. A vendor's statement must contain the following information:
	(a)	Your name and address.
	(b)	Details of any easements, covenants or other restrictions (eg caveats) on the property - whether they appear on the title or not. Easements and covenants refer to proprietary rights of other people (eg neighbours) may hold over your land and are typified by right of ways and restrictions on building over certain heights. Caveats are notices that can be lodge on your certificate of title, indicating that another person has an equitable interest in your property.
	(c)	Whether there is access to the land from a road.
	(d)	Whether the zoning restricts the use of the land.
	(e)	Details of any existing mortgage (whether it is registered or not). A registered mortgage will be mentioned on the title. Mortgages only have to be disclosed on the vendor's statement if they are not going to be paid off by the time the purchaser takes possession of the property.
	(f)	The services that are available to the land. This includes water, electricity, gas, sewerage and telephone. Sometimes the services are not connected but are available.
	(g)	Whether there are any outstanding notices or orders in relation to the land at the time of the sale. This might include fences, sewerage, roads and are usually issued by the local council. Other certificates from Melbourne Water, Vicroads, the State Revenue Office and other government agencies may also be required.
	(h)	Whether any building permits have been issued in the last 7 years and if they have, details about guarantees and insurance.
	(i)	If you are an owner-builder - a building inspection report must be provided together with details about guarantees and insurance.
	(j)	What rates, land tax and other charges apply to the property.
	(k)	A copy of the certificate of title.
		It is vital that this statement is accurate as discrepancies between a vendor's statement and the final contract of sale, may delay the sale and stop you from getting your money. It may also lead to you having to pay the purchaser compensation or if extreme enough may allow the purchaser to rescind the contract. If any such problems arise a solicitor should be contacted immediately.
4.	Once a purchaser has been provided with a vendor's statement and are still interested, a contract can be drafted to convey the land. Again it is preferable that you engage a solicitor to prepare such a contract to ensure that all the terms you desire are included in the contract.
	Two main types of contracts are used in relation to land, a Contract of Sale and a Contract Note. In either case, the agreement should always include:
	(a)	the name and address of the parties.
	(b)	The vendor's statement must be attached.
	(c)	A space that allows the chattels to be listed and whether they are or are not included in the sale. Chattels are things not attached to the house like curtains.
	(d)	A period of 21 days in which the purchaser can make a series on requisitions on title.
	(e)	The purchase price, which is divided into the deposit and the balance. The deposit is usually 10% of the purchase price.
	(f)	If applicable the contract should contain a clause whether the sale is subject to any pre-existing leases between yourself and any tenants (see section below on dealing with tenants once the lessor sells their interests in a property).
	(g)	Additional clauses can also be inserted in relation to the payment method, what will happen if payment is late or if the property is damaged prior to settlement.
	(h)	Almost any matter the parties feel is important can be negotiated and included.
		Once happy both parties need to sign the contract and have it witnessed by their solicitors or other interested person. Each party retains a copy of the contract they sign.
5.	Purchaser pays the deposit. Deposits are usually paid to your solicitor who will hold it on trust until settlement. It is possible for you to ask the buyer to authorise the solicitor to release the deposit before settlement. However, to do this you must provide them with information about any mortgages or caveats that affect the land and the contract must not prohibit the early payment of the deposit.
6.	After the Contract of Sale or Contract Note has been signed the purchaser has the option, under limited circumstances to withdraw from the contract over a 3 day cooling off period. Although, this only applies when:
	(a)	The buyer notifies you in writing within 3 clear business days after the contract is signed that they intend to renege on the purchase. The 3 days begin at midnight of the day the buyer signed the Contract of Sale or Contract Note and includes the next three days, but does not include a Saturday, Sunday or public holiday.
	(b)	There is a private sale, not an auction.
	(c)	It is domestic property, not being used for commercial or agricultural purposes.
	(d)	The house/land costs $250,000 or less.
		It does not apply if the buyer consulted a solicitor before signing the contract. To cancel the buyer can write a letter to you saying that they intend to exercise their rights under the Sales of Land Act to end the contract.
		If the buyer does elect to cancel the contract, they have no right to reclaim their entire deposit. You can keep $100 or 0.2% of the purchase price, depending whichever is more.
7.	For 21 days after the Contract was signed, the purchaser will have an opportunity to make some requisitions on title. These are questions the purchaser can ask about the property. If the purchaser takes more than 21 days to send their requisitions you are under no obligation to respond and are entitled to assume that everything with the property is satisfactory.
	In Victoria there is no limit on how long you can take to answer their requisitions on title. However it is recommended you respond in a reasonable time before settlement, so the purchaser has an opportunity to respond. Similarly, although you are only obligated to make sure the purchaser receives a satisfactory title at settlement, any answer cannot be misleading as it may allow them to rescind the contract.
8.	Contracts are exchanged. After the purchaser has signed your contract, you exchange your signed copy with their signed copy. The exchange can take place in person or by mail.
9.	You should then receive a Transfer of Land Document prepared by the purchaser's solicitor. This document tells the Land Titles Office to change the registered ownership of the property into the purchaser's name. You should sign, but not date it, as it will only be handed over at settlement.
10.	The statement of adjustment. The purchase price of the property then needs to be adjusted to allow for expenses associated with the property that have been paid in advance or are owing at settlement.
	Adjustments are necessary because rates are charged over a 12 month period, and the sale of property will take place at some time during that 12 months. It would thus be unfair if you have to pay for rates and charges that apply to the period after the property is sold.
	It is the responsibility of the purchaser to calculate and to provide you with a Statement of Adjustments.
11.	Discharging any outstanding mortgages. You must give a clear title at settlement. So it is your responsibility to make sure that any mortgages are paid out and removed from the title.
	You or your solicitor should contact the bank or lending institution that holds the mortgage. Once they know what the settlement date is, they will tell you what the final payout figure for the mortgage is. The purchase money is used to pay off the mortgage, and you can retain any remaining amounts, subject to any fees you may have to pay your solicitor.
	A document, called a discharge of mortgage needs to be handed over to the purchaser at settlement and is then lodged at the Land Titles Office.
12.	Settlement. This is the climax of the conveyance. All of the parties and banks meet together and exchange the documents and cheques that complete the sale of the property.
	The purchaser must receive the Transfer of Land document and a Stamp Duty Declaration. In return you must receive the full purchase price, unless otherwise agreed.
	The Stamp Duty Declaration needs to be lodged with the State Revenue Office and includes the Contract of Sale to ensure that all relevant stamp duty is paid. This declaration needs to be witnessed by an appropriate person.
13.	After settlement both parties are required to notify the Land Tax Office, the local council and any rating authorities. Once the transfer is registered, the sale is complete and the purchaser for all effective purposes is the new owner of the property and is responsible for all actions forthwith.



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