Questions real estate agents ask about prescribed documents in property sales
In my work as a licensed conveyancer, I am often approached by real estate agents seeking clarification on prescribed documents and the requirement for vendors to obtain certain certificates for inclusion in their contracts.
This summary is a response to those questions.
Prescribed documents under the Conveyancing Act 1919
- Full title search showing the registered proprietor and including copies of the deposited plan and any covenants, restrictions, easements etc which are listed on the title.
- Section 149(2) Certificate – although no date for expiry is set in the regulations, ideally it will be no older than nine months.
- Sewerage Service Diagram (location of sewer connections to the house) and/or Sewer Service Location Diagram (location of sewer in relation to adjoining properties), if available – one or both documents satisfy the requirement.
Strata title properties
- Full title searches for both the common property (including all any covenants, restrictions, easements, etc) and the strata unit being sold.
- The common property title search must also include any changes in by-laws.
Home Owners Warranty Insurance
Home Owners Warranty Insurance (HWI) is required when building work is carried out where the contract price or the building labour and materials cost over $20,000.
An owner must attach a HWI Certificate of Insurance where the owner-builder enters into a contract for sale within six years after completion of the work. Completion for a residence is defined as the earlier of:
- date of handover by the builder
- date the builder last carried out initial work
- date of issue of occupation certificate
- 18 months after the owner/builder permit has been issued
- Completion for a strata unit is the date of the occupation certificate
The developer and the person who does building work otherwise than under a contract has the obligation to provide a NSW Fair Trading brochure.
A successor in title is not required to provide (whether by attaching or otherwise) any evidence of insurance.
Onsite sewer management system
The regulations don’t place any obligation on the vendor to provide the Approval to Operate the Sewer Management System and the vendor can, if they like, not go to the trouble of obtaining one. However, most lawyers and conveyancers will ask for one prior to exchange. So, in the interest of a speedy exchange, it would be a good idea to encourage the vendor to obtain one prior to listing the property for sale.
Councils charge application fees and inspection fees in connection with providing an Approval to Operate the Sewer Management System. These fees may vary between councils.
The approval runs with the owner of the property, not the property, so the new owner will need to make an application within three months of purchase and pay the fee again to have the approval in their name.
From April 2016 changes have been made to the legislation for the sale of properties which include a swimming pool. The contract must include one of the following:
- Certificate of Compliance
- Occupation Certificate
- Certificate of Non-Compliance
If the property is purchased with a Certificate of Non-Compliance attached, the buyer will have 90 days from settlement to rectify the areas of non-compliance.
Councils charge a fee to inspect a pool and this may vary between councils.