What Should You Consider Before Buying Property?
Searches and Seller’s Disclosure Generally, the property is sold free from encumbrances except those disclosed in the Contract. In addition, there are certain statutory warranties that apply and the Seller may make certain warranties in the Contract regarding the Property’s condition. We will need to undertake various searches immediately following the establishment of the scheme […]
What Should You Consider Before Buying Property?
Searches and Seller’s Disclosure
Generally, the property is sold free from encumbrances except those disclosed in the Contract. In addition, there are certain statutory warranties that apply and the Seller may make certain warranties in the Contract regarding the Property’s condition.
We will need to undertake various searches immediately following the establishment of the scheme and registration of the plan creating the lot to establish whether the Seller has complied with its disclosure obligations and that the warranties are correct. In the event of any adverse results, we will advise what rights you have in relation to those matters. Unless you instruct us otherwise, we will undertake all necessary searches immediately following receipt of notice of registration, so that we can protect your interests.
Despite undertaking certain inquiries which may reveal adverse impacts on the Property, you will not always be able to terminate. If searches do reveal unsatisfactory results we suggest you instruct us to give you specific advice about your contractual rights and any remedies you may have. The advice will depend on the nature of the unsatisfactory search result and your particular Contract. For example, the discovery of unapproved structures, non-compliant swimming pool fencing, and flooding do not give you a right of termination or a right of compensation from the Seller. Despite this, searches are still undertaken so that you are well informed of the Property’s condition.
For residential units, the development will usually require approval for a material change of use.
Following construction, it is prudent to obtain a standard town planning certificate to confirm whether a material change of use approval was obtained and the terms of that approval. Our recommendation about a town planning certificate appears below.
Town Planning Certificates
There are three types of planning and development certificates that can be obtained from the local authority. The information these searches disclose and their relative cost is set out in the buyer’s Searches List:
- Limited Certificate – (Takes approximately 12 business days)
- Information as to the town plan area or zone in which the Property is located; and
- By reference to the plan, a description of the planning scheme provisions applying to the Property.
Limited certificates do not tell you whether the existing use is lawful or whether any conditions for the use of the Property have been complied with. This certificate reveals the designated zone of the land and any other restrictions on the use of land in the zone (e.g. if the Property is in a Demolition Control Precinct or subject to character housing or other development codes of general application to the area).
- Standard Certificate – (Takes approximately 12 business days)
- The same information as in a limited certificate; and
- A copy of every decision notice or negotiated decision notice for a development approval that has not lapsed, which has been issued by the local authority for the Property.
By looking at the existing use of the property, the local authority area or zone and the approvals obtained, it is possible to ascertain if the property is capable of being lawfully used for its existing use or for other uses.
The certificate does not identify compliance with any approval conditions.
- Full Certificate – (Takes approximately 30 business days)
- The same information in a limited certificate and standard certificate; and
- If there is currently in force for the Property a development approval containing conditions (including conditions about the carrying out of works or the payment of money), a statement about each condition’s fulfillment or non-fulfillment.
The full certificate is more expensive because a town planning officer from the local authority needs to inspect the Property and go through approval conditions to identify compliance and non-compliance.
Recommendation on Town Planning Certificates
- For a residential dwelling or vacant land, a limited certificate will generally be adequate unless you intend to develop the property when you may require a standard or full certificate;
- For residential units, the overall development must have been granted approval for a material change of use. It is prudent to obtain a standard certificate to confirm approval was obtained.
Despite the above, we still recommend you instruct us to obtain a standard certificate otherwise you may not be able to establish that the use is lawful. In addition, information about some local government charges that may apply to the Property (such as infrastructure charges) is only available by obtaining a standard (or a full) certificate. Local government approval for a change in use or a reconfiguration will often include conditions requiring the payment of charges for infrastructure use or upgrade. If the seller does not pay any relevant charges attaching to the Property, you may become responsible for their payment.
We recommend, at the very least, that you instruct us to obtain a limited certificate.
It is important to note that any development approval for the Property attaches to it and will bind the owner (and any occupier) of the Property. If you purchase the Property and there are outstanding obligations under a development approval, you may become liable to perform them and for any consequences of non-compliance (including prosecution for an offence).
The only sure way of knowing whether approval conditions have been complied with is to obtain a full certificate. Obtaining a full certificate is costly and takes considerable time (you may not necessarily receive the certificate by settlement even if ordered immediately). The certificate is legally binding on the council and the search may discover non-compliance issues that the other town planning certificates will not. If you intend to develop the Property or are particularly concerned with compliance with all approvals (and your settlement date is sufficiently far enough away to allow the results to be obtained in time) it can be beneficial. If you require a full certificate please contact us as soon as possible.
If you have any plans to change the present use of the Property or any building structures on it in the future, it is your responsibility to investigate what approvals you require from the local or other authorities. This is not part of our retainer.
The Environmental Protection Act 1994 (Qld) (“EPA”) requires that the Seller makes specific disclosure, before entering into the Contract, if any of the following are applicable to the land (including the common property if in a Community Titles Scheme):
- The land is listed on the Contaminated Land Register or Environmental Management Register;
- The land is the subject of an EPA notice or evaluation (generally about possible contamination or notifiable activities such as underground fuel storage); or
- A magistrate has issued an EPA order for an authorised person to enter the land to conduct an investigation or carry out work.
If any of these apply and the Seller does not give disclosure before you enter the Contract then, you may terminate before the earlier of settlement or possession. If the Seller has not complied with these disclosure obligations, the Seller may still give disclosure after the Contract has been entered into, but you will be given a period of 21 business days after disclosure to terminate the Contract. If you do not terminate in that time you will lose the right. Given the limited time period available for termination, it is important that you contact us promptly if you receive a notice from the Seller to remedy a failure to comply with its disclosure obligations.
