PURCHASER CONTRACT PERUSAL, CHECK LIST & NOTES

1. TERMINOLOGY

   In different documents during the transaction you may be referred to as : the Purchaser, Buyer, Nominee, Applicant, Transferee, Mortgagor, Encumbrancer, Landlord, Lessor or the Insured Party.

2. COOLING OFF

   "Cooling Off" does not apply to a purchase at or after a public auction; and in a few other cases.

   The Vendor cannot cool off – only you, the Purchaser.

   Where the right to cool off applies, it must be done in writing within two (2) business days of you and the Vendor signing the Contract AND you receiving a copy of a Form 1 (sometimes called 'the cooling off form').

   If you wish to cool off on a purchase, please contact our office immediately.

3. GST

   Is the contract expressed to be inclusive or exclusive of GST or is there no mention of GST? Previously occupied residential property is almost always GST exempt. However, for a potential extra 10% on top of the purchase price, it is worth getting absolute certainty on your purchase!

   It should be noted that all newly subdivided vacant land, all newly constructed property, commercial properties, farm land property, etc. can be and usually are, chargeable with GST where the Vendor is registered for GST purposes.

   If you, the Purchaser (or the purchasing entity – e.g. a company or trust) are GST registered and there is GST payable (either included or in addition to the purchase price), and it is calculated using the "Margin Scheme" be aware that the GST cannot be claimed back as an input tax credit.

4. STAMP DUTY AND OTHER SETTLEMENT COSTS

   Unfortunately, the actual cost of buying a property is usually about 5.7% higher than the actual purchase price. The main additional cost is stamp duty, which is usually just less than 4%.

   Substantial concessions are available to "off the plan" purchases in some areas of Adelaide.

   Other costs you should allow for, are the Lands Titles Office registration of transfer fee, insurances, loan costs and removalists (where applicable), an adjustment for your share of the current year's rates and taxes, and most importantly, our fees!

5. FLEXIBILITY OF SETTLEMENT DATE & "OFF THE PLAN" PURCHASES

   If the purchase is "off the plan" or part of any other building or subdivision that is yet to be finalised, how critical is the settlement date to you?

   These types of projects often run months overdue. Be prepared for delays.

   Have a contingency plan in place for where you can live and bear in mind you can probably do nothing about the delays.

6. VACANT POSSESSION OR TENANCIES

   It is absolutely critical if you are buying a dwelling and require vacant possession for your own use, and where there is a tenant currently renting the property; that the terms reflect your need for:

   1. vacant possession,
   2. that the tenant will completely vacate, &
   3. a right for a final inspection prior to the agreed Settlement Date.

   There should also be a Special Condition added that the Vendor is to serve the required notice to vacate, upon the tenant, at the Vendor's expense within seven days of the day of sale.

   The settlement date should be at least 70 days or 90 days (not less as the case may be).

7. FINANCE

   Especially for auctions where you will always buy on a "cash unconditional" obligation to complete settlement, it is absolutely essential that you already have the funds which you may need to borrow pre-approved, or at the very least, organised with a lender with whom you have an established relationship. It is essential that you realise whenever buying without the protection of a "subject to finance" clause, that you are legally obliged to complete settlement even if you cannot obtain the loan funds you rely upon.

8. EASEMENTS

   Contained within the Form 1, you should have been provided with a copy of the Certificate of Title containing a copy of the plan of the land which you are considering purchasing. If an area is ruled off with a dotted line and marked "A, B, or E (T/F)" etc., it is most likely an indication that services (such as pipes, electricity cables etc usually laid underground) exist along that boundary. The usual situation is that these areas cannot be built over with any "permanent" structure. It is also advisable to avoid the planting of large trees and shrubs in these areas.

   If buying an existing property, you should check that no such structures are already over the land described as easement.

   Please speak to us if you require further clarification of easements and your obligations of owning land that is subject to an easement.

