Apartment Specialists Podcast No: 127
What are these four conditions that should always be present in your contract no matter what type of apartment you are buying? Watch this video to know more.
When making an offer, what conditions should you give? In buying an Apartment, there is a whole host of conditions you can use depending on the circumstance. For example, the price of the Apartment would depend if it is in a hotel or it is a leasehold property. These kinds of things. There are four conditions, I think, that you should always use no matter what type of apartment you are buying. These are the things we will tackle on this podcast.
The first one is regarding your solicitor. When you go and enter into a sale and purchase agreement and you are with a real estate agent, they need to write it up with you. How often have you done a sale and purchase agreement before? Unless if you are buying a property on a regular basis, very few of us are, it is a very fine issue. You should make sure your solicitor reviews the contract and make sure it is all in order, because real estate agents get very anxious about it. They get very lazy about it because they are doing it so often. You really need to understand what you are entering into and that is why your lawyer’s approval is an absolute must.
You can say this agreement is conditional on the purchaser. Being the buyer, a purchaser’s solicitor being satisfied with all or any aspects of this contract including title and the conveyance of this property. If this clause is not satisfied by 4:00pm on the fifth working day, then this agreement will be at an end. Now, what I am talking about is, if this clause is not satisfied by 4:00pm on the fifth working day, then that means you have got five working days. For example, Monday to Friday not including Saturday and Sunday, your lawyer can only give the sale and purchase agreement the thumbs up. So it is plenty of time.
The next clause I will talk about is about the reviewing of, I suppose it is a health check of the building. Looking at the annual general meeting minutes – if any. Very few people ask about is your extraordinary general meeting that is called the EGM. I will just take a quick look in here so I can show you what I am talking about. Now, this one is really important and very few people actually put it in. They will put in minutes but not the EGM minutes, so I will just read it out.
“This agreement is conditional upon the purchaser’s solicitor being satisfied with the last two years’ of body corporate minutes including any extraordinary general meeting minutes – if any.”
I put if any because extraordinary general meeting minutes are generally, if something has happened that is out of your area. One good example is, when there is leakage, or best case scenario, there is a change of body corporate rules. It is one where a meeting has to be held in-between the annual general meetings to deal with a particular amendment. Obviously, if this order is not satisfied by 4:00pm on the fifth working day, then this agreement will be at an end. Hopefully, that one helps and I hope every single one of you is using that one. That is an absolute must.
The next one is, this is about getting a building inspection and very few people actually do. It is quite surprising, because very few people actually know much about construction. How Apartment complexes are built? This is one that when I bought one of my first apartments a long time ago I wish I did because now it leaks. If I had this clause in it, it probably would have put us off. This agreement is conditional upon the vendor obtaining and being completely satisfied with a building inspection report. If this clause isn’t satisfied by 4:00pm on the seventh working day this agreement will be at an end. Pretty self-explanatory and It means you have a building inspector come in and look at the apartment in the building.
Give you a report on the condition of the building; the materials and all that kind of thing. It will also give you an insight into the building and some confidence with your purchase. At the end of the day you are spending a lot of money. As soon as you do this you could save thousands or tens of thousands of dollars later on. The final clause is a small one, it’s actually not a condition. It’s a warrant because it’s about the appliances. This is one most people get caught out in, because we will go and look at the apartment. But how many of us actually turn on every appliance? How many of us actually put the washing machine through a cycle, I’ve never seen it?
It actually happened when my parents bought one. They just learned the hard way and I learned from my mistakes I suppose we could say. It was a while ago now, but anyway.
“The vendor warrants that all appliances, light fittings and outlets will be in good working order prior to settlement.”
What that means is you go into the agreement, by the time it settles and you actually become the owner, all the appliances are working. And that means if you missed one, when you are looking at it, it is in the chattels list and you didn’t check that and it still has to be working.
if you did not check it at the time of inspection, which most people do not; and if it breaks down in-between the time that you have gone unconditional to the time that you own the property, which is generally about two, three or four weeks’ time, your appliances should still be in working order. It is very very important and it is a pretty simple one, but it can be really frustrating when you move into an apartment and you find that things do not work. Especially things like light fittings and maybe the plumbing’s wrong. Things can get quite expensive.
Anyway, I hope that helps. Obviously, there are a lot of other clauses you can put into a sale and purchase agreement, but these ones I think are standard ones. I think everyone should put these in. I hope that helps.
If you have any other questions, just give me call or book an appointment below and I will answer it.