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Q & A on 2GB discussing Property Law 19/08/2014

Tips on buying a property at an auction

Tuesday, 19 August 2014


CS       You know who this works its free legal advice which you will not get anywhere else, I’m sorry to tell you apart from your local newspaper which is where Turner Freeman have their column at the moment, Turner Freeman appearing in your local newspaper providing information on a range of legal topics in a weekly legal matters column and this week’s column features Family Law, if you are looking in your local newspaper and don’t forget those who get through on the open line between now and 2 o’clock we will chose one of those queries, one of the callers and that caller will win a $100 Westfield voucher, we do this each week for the best question of the day, within our legal matters segment, so go for your life, 131873 on property and family law, get on that open line. Paul Sant from Turner Freeman is in the studio right now, Paul good afternoon

PS       Good afternoon Chris

CS       Good to have you here. Now I want to kick off with a few things and I know I’m getting callers through already, we will get to those, but buying at auction, this is something we have never covered on the property and family law section that we’ve done on a regular basis. Buying at auction, you’ve got a few lessons for us to learn through the process

PS       I have Chris, it seems more and more now when you are looking for property that the property is being sold by way of auction and there are a lot of traps for people who are unaware and perhaps not use to the auction process. You have to be careful, when you put, once the property is on the market and you put your hand up and the auctioneer says,

CS       Sold

PS       Sold to you, points to you, that’s it your locked in, it’s your property

CS       So what are you locked into

PS       The contract

CS       So the gavel goes down, you’re locked into paying the deposit at the least

PS       Yep you don’t even have to sign the contract, you’ve got into the contract there and then, the hammer has fallen to you, you’ve bought the property on the terms and conditions of the contract that were displayed or handed out

CS       Ok so you don’t need to sign the contract as soon you

PS       Legally, that’s yours mate. Legally it’s yours. You are supposed to hand over the 10% deposit, formally they ask you to sign the contract and do the proper exchange

CS       I hear so many stories of people turning up to auctions when they haven’t even inspected the property

PS       Correct not inspecting the property, not looking at the contract. Auctions are a great way of getting rid of a property that you’ve got problems with, because you’ve got a lot of people there who are interested in going for it. Emotions get involved and a lot of the things you would do in say a normal exchange you don’t do because in the heat of the moment you’re there, the emotions etc and you go for it and you can’t expect people to go get pest, building or even strata reports at every auction they go to, I mean you might go to about 5, 6, 7, 8 auctions and not be the successful bidder what are you going to be doing, forking out $500 every time you go to an auction for these pre purchase inspections

CS       What about funding the purchase at an auction. You actually need permission or should get permission from a bank or building society or credit union beforehand

PS       To confirm that you’ve got loan approval, correct. It is very risky going to an auction without knowing that you’ve been given formal approval, because remember the banks will give you a percentage of the value they say the property is worth, not necessarily the price you paid for it

CS       No exactly. Lesson 3 you’ve got to ask a lawyer to review your contract. How many dodgy contracts have you seen?

PS       I’ve seen, and it’s more and more, you get some really strange clauses, weird clauses that you know in 30 or 40 years that I’ve been practicing I haven’t seen before. You think you’ve seen everything, but there is weird and wonderful clauses. Often now, not often, I’ve seen ones where the vendor is allowed to stay in possession for a period of 2 months or something after settlement, so you’ve paid the money, the property is yours but the owners still had to stay in there. You’ve got problems there about the quality or the condition of the property at the time of settlement

CS       Or there has never been permission for an extension or permission for a back shed and you end up having to either pay for those development approvals or

PS       approvals or the consequences

CS       or bring it down. 131873 is the telephone number, let’s go to calls before we speak any more about his lessons. We’ve got 8 lessons to get through today thanks to Paul. Paul Sant from Turner Freeman. David go right ahead, Paul is listening

C1       Hello Chris, hello Paul

PS       David

C1       We’ve just entered, gone into this whole horrible procedure of selling and buying a house. Now we’ve been very luckily to get a simultaneous settlement

PS       Yep

C1       But the question I have for you, if you end up with say a $5,000.00 legal and conveyancing bill at the end of having sold and purchased, do you think that is an exorbitant amount?

