What are Things You Should Consider Before a Buying a Duplex?
In this video, OMB Solicitors’ Partner & Accredited Property Law Specialist, Simon Bennett discusses the things that you should be considering prior to purchasing a duplex.
In this video, OMB Solicitors’ Partner & Accredited Property Law Specialist, Simon Bennett discusses the things that you should be considering prior to purchasing a duplex.
Luckily, there are a few simple ways to make the process a little bit easier. Here are five property buying tips that can help reduce the stress of the experience.
Perhaps the single most important step you can take to ensure a trouble-free property buying process is to enlist the help of qualified professionals. A banker, accountant or lender can determine how much you can afford to spend. A real estate agent can help you find a property in that price range. And a lawyer can help you avoid making costly mistakes by identifying issues including, but not limited to:
A lawyer well versed in commercial and residential real estate can also help you avoid potential pitfalls by reviewing any and all relevant documents before you sign them.
When buying a property, falling in love at first sight is not always a good thing. If anything, it can sometimes be counterproductive. This is because the actual purchase is strictly a business and financial transaction, and should be handled as such.
While it is important to keep this in mind throughout the process, it is especially important when you inspect the property. Remember, sellers will sometimes use ‘smoke and mirrors’ such as cosmetic upgrades to conceal serious structural deficiencies. Even something as simple as a fresh coat of paint can hide significant damage. Sometimes, the current owner is simply unaware of significant issues with the house. In either case, you should be careful to look beyond the aesthetics.
Once you’ve done your own inspection, hire a professional inspector, who will easily identify both minor and significant issues. If need be, you can get an architecture report, which will also identify any outstanding issues and save you money in the long run.
By their nature, real estate contracts are complex legal and financial documents. Even so, it is important that you read it thoroughly and ask your lawyer or other relevant professional about any aspects of the contract you don’t understand before you sign it.
By taking this simple step, you can easily identify potential issues that would otherwise be expensive or take a lot of time to address in the long run.
There’s nothing more aggravating than buying a property based on the assumption that you can make certain changes or use it in a certain way – only to find out afterwards that you can’t. That’s why it’s important to research (or have your lawyer research) any rules and regulations that dictate how the property can be used or changed. Examples include restrictive covenants or planning overlays.
Basically, there are three key issues at the crux of every residential and commercial real estate transaction:
Accurate valuation of the property is important because it affects all three of these issues. As the winning bidder at auction, or as a buyer who signed an unconditional contract, an accurate valuation ensures that you paid a fair price. On the other hand, an inaccurate valuation may cause you to pay more than what the property is really worth. And because nobody wants to do that, it’s advisable to use an accredited professional to ascertain an accurate valuation.
In summary, purchasing a property can be an overwhelming experience, especially if you are doing it for the first time. But it doesn’t have to be. You can make the process easier by consulting qualified professionals, approaching it rationally rather than emotionally, reading contracts carefully and asking plenty of questions before signing them. Identifying land use issues early on and enlisting the services of an accredited valuer are also important steps you can take to achieve peace of mind.
To learn more about how we can help you purchase a property, contact our Gold Coast lawyers today.
In any contractual negotiations, conducting due diligence to ascertain as much information on a property as possible is crucial. Here at OMB Solicitors, it is standard practice to include various searches in our conveyance of purchase matters. Where property is purchased for redevelopment however, we recommend to our clients that specific searches and additional expert advice is also sought. It is important that such information is gathered, so that any restrictions or issues with the property which may affect redevelopment are brought to light. Seeking review and recommendation from sources, including but not limited to, town planners, engineers and surveyors for example, allows purchasers to have the greatest understanding of the lengths and limitations a development project may encounter.
Another tool we suggest prospective developers consider is the Gold Coast City Council’s ‘City Plan‘. The City Plan outlines, maintains and protects the Gold Coast community’s intentions for future development. A crucial part of the City Plan which developers must consider is zoning. Zoning is the categorical assignment of areas around the Gold Coast into ‘zones’ which ultimately affect how land can be used and (re)developed. It is important that developers consider the zone property is located within so they are aware of the restrictions and requirements which may be enforced.
Not only should developers conduct such due diligence, they should also ensure that their contract provide allowances so this information can be sought prior to a developer being locked into a deal. Special Conditions can be included in contracts so that purchasers have time to conduct these investigations and terminate a contract without penalty in the event the due diligence does not stack up.
The inclusion of special conditions which stipulate the contract to be ‘subject to’ the satisfaction or undergoing of such searches or research should be a non-negotiable term of a contract if a developer is planning to redevelop a parcel of land. If these additions and changes are not made to contracts, purchasers may find themselves in breach where they have taken excess time to meet conditions, or unable to terminate a contract if the property can not be used as envisioned.
