What is a property settlement?

Property settlement is the process of transferring a property title from a seller to a buyer, subject to the conditions of the standard property settlement agreement contract for the sale, be fulfilled. Usually conducted by your settlement agent.

In most instances before a property settlement can occur, both the buyer and the seller must have signed a contract of sale.

In Western Australia, the standard residential sales contract has two sections:

• Contract for Sale of Land or Strata Title by Offer and Acceptance (the O & A); and
• Joint Form of General Conditions for the Sale of Land (General Conditions).

The signatures of the seller and the buyer on the Offer & Acceptance generally indicate that both parties agree to the conditions of the contract, including the purchase price.

Property Settlement Agreement

At settlement, the settlement agents or solicitors representing the seller and the buyer will meet at the office of the buyer’s mortgagee (financial institution) or at Landgate.

These representatives ensure:

• all relevant parties have fulfilled their obligations in the lead up to settlement;
• all conditions of the O & A have been met, to the satisfaction of the seller and the buyerbuyer.

At settlement, the balance of the purchase price will be handed over to the seller’s representative. The buyer’s representative will ensure that documents are registered so that the title reflects a change of ownership.

The settlement agents or solicitors will inform the seller, buyer and real estate agents that settlement has been completed. The keys will be handed to the buyer when settlement is complete.

Once settlement takes place, the seller is generally required to give the buyer vacant possession of the property – that is, the property should not be occupied.

Before the buyer takes possession of the property, the seller must remove all vehicles, rubbish and chattels, other than the chattels sold with the property such as dishwashers or light fittings.

So there we have it, a simplified outline of the settlement procedure.

Engage a conveyancer to take the worry out of the settlement process. Your settlement agent can talk you through the finer details and intricacies of the settlement process. Giving you, the client, an insight to what is involved to complete a settlement on time with no errors.

For property settlement solutions: Supreme Settlements is the team to take you to Settlement.

Purchasers of new residential property to pay GST directly to ATO from 1 July 2018

The Australian Government has amended legislation to require buyers of new residential premises and new subdivisions of potential residential land to withhold the GST component of the purchase price, and to pay that amount straight to the Australian Tax Office (ATO) on settlement.

For every residential contract entered into from 1 July 2018, every seller of residential real estate must advise the buyer whether the sale is of a “new residential premises” or a “potential residential land”, as defined in the A New Tax System (Goods and Services Tax) Act 1999.

From 1 July 2018, purchasers of new residential premises or potential residential land are required to withhold an amount of the contract price, and pay this directly to the ATO as part of the settlement process.

Announced as part of last year’s Federal Budget, this reform is designed to improve the integrity of GST on property transactions.

This change takes effect on 1 July 2018, however the Government have announced it will introduce a transitional arrangement to this budget measure, which will exclude contracts signed before 1 July 2018, as long as the transaction settles before 1 July 2020.

Essentially, the new obligations require:

1. the Sellers of all residential premises or potential residential land to notify the Buyer whether the Buyer will be required to withhold the required GST amount from the settlement proceeds and to pay this amount to the Australian Taxation Office (“ATO”); and

2. the Buyers of new residential premises or potential residential land to lodge two separate online forms with the ATO and to ensure that the required GST amount is withheld from the settlement proceeds and paid to the ATO.

Contracts for the sale of residential premises or potential residential land entered into after 1 July 2018 should include appropriate provisions dealing with these obligations.

Buyers must withhold the GST amount that is deemed to apply, and pay this directly to the ATO on or before the settlement date (or another time determined by legislative instrument) rather than the seller. They must give notice of the intended payment to the ATO at least five days before they are required to make the payment.

Buyers should ensure that they are aware of, and comply with, their withholding obligations, whether or not those are described in the contract.

This withholding mechanism changes the process for the collection of the GST. It doesn’t, though, change who is liable for the GST–the seller–but it does create new obligations for buyers, sellers and their respective representatives.

The new laws don’t make the transfer of land conditional on payment of the withholding amount but, in practice, settlement is unlikely to proceed until the seller is satisfied that the withholding amount will be paid to the ATO by the purchaser.

Supreme Settlements, your friendly settlement agent, conveyancer, can provide you with more detailed information and advice on the sale and purchase of your property.

Settlement Agents do charge fees and getting a quote from a Settlement Agent is probably the best advice.

We all know that buying a home involves a big financial outlay. So if we can save even just a little, we are in front. 

We also know that we can choose our own settlement agent, and choosing your own settlement agent can be a wise decision.

