| UNDERSTANDING TECHNICAL, LEGAL AND BUILDING TERMS
Adjustment
The apportion between buyer and vendor of expenses like council and water rates.
Allotment
A lot or block subdivided from a larger portion of land.
Amortisation period
The number of years it will take to repay a home loan completely. Maximum amortization period is usually 25 years.
Appraised value
An estimate of the value of the property offered as security for a home loan. This appraisal is done for financial lending purposes and may not reflect the actual market value.
Assets
What you own.
Auction
Sale of a property in public to the highest bidder.
Breach of contract
Breaking the terms of a contract.
Brick veneer
A system of building in which a structural timber frame is tied to a single brick external wall.
Bridging finance
A short-term loan, usually at a higher rate of interest, taken out by people who have bought a house while waiting for theirs to be sold, or when a normal mortgage and their savings fall below the asking price.
Building regulations
Designed to uphold the standards of public safety, health and construction, these regulations are in place and have been formulated by local councils to control the quality of buildings.
Caveat
Is a document any person with a legal interest in a property can lodge with the Titles Office to ensure the property is not sold without their knowledge.
Caveat Emptor
Latin for ‘Let the Buyer Beware.’ This puts the burden onto the buyer to be satisfied with the item before purchasing a property.
Certificate of Title
Legal proof of ownership of a property, carrying the owner’s name and other information.
Chattels
Chattels are personal property. There are two types. Real chattels are buildings and fixtures. Personal chattels are clothes, furniture, etc.
Cluster housing
Detached group of houses which share open space.
Cluster Title
Each Cluster Title holder has a Certificate of Title which specifies ownership in terms of a particular area for which the owner is responsible and defines the common property. Unlike a Strata Title, it does not subdivide ‘airspace.’
Commission
Fee payable to real estate agent for selling a property, by the person authorising the sale. Usually a percentage of the sale price.
Common property
Areas in strata-title properties shared by all owners.
Company Title
This title applies when owners of flats in a block form a company. Each has shares in the company which owns the land and buildings. The owner of the shares is entitled to exclusive occupation of a flat. However, if you want to alter occupancy in any way, you must have the company’s approval to do so. See your solicitor before buying.
Contract Note
The first document signed on buying a house is sometimes a Contract Note, instead of a Contract of Sale. This document when signed by both parties is a legally binding as a Contract of Sale and the buyer and seller should treat it with the same importance. It must be accompanied by a Vendor Statement.
Contract of Sale
Written agreement setting out the terms and conditions of a property sale.
Conveyancing
Legal process of transferring the ownership of a property from one person to another.
Covenant
Conditions affecting the use of land or property written into the title.
Deposit
Usually 10% of the purchase price of a property placed in trust as evidence of intention to buy. Non-refundable after exchange of contract, the deposit goes towards the purchase price when the sale goes through.
Easement
A right held by someone to use land belonging to someone else for a specific purpose. Mains, drains and water pipes are usually covered by an easement.
Encroachment
When a building overhangs someone else’s property, or a fence is built over he dividing line between two properties.
Encumbrance
An easement, mortgage, or other liability on a property which impedes its use or transfer.
Equity
The difference between the market value of the property and any loans that are outstanding on the property.
Exclusions
Any item that is specifically not included in the sale. e.g. An above ground pool, garden shed, etc.
Flat interest rate
Is calculated on the original amount of the mortgage for the whole term of the loan.
Freehold
An owner’s interest in land where the property and the land on which it stands both belong to their owner indefinitely.
Gazumping
If someone has agreed to sell you a property and then sells it to someone else for a higher price, you have been gazumped!
General Law Title
Old, complicated form of land ownership in form of chain of documents. Can be more than 100 years old and of historic interest.
Inclusions
Lights, curtains, blinds, ceiling fans, airconditioning units, flyscreens, TV antenna, dishwasher, rangehood, stove, fixed cupboards, clothes hoist or any other removable item that the vendor has agreed will be included in the sale.
Interest-only loans
Loan on which interest only is paid periodically and the principal paid at the end of the term.
Inventory
List of items included with a property for sale; usually furniture, furnishings and other removable items.
Investment
The purchase of an asset, such as real estate, with the ultimate goal of producing capital gain on the resale of the asset.
Joint tenants
Joint Tenancy is the equal holding of property by two or more persons. If one person dies, their share passes to the survivor/s.
Land tax
Value-based levy applied to some property (exemptions include principal place of residence).
