Selling Your PropertyDo You Need a Lawyer?

Selling a property can seem relatively simple: find a buyer, agree on a price, sign the Sale and Purchase Agreement and wait for settlement.

But legally, there's much more happening behind the scenes.

A property sale involves a binding contract, title documentation, financial arrangements, important deadlines and the formal transfer of ownership. And some problems are much easier to identify before an agreement is signed than when settlement is only days away.

Why does getting legal help early matter?

The Sale and Purchase Agreement doesn't just record how much someone has offered for your property. It can determine matters such as:

• •The conditions of the sale
• •The settlement date
• •The deposit
• •Which chattels are included
• •Seller warranties
• •Possession
• •What happens if something goes wrong
• •Additional terms negotiated between buyer and seller

Once an agreement becomes binding, both parties can have significant legal obligations.

This is why a seller may choose to involve a property lawyer before signing the Sale and Purchase Agreement, particularly where anything about the property or transaction is unusual.

When should you contact a property lawyer?

A property lawyer doesn't only become relevant once you've found a buyer.

Legal assistance may be useful before signing an agreement, particularly where questions exist around the title, previous building work, ownership structure, tenants, trusts, relationship property or other circumstances affecting the sale.

A lawyer can also explain the proposed agreement and the legal process that follows once a deal has been reached.

The earlier a potential legal issue is identified, the more opportunity there may be to understand it before contractual commitments are made.

Is a Sale and Purchase Agreement really legally binding?

Yes.

A signed Sale and Purchase Agreement isn't simply an indication that a buyer would like to purchase the property.

It is a contract between buyer and seller.

Whether the agreement is conditional or unconditional, what conditions apply, when they must be satisfied and what additional clauses have been included can all be important.

Even where a familiar standard-form agreement is used, the particular terms of the transaction still matter.

What if the buyer's offer is conditional?

A buyer may make an offer subject to conditions. Depending on the agreement, these might relate to matters such as:

• •Finance
• •A LIM report
• •A building inspection
• •Title
• •Due diligence
• •Sale of another property
• •Other specifically negotiated conditions

Until the relevant conditions have been dealt with in accordance with the agreement, the transaction may remain conditional.

The wording and deadlines associated with those conditions can therefore matter to both buyer and seller.

Can problems with the property come up after you've found a buyer?

Yes. Issues can sometimes emerge during the sale process that the seller may not have expected. For example, questions might arise about:

• •Previous building work
• •Building consents or Code Compliance Certificates
• •The property's title
• •Easements or covenants
• •Boundaries
• •Council information
• •Tenancies
• •Chattels
• •Other matters raised during the buyer's investigations

The legal significance of an issue depends on the particular property, agreement and circumstances.

This is another reason why property transactions aren't always as straightforward as the initial offer and price might suggest.

What if there has been unconsented building work?

Renovations, extensions, decks, garages and other alterations can sometimes become relevant when a property is sold.

Questions may arise about building consents, Code Compliance Certificates or council records, depending on the work involved and when it was completed.

Discovering an issue doesn't automatically tell either party what the legal consequences are.

A property lawyer can explain how the particular circumstances may interact with the proposed sale and Sale and Purchase Agreement.

What are seller warranties - and why do they matter?

A Sale and Purchase Agreement can contain warranties given by the seller.

These are contractual promises concerning particular matters relevant to the property or transaction.

The exact warranties depend on the agreement being used and any amendments made to it.

Because they form part of a legally binding contract, it's important for a seller to understand what they are actually agreeing to rather than assuming that every clause is simply standard paperwork.

Can chattels really cause a property dispute?

They can.

Compared with the value of a house, an oven, dishwasher, heat pump or set of curtains might seem insignificant.

But the Sale and Purchase Agreement can specify which chattels are included in the sale, and contractual provisions may also be relevant to their condition.

Disagreement over what was supposed to remain at the property - or the state it was supposed to be in - can create unexpected issues close to settlement.

Small details in a large transaction can still have contractual consequences.

What happens to your mortgage when you sell?

A mortgage on the property doesn't normally prevent the property from being sold.

As part of the legal settlement process, arrangements are generally made for the relevant lending and security position to be dealt with so ownership can transfer as required.

Your lawyer handles the legal aspects of this process and the settlement funds associated with the transaction.

If you're simultaneously buying another property, the financial and legal coordination can become more involved.

What happens between signing and settlement?

Quite a lot.

If the agreement is conditional, the relevant conditions first need to be dealt with according to the contract.

Once the transaction is unconditional, the parties move towards settlement.

Behind the scenes, the lawyers or conveyancing professionals involved deal with the legal documentation, funds and requirements necessary to complete the transfer.

For the seller, settlement can also involve mortgage arrangements, moving out, handing over possession and potentially coordinating the purchase of another home.

What happens if the buyer can't settle on time?

A missed settlement isn't simply the same as changing a moving date.

The agreed settlement date forms part of the contract.

If a buyer or seller isn't able to complete settlement as required, the Sale and Purchase Agreement can provide for legal and financial consequences.

Exactly what happens depends on the agreement and circumstances, which is why legal assistance can become particularly important when settlement doesn't proceed as planned.

Common questions property sellers ask

• •When should I contact a property lawyer?
• •Should a lawyer review the agreement before I sign?
• •What does conditional and unconditional mean?
• •What if there is unconsented building work?
• •What are seller warranties?
• •What happens to my mortgage when I sell?
• •What happens to the buyer's deposit?
• •Can the buyer pull out of the sale?
• •What happens if the buyer can't settle?
• •Can we change the settlement date?
• •What happens on settlement day?
• •Are there different requirements when selling an apartment?

Why does finding the right property lawyer matter?

Not every property sale requires exactly the same legal experience.

A straightforward residential sale may be very different from selling a property involving title problems, unconsented building work, a trust or company, relationship property, unit titles or a linked purchase and sale.

You may also value a lawyer who can work within a tight timeframe, communicate clearly and keep you informed as the transaction progresses.

The right property lawyer should help make the legal side of the sale easier to understand - and be able to recognise when something requires closer attention.