Settlement Agents do charge fees. After all, they do all the essential running around to ensure your property… becomes your property. They do need to get paid for their professionalism, efficiency, and research undertakings.  

The settlement agent fee is the amount you pay your settlement agent for their work with regard to the settlement of a property you are buying or selling, and they can vary from conveyancer to conveyancer.

Some settlement agents may charge a fixed fee. Others may charge based on the value of the transaction. It is important to remember no two settlements are ever the same. Often issues can unexpectedly arise in the course of settlement, and in these cases, additional fees may apply.

As there is no regulated settlement agent fee, a settlement agent must provide you with a written quote setting out the maximum amount they will be charging for their services, before you sign the appointment to act.

The maximum amount must include all fees, government charges and general office disbursements payable for the settlement agent’s service.

When you have 2 or 3 quotes from settlement agents, you are better prepared to choose your settlement agent. Keep in mind your settlement agent will be along for the ride of your life in the process of securing your new home. Choose wisely, and choose a settlement agent that you feel comfortable chatting too.

Supreme Settlements is here to help and offer advice, so why not call us today, or request a quote online to purchase, or to sell your home or property.

Let us be the one, out of the three you choose, to take you home.

There are several reasons for identity verification.

How easy is it to steal your home without identity verification?

Apparently its not that difficult to steal a home with a little know-how, and boldness.

When your settlement agent asks you for identity verification it is with good reason.

We have all heard of identity theft and probably laughed it off as “it will never happen to me”. But do you know where your personal information is stored? Is it safe?

Much of your personal information now resides on dozens, if not hundreds of servers across the globe, many now in ‘cloud storage’, e.g. MyGov, drivers license, passport, bank accounts, your work uses the cloud to store information, etc. Even your mobile phone apps are storing information about you in various places around the globe.

How protective are you of your identity?

Ask yourself, did you totally destroy that electricity or water bill, or did you just throw it in the bin (name, address, with account details)? After you paid your phone bill did you destroy the invoice (name, address, with account details)? When did you last change your password on your computer / email / Facebook / twitter etc.? For many of us the answer is “Not recently!”

In 2017 1 in 3 Australian Adults Fell Victim to Cybercrime

Six million Australians have been the victim of Cybercrime in Australia throughout 2017, constituting a 13 percent increase from 2016 with a total of $2.3 Billion Dollars lost to thieves. This upward trend in cybercrime is the result of an ever increasingly connected world, a world in which cybersecurity has not been able to keep pace

In the US it has risen to 16.7 million in 2017. The cost of all of that lost data amounts to over nearly $17 billion. For 2017 and 2018, identity theft statistics have taken center stage among the many stats and facts encompassing the entire realm of cybercrime.

So how safe is your identity today? A question perhaps we all need to consider.

Historically identity theft has been viewed to be someone accessing your bank accounts, using your credit card or taking out loans in your name – all without your permission.

In the age of technology it extends further and we’ve seen a rise in people impersonating others on social media and online forums, with an intention to cause harm and often leading to emotional scars or even worse consequences

It has gotten to the point where even your home is not safe.

How then does identity theft affect your property?

• Fraudsters assume false identities so that they can pass themselves off as landowners. This enables them to offer the land as security for a loan, or to sell it to a third party, and then pocket the cash and disappear.
• The prevalence of identity theft has led the Registrar of Titles and the Commissioner of Titles to recommend a new standard to verify the identity of persons transacting in land.
• Verifying the identity of the person claiming to be the owner of a property, who has the authority to sell that property, is a crucial step in the land transaction process.
• The Verification of Identity Practice aims to minimise the risk of land related fraud including identity theft and other improper dealings. It introduces a new, more robust standard for confirming identity that is specific for land transactions.

What do I do?

The most effective way to minimise the risk of land related fraud is for verification of identity to occur when a person decides to sell their property and before financial settlement.

The Practice recommends that conveyancers, settlement agents and other property professionals take reasonable steps to verify the identity of their clients and confirm their clients’ authority to give instructions when dealing with a particular property.

Under the Practice, if a person is outside of Australia, the verification of identity and the witnessing of land documents should be conducted by an Australian Consular Officer

A licensed settlement agent or lawyer is responsible for identity verifying their client

A Bite Of Identity Verification Reality

There are some easy safety measures you can take to better protect yourself. Athough these also come with ultimate restrictions/sacrifices:

Use the highest privacy settings on social media. Limit personal information shared. Don’t accept ‘friend’ requests from people you don’t know;

• How many of you have limited your Facebook (any social media) friendships? Or have you just be-friended anybody and everybody.

