Legal Requirements for Selling Property: What You Need to Know in NSW

G'day everyone! Today, I am going to talk about the essential legal requirements you need to prepare when selling property in New South Wales (NSW). The Australian property market can be quite complex, with numerous legal procedures and documents required. Under the Conveyancing Act 1919 (NSW), sellers need to ensure they have all the relevant paperwork and processes in place. Let's dive into the details!

Essential Contract Documents

To sell a property, you'll need several key documents. These documents are necessary to meet the legal requirements of the sale process and include the following:

• Contract for Sale: This is a crucial document that must be prepared before marketing your property.
• Zoning Certificate (s10.7 Certificate): This certificate confirms the zoning details for the property.
• Drainage Diagram: This document provides information on the drainage setup for the property.
• Certificate of Title: This certifies the ownership of the property.
• Easement and Right of Way Documents: These include details regarding any easements or rights of way that affect the property.

Additional Documents for Strata Properties

If you're selling a strata property, you'll need some additional documents to provide prospective buyers with detailed information about the property:

• Strata Levy Statement: This statement provides information on ownership and management of the strata property.
• Strata Plan: Detailed plans from the original subdivision, which help understand the building's structure.
• By-laws: The rules and regulations governing the strata property.

Choosing the Sale Method

When selling property, there are two main methods of sale, each with its own characteristics and procedures. It's essential to choose the method that suits you best.

1. Private Treaty Sale

A Private Treaty sale involves setting an asking price and negotiating directly with potential buyers. In this method, there's usually a cooling-off period of five days, giving the buyer some time to change their mind after signing the contract.

2. Auction Sale

Auction sales are popular, particularly for high-value properties in Sydney, and account for around 35-40% of the market. There is no cooling-off period for auctions, and the successful bidder must pay a 10% deposit immediately upon winning the bid. This method is ideal if you want a quick sale or if you're expecting multiple interested buyers.

Contract Signing and Settlement Process

Once the contract has been signed, the settlement process follows these steps:

• Deposit Payment: Typically, a deposit of 10% of the sale price is paid and held in trust by the solicitor or real estate agent.
• Settlement: Settlement generally takes around six weeks after the contract is signed. During this time, any existing mortgage is discharged, the title is transferred, and adjustments for taxes and levies are made.

Cost Structure When Selling

There are several essential costs involved in selling property. The estimated costs are as follows:

• Legal Fees: $1,100-3,000
• Building/Pest Inspection: $300-400
• Valuation Fees: $300-500
• Adjustment for Levies/Taxes: Minimum $1,000

Tax Considerations

Taxes are also an important aspect when selling property. Key tax items to be aware of include:

• Capital Gains Tax (CGT): Applies to properties acquired after 1985.
• Goods and Services Tax (GST): May apply to investment properties.
• ATO Clearance Certificate: Required from the Australian Tax Office if the sale price is over $750,000.

In Summary

All these steps are governed by NSW law, and specific advice may be needed depending on your situation. It's always best to consult a local solicitor before selling to ensure you're fully prepared and compliant. By preparing thoroughly, you can minimise uncertainty and make the sales process smoother.