Sunset Clauses usually affect off-the-plan property purchases but may sometimes affect existing properties. There are scenarios where developers have run over time with construction and the Sunset Clause has been triggered. Sometimes, developers cancel contracts and refund deposits, only to then try and resell the properties at higher prices to new purchasers. While you will get your deposit back, the market may have moved on in the meantime and property values may have risen beyond the purchaser’s means. It is important for prospective purchasers to do their research on the developer and builder and satisfy themselves on the reliability of the developer and builder in delivering projects on schedule.
A prospective purchaser should always check with the local council the property is not in a special area designated for things such as flooding, bush fire prone and significant snowfalls.
The purchaser should ask the council if there are any town planning permits allowing anyone in the area to do something which is not strictly in line with the zoning of the property you are buying; or if anyone has a private section 173 agreement with the council which allows/imposes certain requirements on the property or any properties in the area, which a purchaser would not normally be able to discover by just looking around the area.
Not sure how to check or if this could apply to you? Ask a property lawyer from Conveyancing.com.
Given the large sums of money required to purchase properties, the vast majority of most home buyers obtain finance from a bank or financial institution to help fund the purchase. Ensuring that finance is approved, and the relevant loan documents signed well in advance of the settlement date is therefore critical. In our experience, too many purchasers assume that engaging the services of a mortgage broker means that they do not need to do anything to obtain their loan; they take the view the mortgage broker will “sort it out”. This is a dangerous mistake to make as unfortunately all too often we find that brokers, mobile lenders and home finance managers fail to ensure mortgage documents are prepared and executed by clients correctly.
As an associated issue, purchasers always need to make sure their contract is made “subject to finance” and complies with their obligations and the times for seeking approval etc in every case where they do not have finance in place before they sign.
Many properties are bought as investments and are bought subject to the existing tenancies. Full details of the tenancies will be attached to the contract. By virtue of the law on completion of the purchase the purchaser automatically steps into the shoes of the vendor and the lease becomes enforceable by the purchaser. A discussion with tenants before exchange will reveal any issues that might exist that would otherwise remain undisclosed.
It is important to note that delays to settlement are not uncommon. For example, if a settlement is scheduled for 2pm, it may only actually settle at 4pm or may be delayed till later in the day. If the purchaser books a moving van to arrive at their new property at 2pm, they bear the risk of having to make alternative arrangements should settlement be delayed. They may also have to make alternative arrangements for the collection of keys from the real estate agent.
We understand the property purchase process and help make it simpler our clients to understand. Contact us to speak with an expert about how we can help.