Congratulations on finding your dream home! The whole purchasing, financing and transfer process can be confusing and daunting. As you figure out the buying process, you might encounter some unfamiliar legal terms. Understanding these terms is crucial for a smooth property transaction. Here's a helpful guide to the key terms every first-time buyer should know.
Throughout the transfer process, the conveyancer (the attorney responsible for helping to transfer the property into your name) will send weekly reports to the seller, the purchaser (you), and the agent. These updates will keep you informed about where you are in the process, allowing you to plan your move into your new home with confidence.
Key Terms Explained
Agreement of Sale: Also known as the Offer to Purchase, this is a legally binding contract signed by both the seller and purchaser. It outlines the agreed purchase price and any conditions that must be met.
Suspensive Condition: These are specific conditions outlined in the Offer to Purchase that must be fulfilled for the sale to proceed. Both parties need to ensure these conditions are met.
Addendum: A separate document that forms part of the Offer to Purchase, signed by both parties to amend certain conditions in the original contract.
Transfer Costs: The fees paid by the purchaser to the transferring attorney for processing the transfer of ownership.
Bond Registration Fees: These fees are paid to the attorneys handling the registration of the bond (mortgage) unless the property is purchased with cash.
Full Title: Ownership of the entire property, including the land and any buildings on it, such as vacant land, standalone houses, or small holdings.
Sectional Title Property: A property within a larger development, such as a unit in a complex. Owners share common property and are part of a body corporate.
Exclusive Use Area: A specific portion of a sectional title property, like a garage or garden, that the owner has the right to use exclusively, though they do not own it outright.
Immovable Property: The land and any structures permanently attached to it, such as a house.
Title Deed: The official document proving legal ownership of a property, including any conditions attached to it.
Deeds Office: The government department responsible for registering and maintaining property ownership records.
Lodgement: The process of submitting transfer and bond documents to the Deeds Office for registration, typically taking 7-10 working days.
COC (Electrical Compliance Certificate): A mandatory certificate issued by a registered electrician confirming that the property's electrical installation is safe and compliant with the law.
Occupation: The date on which the purchaser can officially move into the property, as specified in the Offer to Purchase.
Occupational Rent: The rent agreed upon in the Offer to Purchase, payable by the occupant to the registered owner before the transfer is finalised.
Guarantee: A formal document issued by the bank, confirming that the purchase price will be paid upon registration of the property.
Default: The failure of either party to meet their legal obligations as set out in the Offer to Purchase.
Patent Defects: Any visible flaws or defects in the property that can be easily seen.
Latent Defect:A hidden flaw or issue in the property that is not immediately obvious.
Rates Clearance Certificate: A certificate from the local authority confirming that the property's rates and taxes have been paid up to a specific date, allowing the transfer to proceed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.