What does section 88k of the Conveyancing Act mean for you?
When you think about real estate you think of it as something that’s yours, or something you have the right to use.
What are easements, covenants, etc?
Section 88k is a provision that allows someone to force you to grant them an easement or some other rights over your land.
We have considerable experience defending these cases and/or negotiating favourable settlements.
We recently successfully defended an easement application against our client in the Supreme Court in Nahata v Robertson [2023] NSWSC 642. The Applicant, Mr Nahata, was demanding an easement. The Court found in favour of our client, Mr Robertson, and refused to grant the easement.
These are the most common ones. However, at the time these are made you can impose restrictions, for example to their size, where they are on the land, when and how the land can be entered to build or maintain them, etc. It pays to think this through when these are created because these rights over your land will stay with the land so when you sell it the new owner will have to honour these rights. Depending on what the rights are it may affect the value of your real estate.
We treat your property the same way we would treat our own. We are able to advise you on:
There is a lot of strategy around this so it is worth consulting a lawyer first. This is because you can often get the developer to pay your legal fees. However, it is not advisable to negotiate the details of this with them immediately as they may make a low ball offer or offer a restricted arrangement which is not suitable that you may then inadvertently agree to. It is best to simply tell them you will consult a lawyer and come back to them.
It is a good idea to think about whether you want to grant them and easement, and if not, why not. If so, what would you want in exchange? Having a clear idea of the outcome you want will allow the appropriate strategy to be formulated.
In NSW if you waive the cooling off period and you don’t go ahead with the contract then you will usually need to pay 10% of the purchase price. For a $1,000,000 purchase that means you lose $100,000.
In some cases it is not possible to buy with a cooling off period (for example auctions). Care needs to be taken when you are applying for finance because if finance does not come through, you will lose your deposit if you cannot complete the purchase or if you pull out for any reason.
The agent is always keen to sell with a section 66W certificate – which is a certificate provided by a solicitor saying that you agree to waive the cooling off period. It is best not to do this, unless the contract has been reviewed beforehand and you have arranged finance.
Agents are very skilled when it comes to sales. They don’t appear always to be salespeople – sometimes it feels like this particular agent isn’t like the others and isn’t a salesperson but genuinely cares. In years of experience all agents give this impression, which is what makes them very powerful salespeople.
Real estate agents are amongst the best salespeople around – and with commissions up to 3% of the property price (for a $1,000,000 property that’s $30,000), you can see why it is attractive and they would want to push as many sales as they can. To make $100,000 per year they only need to do 3 or 4 sales each year! Having said that, they are not bad people, they just want to earn a living. If they make no sales they make no income.
When you feel your emotions are starting to come out, then you know you are being sold. Be it the fear of missing out. Be it falling in love with the property and imagining you and your family growing up there and making a life there. When these emotions start to come out, you are being sold.
Stamp duty is a state tax on transfers of certain property – the most well-known being when land or property is sold. The buyer has to pay the stamp duty and it can be quite high. There is a calculator to work out what your stamp duty will be on the office of state revenue website. Here is the link:
https://www.apps08.osr.nsw.gov.au/erevenue/calculators/landsalesimple.php
Stamp duty is calculated based on the purchase price and it is payable within 3 months of exchange of contracts but must be completed before settlement. You can’t change the registration of the property into your name until the stamp duty has been paid.
This is when you sign the contract. To have a binding contract both the buyer and seller need to sign it. What happens is the buyer signs one copy and the seller signs a different copy and they swap with each other – so the buyer has one signed by the seller and the seller has one signed by the buyer.
You pay the deposit at ‘exchange’ and pay the rest at settlement, which is usually 42 days later.
It’s the day the buyer pays the balance of the amount owing and now owns the property and can move in if they like.
Exchange is when you sign the contract and settlement is when the balance is paid and the sale is finished.
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