Redeveloping property can be a rewarding and exciting time for purchasers. It is important however, that due diligence is undertaken, and proper additions are made to contracts so that pitfalls can be avoided. Seeking expert advice is crucial to ensure that property can be developed as proposed. Ensuring that contracts reflect the intentions and expectations of both parties is also fundamental in achieving a successful outcome for all involved.
Contact Jessica Thomas today if you need any further advice on the preliminary actions that should be taken when redeveloping property, or if you would like to find out more about how contracts can be drafted to suit your redevelopment needs.
On face value, the notion of buying something you haven’t yet seen poses plenty of questions, but yet plenty of people will buy a property that hasn’t yet been built and the decision has been solely based on the planned construction. Is this approach riddled with legal risks? In this podcast, Gold Coast Lawyers at OMB Solicitors’ Cameron Marshall discusses the matter.
Dan: Cameron, is this a risky business?
Cameron: It can be, but as long as you do your inquiries and at the end of the day when the building is constructed you are happy with what’s been built as opposed to what you thought you were going to buy, it can all work out very well and very happy for everybody.
Dan: So, where is the starting point for somebody that’s you know, considering one of these buy off the plan proposals?
Cameron: Well the first thing you’d need to do is have a look at the plan and make sure you’re happy with what’s going to be built and then when you get to the end of the road and when it is built and you’re about to settle, you need to make sure that was what built was what you thought you were buying, so I’ve seen a lot of examples where people have got to the end of the day, ready for settlement and what is built is not what they thought they were indeed going to get. Possibly one balcony might be missing I’ve seen before and other examples are where a lot owner doesn’t even have access to their own property across common property, so they’re the little things that can come up.
Dan: Cameron. In your experience are there things that you see that quite often occur?
Cameron: The main things are the common property areas and their exclusive use of those areas. They’re often forgotten about or changed in the building process. It’s something that’s very important when you’re buying, especially a unit of the plan, so you need to make sure again what you’re buying at the end of the day is what you contracted to buy and if you haven’t, you need to speak to a solicitor about it.
Dan: Yeah, I was just going to say that. Is getting advice even prior to signing the paperwork a smart step?
Cameron: Oh yes, very much. Especially when you’ve got a large amount of disclosure that’s required in an off the plan construction contract, so you need to be fully aware of what can change and what can legally change through the process because the builder is allowed to make certain minor adjustments in the process themselves.
Dan: Cameron, thanks for joining me.
Cameron: Thank you very much.
A Caveat is a legal document registered on the Title of a property which generally prevents dealings with that property without the lodger’s consent. Once registered on Title, it acts as a warning or formal notice to advise the public that someone (the Lodger) has an interest in the land or property.
The most common query regarding a Caveat is can it be lodged to protect the recovery of the debt? The general answer is no. A Caveat can only be lodged when there is a “caveatable interest” and this generally means an equitable or legal interest in the land or a right, power, or privilege over the land which is the basis of the Caveat. There are a number of examples of this including an equitable mortgage, constructive trust or agreement which provides that a property is charged or encumbered with the repayment of a loan. These are just some of the examples that may constitute a caveatable interest; however, it is important to note that it is more than a mere claim for damages.
The Caveat, however, is a very powerful tool which prevents the party from dealing with their property and may heavily impact the owner of that property by preventing them from selling or mortgaging their property. As a result there is substantial liability which may be imposed on a person who lodges or continues with the caveat without reasonable grounds. In the event that another party suffers loss or damage as a result of that lodgement the lodger of the caveat may be liable for those damages or loss.
Any party wanting to lodge a Caveat should seek specialist legal advice and it should bear in mind that all times the potential liability that may attach if the grounds for lodging that Caveat are insufficient and the caveat causes loss or damage. The general rule for a caveat is that it will automatically lapse after a three-month period unless proceedings to support that Caveat are commenced. There are certain types of Caveat that will be non-lapsing however.
Simon Bennett of OMB Solicitors discusses the risks and opportunities.
Dan: Simon is all this glitz and glamour of living on the coast potentially at risk of not doing your due diligence?
Simon Bennett: I think that’s right. I think sometimes purchases of property on the Gold Coast get caught up in the excitement and the glitz and glamour and fail to probably undertake what I would consider basic due diligence when looking to purchase property. Now that could be split up. I think there are two real types of category of buyer. You’ve got your owner-occupiers, so someone who’s buying to actually live in the property. Then you’ve got an investor who is someone simply making a property investment. I think there’s really key characteristic differences between those two.
Dan: How should each of those cohorts look at the market?
Simon Bennett: Well an owner needs to look at livability. Am I going to be happy living there? They really need to pay attention when they’re buying into a body corporate about bylaws and rules because these are things that will govern how they can occupy that property. They really need to determine whether they’re going to be happy living there, as well as whether it’s a good commercial purchase. Where the investor on the other hand, really shouldn’t be looking at, do I like it? Does it feel good? It’s really a numbers game. How’s the return? What’s the likely capital growth? They need to be a little bit more removed from the feel, and as I said before, getting caught up so much in what they might like because they need to remember they’re not going to be living there.