Avoid using public computers or wireless hot spots for personal affairs;

• When you walk into a supermarket have you set your phone to automatically connect with the free wifi.

Ensure your computer’s security and virus software are up to date;

• When was the last time you updated your computers, even your phones, security and virus software?

Don’t provide your personal details in person. Never over the phone. Definitely not by internet or by email. First verify the identity of the person and organisation requesting it. Ask for their privacy policy (particularly if the call or email is unexpected – like informing you of a lotto win or that you are a beneficiary in a will);

• How easy is it to just answer questions over the phone to a person you do not know. I’m sure we’ve all done it at some time.

Don’t save passwords in your phone or in writing at home, and use strong passwords unlike your children’s names, dates of birth or addresses;

• If I didn’t write down my passwords with all those silly non meaningful characters of which I have several, I would never remember them.

Destroy any personal documents you no longer require and secure those you need.

• Destroy personal documents means burn them – shredding just requires time and sticky tape to put them back together.

Identity theft is real!

Don’t ignore it.

Don’t get caught out!

If you have any concerns talk with your settlement agent right away.

What is a secure online property exchange that removes the need to physically attend settlement? 

Electronic conveyancing or e-Conveyancing is the term used for transactions and settlements conducted electronically.

PEXA stands for Property Exchange Australia. PEXA is Australia’s online property exchange network and enables users to lodge documents and complete financial settlements electronically.

 The company that provides the electronic platform used for e-Conveyancing and the electronic platform system itself is called PEXA.

How does it work?

Documentation is scanned and uploaded to PEXA by your settlement agent.

What does it do?

The PEXA system automatically checks that online documents have been correctly filled in.

Is it checked?

Settlement agents and financial institution staff sign the documents once they are satisfied, thereby confirming settlement can proceed.

Is it fast?

Settlement occurs online and can be completed from 9am (whereas a manual settlement cannot start before 11am).

From 1 May 2018, all settlements in Perth and throughout Western Australia will have to be lodged electronically using PEXA.

Can we PEXA today?

Yes, you can! Call us today for more information.

Have you ever thought about buying a block of vacant land?

Purchasing your own piece of land gives you an opportunity to create your dream. But with every dream comes a little reality.

There are 2 sections on the standard contract for the transfer of property,

• Contract for the Sale of Land by Offer and Acceptance (the “O&A”). The O&A is a contract that requires the parties to insert information that is specific to the transaction, such as the description of the block and the agreed purchase price. It also allows agreed special conditions that meet the needs of both the buyer and seller to be inserted. and

• Joint Form of General Conditions for the Sale of Land (the “General Conditions”) The General Conditions cover important contractual obligations for both the buyer and seller, and are not usually varied by sellers or buyers.

How does this effect you?

Vacant Land plots come in all sizes and shapes, with various services.

You will find vacant land house lots in residential subdivisions with water and electricity services ready to be connected. Even NBN or optic fibre for the internet may be available.

You may want to share a large house block sub-division creating two or more smaller house lots in an established community.

Are you a looking for a small acreage on the outer of a rural town with some amenities eg. electricity would be nice and maybe a garbage collection service to boot.

Larger more outback style parcel of land which may only have limited services like phone.

Today it is becoming more popular to buy an established house and land closer to the city and demolish the house to build anew.

You may prefer to buy vacant land and have a home built to your design and requirements. This often means buying a block released for sale in a new housing estate or sub-division.

Buying land gives you the flexibility to Design and Build your own Home, specific to your needs.

When buying newly released land, your settlement agent can check with the local council and the Department of Planning for details of facilities and amenities planned for the area such as schools, shops, parks, etc, as well as details of any restrictions on building on the property.  Also ask if there are any future road works or other public works planned for the area, such as highways, power lines, transformers or other utilities.

All Property has a Shape

The shape of the land and it features will present challenges for the size and design of your home. You will need to carefully evaluate how this will impact the design and cost of construction.

Is your land wet, sand, or rock based? The type of soil that your property is situated on can incur extra costs for earthworks and land retention, you may need the soil classified according to Australian Standards.

Are you looking at a hillside or cliff top property. The steepness of the land must also be considered since steeper land is likely to be more costly to build on.

What about low land.  Blocks that lie beneath the level of the road may present a problem with water runoff in stormy weather.

