A common conveyancing question we receive is “What comes with the property - and what doesn’t?”

Things that are physically bolted, concreted or nailed into a property are called fixtures. These include light fittings, carpets and tiles, curtains and blinds, TV wall brackets, shelving and any appliances built into the kitchen. These are sold with the property.

But if a fitting isn’t “fixed” to property - if you could easily unplug it and walk away with it, like a dishwasher or upright cooker stove - then these are not fixtures. The vendor could remove these items prior to settlement.

To remove any doubt, write the items sold with the land into the contract, next to the standard line about light fittings and floor coverings.

Other items to clarify are large outdoor pot plants, cubby houses, mirrors, garden sheds, pool equipment, BBQs, walk-in-robe shelving, solar panels and water tanks. If in any doubt, list the item in the contract.

24 August 2015

Business facebook page owners must closely monitor third party and user posts, promptly removing anything misleading or defamatory.

Allergy Pathway Pty Ltd learnt this expensive lesson in the Federal Court of Australia when it failed to remove false “testimonials” posted on its social media channels.

Use the privacy and security settings to control who can post on your facebook page. Requiring administrator approval for user posts is an easy way to control what is being uploaded onto a business facebook page.

Adopting the same policy with endorsements on LinkedIn is prudent - if it’s not true, quickly remove/decline it. Nobody wants to be a test case!

22 August 2015

The 2015 real estate season is about to kick off and you may be in the market to purchase a property, whether for yourself to live in or as an investment. Before you head out to an inspection next weekend, or sign a contract of sale, please keep the following list of tips in mind.

1. List all fixtures/extras in the contract. Anything not physically bolted down is considered a chattel, not a fixture, and could be removed by the vendor. To avoid any doubt, list removable items in the contract. These include dishwashers, free-standing ovens, pool equipment, mirrors, mantel pieces, garden sheds, pot plants and farm equipment. Vendors have been known to remove free-standing dishwashers and ovens before settlement. And be on the lookout for anything you might be buying with the property which is not particularly desirable. I recently reviewed a contract where a daggy sofa bed located in an attic-style room was included in the sale, probably because it was almost physically impossible to remove it!

2. Read the Owners Corporation rules. Owners Corporations, or Body Corporates, own and manage the common property in subdivisions. Each owner pays a contribution to the maintenance of the common property and shared services provided to the owners, such as gardening and caretaking. Some large apartment developments have more than one Owners Corporation, especially where there are carparks, gyms and swimming pools. Every Owners Corporation has rules; if they don’t make their own rules the default legislative rules apply. Always carefully read through the OC rules in the contract, to see if they are something you or your tenant could live with. Last week I read a set of rules that prohibited any pets, no exceptions. Other rules state a limit on the number of pets and even the weight of dogs!

3. Be careful with off-the-plan purchases. Even though the real estate agent may say the building will be finished next year, the contract could actually allow for five years until completion. If you sign it, you’re stuck with it. Remember that you have limited control over fixtures and fittings: aim to specify as much as possible in the contract. The vendor usually has the right to substitute fittings for similar brands and quality, so it’s important to list benchmark brand names. The vendor can also generally make minor variations to your apartment, such as reducing the size by a few square metres. This is risky for one-bedroom apartments: if they are too small, you may struggle to obtain finance. Check with your lender before signing any contract.

4. Be wary of finance on solar panels, newly-renovated kitchens and new swimming pools and spas.  These could have been obtained by the vendor on finance or a hire-purchase arrangement. The vendor may not necessarily own them and this will need to be covered off in the contract of sale, particularly in relation to the Personal Property Securities Register, which is a national database of items secured by finance, including vehicles (but not real estate). The last thing you want is for a financier to be overlooked and then your solar panels are repossessed.

5. Consider obtaining building and pest inspections. Older period homes may have hidden issues with foundations and roofing, as well as termite infestation. Spending a few hundred dollars on a building and/or pest report could save you a fortune if you avoid buying an issue-plagued home. Blocks of flats built in the 60s and 70s will now (if they haven’t already) require their windows to be replaced due to rotting. Read the Owners Corporations Annual General Meeting minutes carefully to see if this has already occurred or is on the cards. Look at how much money the OC has in the bank. Will you be required to contribute to major capital works in the future? Look out for the condition of driveway concrete and stairwell carpets too.