Dan: Simon, for the owner I assume that really looking at the bylaws is going to be important, and maybe even so for the investor. Particularly if they’re looking at Airbnb and those other opportunities, but if we talk about the owner first up is what about the bylaws that they should be really analysing or wanting to understand?
Simon Bennett: Sure. Well the bylaws in really basic terms are set as the rules and regulations by which the owner or the occupier of a unit in a body corporate are governed by. Now these are designed to protect an owner, but they also restrict you. Now when I say they protect, what they do is, they govern all owners and say for example, you can’t change the external appearance of your unit. You can’t hang your washing out over your balcony, so that the view of the building doesn’t get the look of a slum or a building you might see in Hong Kong for example, whereby the washing is all hung out the side. That protects values, but it also restricts what you can do. Another common one is you can’t have loud late night parties, which restricts your use of your unit, but also it protects the general common ownership from being disturbed by other owners.
Dan: Simon, is there a divergence among what bylaws are from a complex to complex? I’m assuming that there may well be some that have very, very tight bylaws and others that are a little bit looser.
Simon Bennett: Yeah, that’s correct. It’s important to look at these if you have a specific concern. One of the most common ones we see is with pets. Now this is a really sensitive topic. Quite often a purchaser, or a potential purchaser in a complex, will not go ahead with a purchase if they can’t take their animals with them. It’s important to read those. Know what your specific requirements are if you are planning on letting, if you are planning on living there and taking animals et cetera. To check those bylaws have an experienced, qualified lawyer read through them, and point out what is important to you.
Dan: Okay. Let’s talk about the investor. There’s all this hullabaloo and excitement around Airbnb, and stories about people making thousands and thousands of dollars each week on their property. The investor that wants to buy, say, a unit at Surfers Paradise has got visions of being able to Airbnb it every night. What do they need to ensure is in those bylaws to allow them to do that without sort of running foul with the body corporate?
Simon Bennett: Sure. It’s important to read the bylaws and find out if there are any restrictions in the bylaws on short-term letting, then a qualified lawyer would need to look further beyond that and see whether that constitutes a valid bylaw or not. It may depend on what the original approval or the development approval was granted to that building for. If there were restrictions on what that building could be used for it would come back to town planning, but it is important as an investor to work out what you can and can’t do with it, not just with that letting process, but whether you’re going to put it with an onsite agent, whether there is an onsite letting agent, or whether you’re able to use a commercial letting agent maybe down the road.
Dan: Okay. Now in terms of the contract, or signing the contract, I mean it never ceases to amaze me how many people will go down and chase the cut-price conveyancing law firm to do their work. When in fact it’s a significant asset for many people. What are the risks of going down that path?
Simon Bennett: Yeah. Look, it amazes me as well. I quite often use the analogy of an individual who’s getting brain surgery doesn’t go out and find the cheapest brain surgeon. You generally want to find the best. For most people, buying a property of this nature is one of the biggest monetary financial transactions they will undertake in their life. They shouldn’t be looking at, necessarily, the cheapest option. They should be looking at getting really good value for their money. They should be looking at engaging an expert in that area. I am an accredited specialist by the Queensland Law Society in Property Law. That is an accreditation given by the Queensland Law Society saying that this person is an expert in that area. It’s really important because let’s get to the contract that you mentioned. Realistically, before you sign a contract you should give your solicitor an opportunity to peruse it for you.
Simon Bennett: As a general rule at OMB Solicitors we’re more than happy to look at our client’s contracts before they sign them, no obligation, and no charge. We would rather look at these contracts for our clients up front to say, “Yes, it’s all fine. You’re okay to sign it or gee, we really need to mend these clauses.” Quite often it’s something really technical. It may be the use of a simple word, may or must or something of that nature, that may need to be amended, but the ramifications are quite huge. What we say is before you execute your contracts, get them checked just for piece of mind. That way we don’t have to sort out problems later on.
Dan: Getting quality legal advice just makes common sense.
Simon Bennett: It does. I must say there is a misconception that you want to buy, I want to sell, straightforward it just happens and people go and put the importance on that transaction that they should. I can tell you this is that these transactions often have major problems, end up in court being litigated, and huge amounts of money are spent. The benefit of having an experienced practitioner looking after your matter is that they will have the experience to, not only deal with problems when they come up, but most often anticipate the problem before it becomes a major issue and cut it off at the pass, and things will run smoothly through.
Dan: Yeah. It’s very true isn’t it, I mean given that OMB Solicitors is a diverse practise law firm, you’ve got their back there should things go off track.
Simon Bennett: That’s right. Quite often throughout the course of a matter like this if we do have an issue I will go and consult with our specific body corporate team about body corporate issues, or I will go and discuss with our litigation team what if A, B, or C occurs how do we stand if that ended up in a court? We can use those other areas of expertise in the firm to assist the client quite informally before the problem arises.