What utilities are available. Contact utility companies to check the cost of connecting your block of land to water, gas and electricity if the service connections are not included.

Site costs are the expenses you will have to meet to have the block prepared for the foundations of the house or other buildings. The nature of the house and the characteristics of the land determine site costs. Before you buy your block it is a good idea to get a quote for site costs for the style and size of the house you are planning to build. Generally, the blocks of land with the lowest site costs are those that are flat and have sandy soil. Rocky land with steep slopes tends to have high site costs.

If possible, obtain a quote from the builder for site costs before making an offer to buy.

Energy efficiency these days is more prevalent. A north facing alignment can maximise the amount of sunlight received during winter and minimise sunlight exposure during the warmer months. Your future home will be naturally warmer in the winter and a lot cooler in the summer, and in turn, you will be saving money on heating and air-conditioning costs.

Don’t forget the trees. Trees are a natural wonderful feature of your property, they provide shade and life. There may be restrictions on removing trees so do check before it happens – it could prove an expensive mistake.

Everything comes back to location, location, location

Your ideal location may be land close to services such as shops, parks, and schools. This can save you travel time and expenses. But then if you don’t want the noise of suburbia a better location might not offer your ideal piece of land or even desired price, but can still be worth it for peace of mind.

It is always important to check if your chosen area is prone to natural disasters such as earthquakes, floods, bushfire, or even cyclones.  Areas near rivers may be subject to flooding. This can place restrictions on the type of house you can build. Extra costs may be incurred to build an elevated house and build special foundations to meet the building standards for flood-prone areas.

If your land is situated near the bush or dry grass areas the risk of a bushfire occurring can be greater. Contacting the local council and asking will identify if bushfire construction codes have to be complied with. This could be an additional cost to your land.

The local council can advise you if the land is subject to a ‘building envelope’. A building envelope is of particular relevance in semi-rural subdivisions where house construction may only be possible within a certain area of the block.

In the northern parts of Australia, you are at a significant risk of experiencing cyclones. There are construction standards that need to be met. Cyclones can also cause flash flooding so you will need to be prepared for all eventualities if you build there.

Council or state government planning controls will influence your dreams. You will need to find out about required setback from boundaries, shadow rules, height restrictions, floor space ratios, open space requirements, and minimum block size (if you want to consider future sub-division opportunities).

Is your building design impacted by heritage area requirements?

There may be restrictions, known as encumbrances, which could hamper the future use of the land. It is a good idea to check for any encumbrances through your settlement agent.  Encumbrances on vacant land may include:

• easements – for example, an adjoining landowner may have a particular right to cross the land; a sewerage or drainage line may have to pass through your land; and/or

• restrictive covenants -for example, there may be restrictions on using the land in a certain way, including restrictions on building heights or the use of certain building materials, boundary fences to be constructed to a particular standard

Buying a block of vacant land to suit your needs can be an exciting yet anxious time. Your settlement agent can do the checks and research to ensure you can have what you want.  Don’t get caught out.

As there are a number of important issues to consider when buying off-the-plan, it is important you refer to the Consumer Protection fact sheet Buying land or property off-the-plan.

Reference

Department of Commerce www.commerce.wa.gov.au

Landgate www.landgate.wa.gov.au

Supreme Settlements is here to help you make a successful move to your dream property. We can help you with the transfer of title and other aspects of the purchase or sale if you are looking to buying or selling a property.

Contact us today for guidance.

A strata title allows you to own part of a property be it an apartment or townhouse which also includes common property. Common property being driveways, gardens, foyers and the like.

 The strata title can be governed by various legal entities such as owners corporation, body corporate, strata company, or community association, and is dependent on your state or territory of residence.  

So any property that is adjoined in some way is normally purchased under strata title. As they share common areas such as roofs, lifts, gardens, driveways, etc. these common areas are maintained by all unit owners collectively. Expenses incurred are shared to maintain common areas.

 Living on shared property can offer a friendly community-style environment. It is however very different from when you live in a freestanding house. You will find some activities more limited. Parking your car or simple renovations may be restricted.

The owners in the strata scheme make up the owners corporation. There will also be an executive committee that makes certain decisions on its behalf.  A larger strata schemes may appoint a professional strata management firm for the purpose of assisting and overseeing the functions of the owners corporation.

 In most cases, you will own the inside of the unit/apartment but not the main structure of the building. Known as airspace, this includes the internal walls, floor coverings, and fixtures.

The business of the owners corporation looking after strata scheme is to administer funds for daily operational expenses and long-term future expenses.