Lease
A document granting possession of a property for a given period without conferring ownership. The lease document specifies the terms and conditions of occupancy by the tenant, including period of occupancy, rent payable, etc.
Leasehold
The interest in land of a person who owns a lease granted by a freeholder.
Liabilities
Your outstanding debts or what you owe.
Limited Title
Form or Torrens Title which applies to a property before it has been adequately surveyed.
Maturity date
The last day of the term of the home loan agreement. The home loan must then be paid in full or the home loan agreement renewed.
Mortgage
Legal agreement on the terms and conditions of a loan for the purpose of buying real estate.
Mortgagee
One who lends the money for the property.
Mortgagor
One who borrows the money to purchase property.
Multiple listing
System of selling the property through many agents.
Offer to purchase
A formal legal agreement which offers a specified price for a specified property. The offer may be firm (no conditions attached) or conditional (certain conditions apply).
Old System Title
Another old form of land title and also known as Common Law Title. Automatically converted to Torrens Title on the sale of a property.
Option to Buy
Legal agreement giving the buyer the right to purchase property at an agreed time and price.
Option fee
Usually one percent of price, is payable and forfeited if buyer does not go through with the transaction.
Party Wall
Wall separating two adjoining buildings and normally straddling the boundary.
Plan
This shows the ground plan design, elevation of house, number and size of rooms, kitchen, bathrooms and laundry layout, position of the house on the land.
Principal
The actual amount of money that has been borrowed to buy a property.
Private Sale
The seller does not engage an estate agent but acts on his own behalf, dealing directly with the buyer.
Private Treaty Sale
Sale of property via an agent through private negotiation and contract.
Qualified Title
Applies to some Old System Titles converted to Torrens Title which may not have been fully investigated.
Real Property
Land, with or without improvements.
Requisition of Title
The process in which the buyer of a property asks for written information about the title to a property from the vendor in addition to that supplied in the Contract of Sale.
Reserve price
Price below which an owner is not prepared to sell at auction.
Right of Way
Right of access across a property.
Rise and Fall Clause
This clause would be contained in a building contract. It provides for an upward or downward contract price dependant on movement of prices, wages or other factors specified.
Security
Property offered as backing for a loan. In the case of home loan money usually acts as the security.
Semi-detached
Two buildings joined by a common wall.
Settlement
Completion of sale when balance of contract price is paid to the vendor and the buyer is legally entitled to take possession of the property.
Sole agency
One agent or agency has the exclusive rights to sell a property.
Stamp duty
A State Government tax imposed on the sale of real estate. It is determined by the sale value, and it varies between states.
Strata Title
Most commonly used for flats and units, this title gives you ownership of a small piece of a larger property including ‘air space’. You have sole right to a particular unit and can lease, sell or legally dispose of your unit as you desire. You also have an undivided share of the common land. You also become a member of the Body Corporate which controls maintenance.
Stratum Title
This title gives you legal ownership over a piece of property and also gives you a share in the company set up to look after the common areas of the flats or units you live in. It does not include ‘air space’.
Survey
Confirmation of the property boundaries and improvements.
Tenancy in Common
Tenancy in Common is the holding of property by two or more persons, either equal shares or unequal shares. If one person dies, the property is dealt with in accordance with the law.
Term
The time length of a home loan. Payments made may not fully repay the outstanding principle by the end of the term because the amortisation period is longer. For example, a Fixed Rate Loan might have a five year term, but it will take 20 years to repay the loan completely. When a term expires, the loan is renegotiated.
Title search
The process of examining the land title to ensure the vendor has the right to sell and therefore transfer ownership. A title search details the names of the owners and other information about the property such as encumbrances or caveats on the title.
Torrens Title
System of recording ownership of property, also known as Certificate of Title. Most common and simplest form of title to property.
Town house
Two storey attached building, usually Strata-Titled.
Transfer
Document registered in the Land Titles Office recording change of ownership of a property.
Unencumbered
Property free of covenants or other restrictions.
Valuation
Assessment of the value of a property given in a written report by a registered valuer.
Variable rate loan
A home loan for which the interest rate changes as the money market changes. The payment remains the same, however the amount applied to reduce principal changes according to change in interest rate.
Vendor
Person offering a dwelling for sale.
Vendor Statement
Statement setting out particulars of the property, made by the vendor.
Villa
An attached dwelling usually single storey.
Zoning
Control of the use of land exercised by local authorities or the responsible planning authority. |