PS       It depends upon what you’ve sold and bought. And if you are including and I’m assuming you haven’t included stamp duty in that

C1       No, no not yet, no that’s a whole other demon in itself

PS       Look with all of these things you make some enquiries and find out what the costs are, solicitors and conveyancers are supposed to give you an idea of the costings. I have to admit the enquiries, the Government and this is one of the tricks now that is happening. You’ve got traditionalists, and I put my hand up, I’m one of those, we will do the normal, all the Government enquiries, the full set. The problem with that is, that does cost money. I mean you’re talking $300, $400, $500 sometimes just to get a set of Government enquiries. If I was doing it on the cheap, I wouldn’t be doing any of that I would probably doing only 3 enquiries, council rates, water rates and land tax and nothing else

C1       Ok

PS       In a way you get what you pay for, $5,000 for professional fees seems high but I assume that would include disbursements and it depends on what the disbursements were

C1       Yeah ok

CS       But $5,000 from my experience from buying and selling property, $5,000 seems to be a going rate, but the other thing to work out what the going rate is for what you’re asking is to just ring a few firms and get a quote

PS       That’s it, get a quote, but make sure you are comparing apples with apples

CS       Good on you David, thank you very much for the query. Frank go right ahead

C2       Yeah mines about legal law

PS       Sorry

CS       Are what kind of law Family Law

C2       Yeah I took my ex partner to Court and got custody of my daughter on weekends and that, but she still won’t abide by the orders, what do I do

PS       There is a thing called a contravention application. You can bring an application to the Family Court and the Court’s got a range of orders it can make to facilitate the orders. I mean the Court take their orders very seriously and they don’t take too lightly to people who don’t comply with Court orders. Now the Court can order make-up contact, I mean I’ve seen in a very serious case where the Judge ordered the child to the other parent. Because it is in the best interest that the parties facilitate a good relationship with both parents

C2       Yeah well you see I’ve done all that and she still won’t follow orders. The only time she turned up to Court, when the Judge basically said well I’ll jail you if you don’t.

PS       Well, I was in Court this morning and that is exactly what a Judge did, or not, he issued a warrant and the party didn’t turn up for a hearing relating to children, so he ordered a warrant, left it lie for I think until Friday and if she doesn’t put up her hand and comes to Court the warrant will issue and the police will get her, will go and get her

C2       The problem you know these child support people, and they back them 100% and you know they don’t follow orders or, then she gets legal aid and I’ve got to pay thousands

PS       I don’t know about child support, I mean child support have got a formula and have got legislation to follow, legal aid is a question of entitlement, if you are entitled to legal aid you are entitled to legal aid

C2       Yep, no worries

CS       Frank, thank you very much for your call 131873 our legal matters segment, Turner Freeman of course and you can go there, your local newspaper and see their latest legal matters column and you will find that it is on Family Law this week and for the best caller coming through between now and 2, $100 Westfield voucher as well, thanks to Turner Freeman, it’s a quarter to 2.

Property and Family Law, we’ve focused on property mainly with our callers this afternoon, but I’ll tell you what there are some questions coming through now that you’ll be interested in because there are some common queries when purchasing property, Norm go ahead, Paul is listening

C3       Yeah, thanks for that. My question is about real estate agents commission. I’ve been involved in the past, selling properties around the 5, 6 $700,000 mark and the 2% for agents fees is quite reasonable. But I’m probably going to be involved in selling the family home in the next 6 months, year whatever, which is worth a considerable amount of more money. That 2% starts becoming quite a considerable amount to the agent, is there some sort of cut off fee or how do you structure it when the property starts getting more expensive, is it still around the 2%

PS       Most of the real, the REI standard contract I think it’s usually a flat fee over the whole purchase price

C3       Right

PS       But look this is a contract and it’s open for negotiations

C3       Sure

PS       It’s what you agree with. Now I have seen and lately I’m seeing agreements where for example they will charge X% up to a certain amount and then anything over it will be a different % rate

C3       Sure

PS       And they have reared their heads recently. So that’s something. There are people advertising 1% commissions too, but you’ve just got to, you find an agent that you are comfortable with and then negotiate a deal. I have to admit when I’ve bought and sold a few, couple of places and mate they always seem to be negotiable

CS       Yeah very much so, look at the end of the day I’ve always found that if you’re getting a great agent you are going to get a much better price

PS       And that’s important

CS       Don’t go for the cheapest price

C3       Yeah I appreciate that

CS       You get what you pay for, Norm thank you very much for the question, Mike go right ahead

