When you first look at a contract of sale it can be a bit daunting. Some apartment contracts of sale are over 200 pages long and it is difficult to know what to look for. Also different sections and certificates are just consecutive with no header pages so it can be hard to know where one certificate finishes and the next one starts.
Quick disclaimer: This is not advice, nor is it written by a qualified solicitor and you are strongly encouraged to seek professional legal advice when purchasing an apartment.
Let’s break down a Victorian contract of sale to help you understand it a bit better.
The contract of sale is one document, but in Victoria comprises 2 parts.
- The Contract of Sale
- The Vendors Statement (or Section 32)
- Contract of Sale
This is the front part of the document and is the actual contract which details who is selling what to who, and all the particulars of the sale such as price, deposit, settlement date, and any other conditions like finance approval. It also includes both special and general conditions which are legal terms and conditions of the sale. These don’t make for interesting reading and are generally not specific to the actual apartment.
There will be a guarantee form so if you are buying in the name of a company or trust you will be asked to sign a personal guarantee.
- Vendors Statement
This is also known as a Section 32 (which is Section 32 of the Victorian Sale of Land Act 1962) and requires the Vendor to disclose lots of things about the property. The most important things for you to review are:
- The Council and Water Rates and any land tax
- The certificate of title which for apartments includes the plan of subdivision.
- The owner’s corporation (OC) certificate
The council and water rates are pretty straight forward and just give an overview on how much each of them are.
The certificate of title and plan of subdivision can be lengthy especially if there are many apartments or multiple plans of subdivisions and planning agreements that attach to the title. The only thing you really need to do here is check what you think you are buying is on title by identifying your apartment plus any other areas like the car park(s) and storage cage(s). Any more detailed analysis is best left to experts.
The owner’s corporation certificate is helpful to apartment buyers and should be read in full. It includes minutes of the most recent OC annual general meeting which gives you important information and an insight to the quality of the OC committee and management. It also includes details about the sinking fund (if there is one) and other current issues.