Glossary

Chattels

The extras included with the property purchase, like an oven or light fittings. These vary from place to place and can be added to in the schedule at the back of an agreement.

Consent Notice

This document contains the local Council’s conditions of consent to a sub-division and is registered on the Record of Title. All affected owners must comply with the terms of the notice at all times.

Conveyancing

This is the legal term used to define the transfer of legal title of property from one party to another. It covers sales, purchases, finances, refinances, family trusts, relationship property and anything to do with land, mortgages and security interests.

Deposit

The amount of money paid to secure the purchase of the house. Usually this consists of around 5% or 10% of the purchase price. On settlement, the deposit is treated as partpayment of the purchase price. It's important to find out what paying a deposit will commit you to, whether the deposit is refundable and, if so, in what circumstances. Sometimes agreements with short turnarounds or by mutual agreement have no deposit at all.

Easement

An easement is a document registered on a Record of Title which allows the land to be used for a purpose that benefits a neighbouring property. Common Easements are: rights of way, rights to drain water and sewage, and rights to convey telecommunications and gas.

Equity

Equity is the value of the property minus any loans secured against that property (e.g. a property worth $500,000.00 with a $300,000.00 loan would have equity of $200,000.00).

Home Loan

The money that is lent to you by the bank to cover the remaining cost of buying a home after any deposits have been paid. A conditional home loan approval is when your bank agrees to lend you a certain amount of money for the purpose of buying a home, as long as you meet the conditions they outline.

An unconditional home loan approval is when your bank agrees to lend you a certain amount for a specific property. You must have met any other conditions they have outlined previously.

Land Covenant

This is a document registered on the Record of Title which states what an owner can and cannot do on the land. They are very common in modern sub-divisions and are used to ensure that the quality of houses constructed is of a high standard so as to maintain property values and not detract from the overall value of the neighbourhood – some are many pages!

Mortgage

The legal document to be registered on the Record of Title by your lawyer to secure the loan debt that you owe to your bank.

Penalty Interest

The interest rate (usually 10% to 15% per annum calculated daily) that can be charged by the vendor should the purchaser not complete settlement on the scheduled settlement date.

Priority Amount

This is an amount placed with the mortgage by the bank. The ‘priority’ is how much the bank would be able to claim against your property before other creditors could get an interest.

The Priority Amount is generally for an amount much higher than the value of the land (usually 1.5 times property value) and protects the lender in the event that you are unable to repay your home loan.

Purchaser(s)

The person or people (and sometimes a Company or a Family Trust) who are buying a property.

Rates Apportionment

A standard practice in conveyancing, the entire period of local council rates that the settlement day falls in is usually paid by the vendor, with the purchaser reimbursing them for the days from settlement to the end of that period. This apportionment is usually found within a settlement statement.

The alternative is the vendor not paying for that period of rates, and instead offering a ‘credit’ for the days from the start of the rates period to the settlement date when the vendor owned the property.

The best way to think about what might seem as an added cost to you as a purchaser is that you are essentially just paying for your own rates a little earlier than anticipated.

Record of Title

The official document, showing ownership of the land described in it. Formerly known as a ‘Certificate of Title’, the Record of Title describes the area and location of the land, the registered landowner, and all mortgages and other interests (e.g. easements) affecting the land. This is what passes at the end of a standard conveyancing.

Sale and Purchase Agreement

The legal contract between a vendor and the buyer for the sale and purchase of property. You’ll need Whitmarsh Law to look over legal paperwork and ensure your rights are protected before you sign the agreement.

Be aware, signing the agreement is a binding contract and, unless there are conditions to satisfy in the agreement that enable cancellation, you could be committed to seeing the purchase through to the end.

Security

This is what you offer to the lender in exchange for the loan. In the case of a conveyancing transaction, the security offered is the land. The lender takes this ‘as security’ to protect their financial investment in case you cannot meet your obligations under the loan agreement.

Settlement Day

This is the final stage of buying a house. On settlement day, undertakings are exchanged between lawyers, the loan is transferred from the bank to our Trust Account, and then we transfer the funds, together with the balance of the purchase price to the vendor’s solicitor’s Trust Account.

Once the vendor’s solicitor receives these funds, settlement is complete, the house keys are released by the agent, and we register your name as the new owners on the Record of Title.

Usually settlement is completed before 4pm on the day of settlement. Delays after this time can incur penalty interest costs as per above, depending on the party at fault for the delay.

Settlement Statement

This is the statement received by the vendor prior to the settlement day. The settlement statement details the amount that the vendor will require to settle the property and release ownership to you. The settlement statement accounts for the purchase price, whether a deposit has been paid, and apportions rates and body corporate levies between the vendor and purchaser as well.

Unconditional Agreement

The unconditional date is when you have satisfied all of your conditions contained in the Sale and Purchase Agreement. Once an agreement is unconditional the deposit is usually then due for payment to the real estate agent or the vendors lawyer’s Trust Account.

Undertakings

These are exchanged between lawyers on settlement day. They entail that each side is ready to settle and that the funds have been paid. Once undertakings are received and given, the vendor must release the Record of Title to the Purchaser.

Vendor(s)

The person or people (and sometimes an Estate, a Company or a Family Trust) who are selling a property.