Avoid Surprise Costs: Protect Yourself in Community Title Contracts!

As property prices rise, purchasing units or townhouses in community titles schemes is becoming increasingly popular. However, many buyers are unaware of potential pitfalls in these contracts, especially regarding the Building and Pest Condition.

When you're purchasing a unit or townhouse in a community titles scheme, it's easy to focus solely on the property itself. However, overlooking the common property could lead to unexpected costs down the line.

Imagine this: You've completed the building and pest inspection for your unit, and everything looks great. But what about the garden areas, foyer, retaining walls, and driveways that are part of the common property? If there's a problem with any of these areas, the cost of maintenance, repair, and replacement falls on the body corporate.

But what if there's not enough money in the sinking fund to cover these costs? In that case, the body corporate will need to raise special levies from each owner in the community titles scheme. This means you could be hit with a hefty bill for repairs that you didn't anticipate.

To avoid this situation, it's crucial to amend the Building and Pest Condition of the contract so that it also applies to the common property, or insert a due diligence condition so that you can fully investigate the scheme and the running of body corporate. This way, you can ensure that you're protected from surprise special levies and unexpected expenses.

Before signing any contract, it's wise to seek legal advice to understand the implications fully. Making amendments to the contract now could save you from financial headaches in the future. Remember, once the contract is signed, it's legally binding, so it's essential to get it right from the start!

Common Q&A's

Why should you engage a solicitor before looking for a property?

Buying a property is an exciting journey, and having a solicitor by your side from the start can make all the difference! A solicitor is like your legal guide, helping you understand the ins and outs of the process, so there are no surprises down the road. They can spot any potential issues early on—like title disputes or errors on contracts —saving you from headaches later. Plus, they’ll review all the legal documents, making everything clear and straightforward. By teaming up with a solicitor before you start your property hunt, you’ll have the confidence and peace of mind to make the best decisions and truly enjoy the experience of finding your dream home.

How can I make the process less stressful?

Buying a property can be a complex and sometimes overwhelming experience, but having a solicitor on your team can significantly reduce the stress. A solicitor handles all the legal paperwork and negotiations, ensuring that everything is in order and protecting your interests. They can explain complicated legal terms in plain language, so you always know what’s happening. If any issues arise, such as disputes over the property's title or issues found in surveys, your solicitor will manage these on your behalf, saving you time and worry. With a solicitor taking care of the legal details, you can focus on the exciting aspects of buying a property, confident that your purchase is in safe hands.

Can I use the same solicitor for both transactions, buying and selling at the same time?

Yes, a buyer can absolutely use the same solicitor for both buying and selling transactions, and doing so can simplify the entire process! Having one solicitor manage both sides means they have a comprehensive understanding of your situation, making it easier to coordinate timelines and handle any legal intricacies that arise. It can also save you time and reduce the hassle of communicating with multiple parties. Plus, a single solicitor can streamline the paperwork and ensure that both transactions proceed smoothly. By choosing one trusted solicitor for your buying and selling needs, you’ll benefit from a more seamless and stress-free experience.

What’s the best piece of advice you can offer to someone purchasing from your perspective?

The best piece of advice I can offer to someone purchasing a property is to assemble the right team before you start your home-buying journey. Having a trusted broker, real estate agent, and solicitor on your side can make all the difference. Your broker will help you secure finance, ensuring you get the most favourable mortgage rates and terms. A knowledgeable real estate agent can provide invaluable insights into the property market, helping you find the right property at the right price. Meanwhile, a solicitor will handle all the legal aspects, reviewing draft contracts to protect your interests before you sign the legally binding document, and ensuring that the full transaction goes smoothly. These three professionals working together will provide comprehensive support, guiding you through the process from all angles—financially, market-wise, and legally—to achieve the best possible outcome for your home purchase.

Why does the price for conveyancing vary so much between practices? 

It’s a case of "you get what you pay for". There is a significant difference between having a conveyancer or a solicitor handle your home purchase. Budget firms may offer extremely cheap conveyancing services, but often you are only engaging with a conveyancer—someone who does not have a legal background or law school education. On the other hand, having a solicitor take care of your matter means more experience, more knowledge, and peace of mind that if a legal issue arises, you have a qualified professional to discuss it with right away. Investing in a solicitor ensures you have the expertise and support needed for, probably, the biggest and most important purchase of your life!

Contact Us

For a no-obligation consultation on various matters, you can contact us at info@mmpcl.com.au or (07) 3184 2424.

M&M Property and Commercial Lawyers are one of Lendd Finances trusted partners and we have worked alongside them on many purchases. Lendd Finance would never recommend a 3rd party if we didn't have 100% confidence in their ability and exceptional service.

Disclaimer: This article is written by M&M Lawyers and this content is intended as general commentary and may not be applicable to your specific situation. It does not replace independent legal advice.