 One of the benefits of owning a strata property is that you will pay lower council rates than a house owner.

 By-laws are rules that everyone who lives in a strata scheme must follow, including lot owners and tenants. By laws cover issues like safety and security measures, appearance of units, garbage disposal, cars and parking, and pets.

 It is a good idea before you buy a strata property, to review the accounts and records of the owners corporation. Ask about the maintenance of the building. Look for signs that may require you to spend your money sooner.

 The appearance of the property will tell you if the property is maintained as a whole.

 You can get an expert to prepare the report on your behalf, such as a specialist strata investigator or your conveyancer.

You should refer to the:

• Strata Titles Act 1985 (the Act) as amended; and

• Strata Titles General Regulations 1996 (STGR) as amended, for details.

• Landgate www.landgate.wa.gov.au

Supreme Settlements has the experience in strata-titled settlements and a slew of high-profile projects under our belt to perfectly supervise and project manage complicated strata settlements.

GST Withholding

The Turnbull Government has successfully passed legislation to clamp down on GST evasion in the property development sector.

From 1 July 2018, the tax law will require purchasers of new residential premises and new residential subdivisions to withhold the GST on the purchase price at settlement and pay it directly to the Australian Taxation Office (ATO).

“This measure targets illegal phoenix activity in the property development sector. It puts an end to the problem of some developers collecting GST on new properties but then dissolving their business to avoid remitting the tax when it is owed to the ATO,” the Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP said.

“The new arrangements will increase compliance with tax law, level the playing field for compliant businesses, and secure GST revenue for the states and territories to provide essential services that Australians rely on.”

The new laws that take effect on 1 July 2018 will require buyers of new residential premises and new residential subdivisions to withhold a prescribed amount at settlement and remit this amount to the ATO. The amount remitted will be then applied as a credit against the sellers GST obligations in respect of the transaction. For the majority of contracts the new GST laws will only apply to contracts entered into on or after 1 July 2018.

Prior to 30 June 2018 GST laws require the purchaser to pay the GST to the seller at settlement. The seller is then responsible for paying the GST to the ATO when they lodge their BAS. And this is where phoenixing occurs by the seller pocketing the GST collected from the buyer then liquidating their business prior to lodging their BAS.

The new measure stops this phoenixing activity by requiring the buyer to pay the GST direct to the ATO instead of paying it to the seller.

The best advice, the simplest advice, is to talk to your settlement agent and get the correct information that relates to your purchase or sale of property.

Previously

When do I get my money when they sell my property?

The buyer’s bank will hand over a bank cheque at settlement, which usually takes 3 days to clear in your account. If both parties agree to complete the settlement using Electronic Conveyancing then the sale funds will be electronically deposited to your account and you will be able to draw on them immediately.

Will the property or carpet be cleaned by the Seller?

No, there is no legal obligation for the Seller to clean the property or have the carpets cleaned. If you require PROFESSIONAL CLEANING we suggest you write a “Special Condition” into the contract stating as such..

What is the process for settlements?

Arrange for the title to be searched and further investigate any encumbrances such as restrictive covenants, easements, caveats etc, in order that they may be removed upon settlement or the new owner advised of their existence and how they affect the land.

Prepare all necessary documentation for you to sign, including a settlement statement that will either apportion current rates and taxes or include an amount to be held in trust pending receipt of the relevant accounts and attend to the stamping of the land transfer.

Liaise with your bank providing finance for your purchase or inform your bank of the sale of your home and request they prepare the discharge of mortgage for settlement.

Follow up on all special conditions relating to the offer and acceptance to ensure conditions are met and continually follow up all those involved in the settlement to avoid delays.

Arrange and attend settlement and exchanging documents and disbursing funds in accordance with your instructions and ensuring that the documents are registered with the Land Titles Office.

We advise your Real Estate Agent as soon as settlement has gone through in order that the keys may be handed over. We also keep you informed at all times of the progress of the settlement.

*Also refer to our website – downloads – A guide to real estate purchase; A guide to real estate sale, Settlement Flowchart for Purchasers and Sellers.

What if there are issues with the building inspection?

Speak to the real estate agent about your concerns. Be aware that the wording of the building inspection report condition in the contract is crucial in deciding whether the Seller is liable to rectify any of your concerns. The most commonly used conditions only state that the Seller is liable to rectify “structural defects” only.

How to can I be protected in buying and selling a property?

By obtaining legal advice on the contract before signing it?? Taking out Title Insurance