9. PROPERTY SUBJECT TO A BODY CORPORATE

   In a nutshell, the operation of a body corporate has both advantages and disadvantages in that:

   1. certain costs are shared creating less of a financial burden per owner,
   2. the body corporate will exercise some control over the activity of the owners of the surrounding properties in terms of appearance of the properties and behaviour on site, and
   3. those very same controls also restrict things that you may wish to do.

   Common examples of things you generally can not do without the consent of the body corporate, are the keeping of pets within the group, changes to the external appearance of your property, structural changes internally or externally etc.

   We regard it as absolutely essential that you request the real estate agent to supply you with the statutory search of the body corporate (called a Strata or Community Search) and that you have thoroughly read it (and contacted the secretary or manager of the body corporate if you have any queries) before committing to the purchase the property.

   You should be very clear about any known liabilities of the group which will have to be paid for by owners; for example, major structural problems, major maintenance items etc. You should also confirm how much money is held by the body corporate and what future charges are likely to be raised against the owners.

10. CARE OF THE PROPERTY UNTIL SETTLEMENT

    It is a generally accepted principle that the property must be substantially in the same condition at the date of Settlement as it is on the day of sale.

    As there is often some delay between these two dates, i.e. at least 30 or more days, it is often very difficult to recall the exact condition of every aspect. We recommend that you take as many notes as possible on the condition of the property and you may even wish to consider taking photographs or a video to assist you in remembering the condition of the property at the day of sale.

    Please note, fair wear and tear is allowable.

11. BUILDING INSPECTIONS AND TERMITE INSPECTIONS

    If you are reading this, you have obviously taken the trouble to consult us prior to signing a contract to check out the full contractual, legal and financial rights and obligations under the contract.

    However, you may wish to obtain a detailed building inspection to identify any physical defects (if any). Always ask, if the inspector has insurance cover before instructing them. Some inspectors will also perform a basic termite inspection, although in many cases they recommend you get a separate contractor specifically in the area of pest control.

    If you wish to book a building inspection, and you do not already know a building inspector, there are many listed in the Yellow Pages. However, you may wish to ask us, as we have a few "on our books" with whom we and our clients have had satisfactory dealings in the past.

12. SMOKE ALARMS AND SWIMMING POOLS

    Every dwelling must have a suitable number of smoke alarms. The battery operated type are allowable if the Vendor purchased the property before 1st February 1999. We strongly recommend installing "hard wired" and preferably interconnected smoke alarms.

    Swimming pools and some spas, must be adequately fenced and have a suitable gate. These guidelines are legislated by state law and administered by the relevant local council. Please contact this office for further details of these obligations.

13. USE OF "AND/OR NOMINEE"

    If you intend to own the property in any name or entity (e.g. a company or trust) which is different from that shown on the contract, please discuss with us, to prepare additional required documentation.

14. PAYMENT OF DEPOSIT

    Auction - payable upon signing of the contract, but not by personal cheque.

    All other circumstances - payable AFTER your Cooling Off Rights have expired.

    Normally the Agent would provide Account details for an EFT.

15. INSURANCE

    Most Contracts of Sale in South Australia provide that the property is at the risk of the Purchaser from acceptance of the Contract. If the property was damaged before settlement, any claim would initially be against your insurance cover. However, this does not apply if the property is subject to a Body Corporate and the Body Corporate holds a complying single insurance policy for all buildings on the total site. Insurance details should be disclosed in the Form 1 - see Item 8 above. If borrowing funds, your Lender would require a Certificate of Currency, with the Lender noted as 1st Mortgagee, BEFORE they will complete Settlement.

16. BUYER'S ADVOCATES / BUYER'S AGENTS

    If any (or all!) of the above sounds all too daunting, please ask us questions, or alternatively, you may wish to appoint a "Buyer's Agent" to bid at an auction for you, or negotiate specific terms of the contract.

    Remember that a Buyer's Agent looks after your interests as Purchaser; the real estate agent is appointed by, and acts for the Vendor.

Information in this Purchaser Check List & Notes is general in nature.

Please consult with us for your specific circumstances and questions.