If you terminate the Contract because of the Seller’s failure to make relevant disclosure, all money paid by you under the Contract must be refunded.
The searches we undertake only identify land on the Contaminated Land Register or the Environmental Management Register but not notices and orders. If you think the land may be contaminated, consider the prior or current use of the land might contribute to any contamination issues or any notices or orders that may affect the land, please contact us as soon as possible so that we can take the necessary steps.
Administrative advice may reveal interests on title impacting on the land that require disclosure by the Seller such as heritage listing or agreements, coastal protection notices, nature conservation orders, vegetation clearing offences, or Milton Brewery notices (for a lot in respect of a unit).
Administrative advice on title may note that the land is declared acquisition land under the Queensland Reconstruction Authority Act 2011 (Qld) and the following would apply:
- The owner is not able to sell the land other than to the authority; and
- If the owner does want to sell the land the authority must acquire it.
If coastal protection or tidal works notice is given under the Coastal Protection and Management Act 1995 (Qld), this should appear as administrative advice. If you buy land with this on the title, then the Contract may be of no effect unless the Seller has given you written advice of the undischarged notice not less than 14 days before settlement, or if settlement is less than 14 days after the Contract Date, at or before entering the Contract.
Your rights for any administrative advice, including termination rights, may depend on the administrative advice and the extent of disclosure.
Physical Limitations, Government Intervention and Operational Issues Affecting the Land
Unless you specifically instruct us to do so or unless the information is provided in the results from our standard searches, our retainer does not include advice about any of the following issues:
- Whether the land is subject to laws about acid sulfate soils;
- Whether there are agricultural land protection laws affecting the site or nearby land, air pollution;
- Animal conservation laws over the site including current or proposed future wildlife corridors;
- Bushfire control laws;
- Whether the site is subject to commonwealth government environmental laws;
- Laws about a potential acquisition of part or all of the site by government or quasi-government entities;
- Whether the site or nearby land is contaminated or potentially contaminated;
- The ability for the site to treat effluent;
- Impacts on the site from current or future extractive resource developments including existing or possible future road haul routes;
- Flooding from storm surge, overland flow, or other sources;
- Foul water drainage, stormwater drainage pipes, sewerage pipes whether existing or proposed;
- Whether you have any rights in negligence or contract or any other basis against an approving or acquiring authority;
- Service connections to the site by services such as sewerage, water, power, telephone, internet or gas;
- Whether the site is subject to land slip-on or steep slopes;
- Any laws relating to waste management and the use of the site for waste management activities;
- The availability of waste collection services for the site; or
- Watercourses and underground water sources on the site and their effect on the usability of the site.
If you have any particular concerns relating to any of these matters then you should contact us.
Unregistered encumbrances and other government rights or interests may affect the Property or the title such as:
- Unregistered water, sewerage or combine drains; or
- Access or extraction rights under the Greenhouse Gas Storage Act 2009 (Qld); Geothermal Energy Act 2010 (Qld) or the Petroleum and Gas (Production and Safety) Act 2004 (Qld).
The standard searches may not reveal all unregistered encumbrances or other rights or interests. Council rates searches often show sewerage or drainage lines through the Property.
If you have any concerns about unregistered encumbrances, please contact us as soon as possible.
State Government – Prescribed Projects
It is possible that infrastructure projects undertaken by the State Government under the State Development and Public Works Organisation Act 1971 (Qld) may affect the land or nearby properties (e.g. water infrastructure pipeline works).
Your use and enjoyment of the land may be affected by a project even though the land is not directly affected. Our searches only reveal issues affecting your land.
We suggest you check to see if projects have been declared or proposed in the area.
The Sustainable Planning Act 2009 (Qld) (“SPA”) contains provisions for the registration of urban encroachment areas that are known to be affected by the emission of aerosols, fumes, light, noise, odour, particles, or smoke.
If the Property is in an affected area, then you are restricted from taking proceedings against the industry making the emissions, with few exceptions.
There is generally no termination right if it is discovered that the Property is in an affected area. However, contracts for units in the Milton Rail Precinct that are subject to a current development application made before 27 April 2009 may be terminated if you did not receive a notice before the Contract.
An owner must not lease a unit in an urban encroachment area before giving notice to any tenant that the unit is in the area and noting the restriction on proceedings.
- Neighborhood Disputes
Please tell us if you hear about or receive any copies of documents relating to disputes between the Seller and neighboring property owners about dividing fences or trees. In particular, please tell us if you are aware of any:
- Notices to fence from a neighbor;
- Applications to QCAT for fencing or trees; or
- QCAT orders for fencing or trees affecting the Property.
If there are three applications or orders affecting the Property and you receive them from the Seller before you enter into the Contract, then you can be obliged to respond to the QCAT application or complete work specified in an order which has not been completed.
If copies of three applications or orders are not given to you prior to your entry in the Contract then you may have the ability to terminate at any time prior to settlement. The Seller may also be liable for your reasonable legal and other expenses incurred in relation to the Contract after you signed it.
If you complete the purchase and the Seller has not completed all work required in a QCAT tree order not disclosed to you before the contract, the Seller will remain liable to carry out the work after settlement.
Are you aware of any building covenants affecting the Property or have you signed any document relating to any covenants? If so, please provide us with details and a copy of any documents signed, as these may impact your proposed use of the Buying a Property or bind you to additional contractual obligations or liabilities.