C4       Hi Chris and Paul how are you

CS       Very well

PS       Good, thank you

C4       I bought a block of land in Queensland some years ago and at the time of the purchase the developer that developed the area had a dispute with the council over infrastructure charges. The developer then went broke and didn’t pay his infrastructure charges to the council, so the council in their wisdom laid all their infrastructure charges onto the land holders and therefore I got a bill for infrastructure charges for over $30,000.00. I want to know can they

PS       That’s the first I’ve heard of something like that because usually, now listen your talking Queensland

C4       Yes

PS       I practice in NSW and to be honest with you, certainly in conveyancing things are a little bit, not a little bit they are vastly different. Now in NSW you wouldn’t have your DA signed off by council until you’ve paid all those, what they call here Section 94 contributions

C4       Right

PS       Now I would have thought the same thing would have applied up in Queensland but mate as I say to you, I just don’t know how it works up there

C4       What happened at the time of my purchase there had been a dispute with the developer and the council and the Courts awarded in the favour of the developer, so at that stage there was no outstanding fees on the property that I bought. I purchased it in 2007 then in 2008 the council put in an appeal and the Courts then awarded in favour of the council, so the council made the charges retrospective

PS       Yeah I think you were at the wrong place at the wrong time. And no one thought about requiring a bond or sum of money to be put aside pending the outcome of an appeal or pending an appeal

C4       No, and as I said I got, everything went through legally with the block of land and it wasn’t until I got the first rate notice and it was just the normal rates and I got a second rate notice 6 months later and it’s got a $32,000.00 bill onto of it for outstanding fees

PS       I assume everyone would have objected and no one would have paid it

C4       Well I still haven’t paid it, with interest it’s now $47,000.00

PS       I would have thought someone would have made an application to the Court about that

C4       Well there was a bit of a hullabaloo, it was around Hope Island in QLD and they had a or I think they had a class action that went up there, but nothing ever happened, but the council just stands behind the Government regulation and say well we can do it and the Courts said you can do it

PS       My friend I think that’s your answer, if they can do it, they can do it. I think it was a difficult position where the council were forced to sign off on the plan, the plan got registered, noone considered the question about an appeal and requiring moneys to be put into a bond pending the final outcome. It seems to be a peculiar set of facts because as I say here they don’t release the plans until the 94 contributions are paid.

CS       I’ll tell you what Mike we need to give you some kind of consolation, I think you should win our $100 Westfield voucher, what do you reckon

PS       Yeah I think so

C4       Oh I didn’t expect that Chris but thank you

CS       Yeah no problems, stay right there Mike and I’ll put you through to Shannon and we’ll organise the delivery of a $100 Westfield voucher for you, Barry in Rosehill go for your life.

C5       Is that me is it

CS       It is Barry

C5       Yeah ok, I did a search with the new tree laws regarding the 10 meter or 50 meter clearance and went to a website which said my property falls under the 10 meter perimeters at Hornsby Heights. Now on this search when it comes up with my property, it says your property has been identified containing Aboriginal heritage and in addition to the general conditions you may not clear any vegetation etc etc, are we supposed to be notified of that, that’s the first I’ve ever heard of that

CS       Barry just go back, this is the new section that came in July 1 I think it was, wasn’t or August 1

C5       I was sent a link through the Council website and did a search on my particular property which I’ve had for about 5½ years now end of 08 and it came up your property has been identified as containing Aboriginal heritage, I’ve never heard of that before

CS       Aboriginal heritage and so you can’t clear the vegetation because of that?

C5       Well I don’t know, I rang the council and they’ve got no idea

PS       Yeah, are you sure that it’s your property that’s been identified or the area

C5       No it’s my individual property, I took a snapshot of the result so yeah it’s coming up with my property and with that disclaimer down the bottom of it

CS       We might be able to help Barry off air

PS       I’ll give him a call

CS       because it sounds like it’s a bit of a complex issue and probably can’t be dealt with

PS       I’d need to look at the letter he got

CS       Now Paul is happy to help you Barry off air if that’s ok

C5       Yeah that’s fine

CS       Yeah let’s do that

PS       Just give me a call on the 1800

CS       And that will be interesting to also discuss next time you’re in, very interesting indeed. Barry stay there I’ll put you through to Shannon and we will do something about that, Paul thank you very much for your time this afternoon

PS       Thank you Chris

CS       Property and family law once again on the programme, don’t forget you can have a look at your local newspaper for that legal matters column as well, featuring Turner Freeman, thank you Paul.


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