Forewarned is forearmed!

Note: the above is general information and should not be considered as legal advice.

Kate Ashmor
25 January 2015

First published in Property Observer, 6 October 2014

Buying a property is one of the most important financial decisions you will ever make. It’s easy to get swept up in emotions when you think you’ve found “the one”, especially when you’re a first home buyer or you’ve been searching for ages. But it’s very important to carefully consider the legal and financial implications before you sign a contract. Thorough research could save you a fortune and ensure you avoid a serious mistake.

From the hundreds of real estate contracts I’ve read during my career, here are my top 5 tips legal tips to keep in mind when you’re considering a purchase:

1. Carefully inspect the property and check the condition of EVERYTHING before you sign the contract. A standard clause in the contract makes the vendor (or seller) only responsible for delivering the property to you at settlement in the condition it was on the day of sale, fair wear and tear excepted. So if the central heating wasn’t working on the day you signed the contract, bad luck. Turning on all appliances and checking all light fittings beforehand will give you an accurate picture of the state of the property; you may be able to negotiate on price if something like an oven or garage door isn’t working.

2. Understand the zoning of the land and how it may affect your use of the property. Beware of flood paths or special building overlays, especially if there is a basement car park involved. It is prudent not to purchase a lower basement level car park in a flood zone (keep in mind that some apartments are sold with particular car parks allocated). The zoning of the land can prevent commercial or business activities being conducted. If you’d like to run a business from home, whether it’s a professional service, childcare, wholesaling or anything else, always check if the planning scheme will allow it. You may require a permit or your proposed use may even be prohibited. Check with the local Council if you’re in any doubt.

3. Beware of water easements. It is illegal to build on top of water drains and sewerage pipes without the permission of the water company. Look carefully at the water easement plan in the contract. You will not be allowed to build anything, even a deck, on top of a water easement and even if permission is granted, the water company can destroy any structure if they need access - and you are solely responsible for the cost. Look out for garages, carports and decks on the property: could they be built over water easements? If so, has permission been given? If not, the Council and water company could come knocking in the future and you’ll be responsible, not the previous owner, unless you negotiate the wording of the contract.

4. Don’t be seduced by display units and rent guarantees. Spacious and well-lit display units are not a representation of your finished off-the-plan apartment. The fine print of the contract will make it very clear that you cannot rely on what you see in a display unit. Rather, carefully check the plans for your chosen apartment that are included in the contract. Use a tape measure to actually measure out the size of the apartment. How does it compare to your current home? What is the orientation of the apartment? Will it have enough natural light? North-facing properties are always preferable. And as for rent guarantees: these often aren’t worth the paper they’re written on. These guarantees are often provided by companies that are financially worthless or are wound up and closed by the time any purchaser may want to enforce a guarantee. Instead, do your homework about the rental market in the area. What rent could you achieve if all or most of the apartments in the building were all released onto the rental market at the same time? Always budget for conservative rent receipts.

5. Don’t rush, get advice and read the fine print. Resist any pressure from the real estate agent to quickly sign the contract. NEVER sign on the spot without getting advice – if possible, legal advice but at the very least advice from someone experienced in the property market. Remember that real estate agents are looking out for the vendor’s best interests, not yours. If it’s a private sale, take the contract home and ‘sleep on it’. If there’s an upcoming auction, request the contract at least a week in advance, to give you enough time to properly consider everything. Speak to your accountant and lender: can you afford it? Are there tax implications? READ THE FINE PRINT and never assume that it’s straight-forward. One hour of your life spent checking or consulting with a lawyer may save you an enormous amount of grief and money. Remember, buying a property is a life-changing decision.

Kate Ashmor
5 January 2015

Note: the above is general information and should not be considered as legal advice.

First published in Women’s Agenda, 24 July 2014