There is a series of questions, which are asked when discussing the contractual side of the transaction. Listed are some of the most commonly asked questions and corresponding answers.
The purchaser has conducted an inspection of a property prior to settlement and has discovered that the vendor has removed the light fittings and curtains that were there when the sale was made. What course of action is available?
The vendor has an obligation to deliver the property, including the chattels, in the same condition (wear and tear excluded) as when the contract of sale was signed. Removable chattels should be noted in the contract to ensure that they remain. Compensation will be the most appropriate remedy in this situation. Purchasers do not have the right to deduct any sum for the replacement of items included in a sale from the settlement funds.
The dishwasher was not included under the heading of chattel in the contract. Is the dishwasher a fixture?
If the dishwasher is built into a kitchen fit out and connected to a water source, it will be regarded as a fixture. Additional factors to be considered when dealing with this include whether the tiling in the kitchen covers the space under the dishwasher or whether the dishwasher was previously under the kitchen bench, or built into the cabinetry.
Must the vendor provide a copy of the property’s certificate of occupancy?
The vendor is under no obligation to provide a certificate of occupancy.
Settlement is due and the vendor is unable to obtain an original Certificate of Title as the Land Registry has misplaced it. What will the purchaser do?
If the purchaser is in a position to accept title they will have the right to issue a rescission notice. This enables termination of the contract within 14 days if settlement has still not occurred. Obviously, most purchasers would not want to do this.
If a purchaser is faced with this situation they should ask the vendor to contact the Land Registry to issue a new certificate. The purchaser can claim from the vendor reasonable expenses incurred as a result of the delayed settlement. If there is unpaid rent owed on a property, can a purchaser claim the amount owing?
The purchaser was never entitled to these funds. If the tenant remains after settlement, the purchaser would be entitled.
The purchaser has given the agent a signed contract for execution by the vendor. If more than seven days have passed and the purchaser hears nothing from the agent as to whether or not the vendor signed the agreement, will the purchaser still have the right to a cooling-off period?
The purchaser’s right to a cooling-off period expires three to five days after they sign the contract. However, if the vendor is yet to accept the offer, the purchaser may withdraw the offer.
After signing the contract the vendor requested an earlier settlement. The purchaser agreed but at the last moment was unable to make settlement. The purchaser was able to settle on the original date set for settlement. Is the purchaser obliged to pay penalty interest?
Where an earlier or later date is agreed and confirmed between the parties, either in writing or orally, the new date becomes the settlement date. Failure to settle on that date, therefore, constitutes a breach of contract and penalty interest may be payable.
The purchaser was late settling. What expenses can the vendor claim?
This will depend on the terms set out in the contract. However, in the case of a typical contract, penalty interest is generally charged at 12 per cent to 14 per cent of the outstanding amount. Vendors may also claim for other damages suffered. Courts have generally rejected claims for extra interest paid on bank bills or on a mortgage and additional fees paid on a loan.
Settlement has been delayed for two days as a result of the vendor’s default. Is the purchaser entitled to claim penalty interest?
Penalty interest is payable on overdue money. None will be payable because the vendor does not owe any money.
The vendor has not fenced a swimming pool on the property they sold. Does the purchaser have any rights?
The purchaser will be required to fence the pool within 30 days of settlement or be in breach of the regulations, and may be fined by the local municipality. The purchaser becomes responsible for any requirement to comply with building regulations.
Where should settlement take place and at what time may the purchaser settle?
The vendor may nominate the location and time of settlement provided it is reasonable. If the vendor has a mortgage over the title, the settlement will usually take place at the bank.
A title search reveals the existence of a caveat lodged over a piece of land. Should a prospective purchaser insist that the vendor provides the withdrawal of the caveat?
All such dealings must be removed for the new transfer to be lodged on title.
A purchaser discovers a tax liability affecting the land. Should an apportionment of land tax be calculated for the settlement process if the purchaser intends to use the premises as a principal place of residence?
The purchaser will become liable for the apportioned unpaid land tax. The fact that the land will be used as a principal place of residence will not affect the previous tax liability. If the property remains the principal place of residence, the land tax liability will not apply in future years.