Whether for investment or residence, the purchase of a unit or townhouse may be one of the most expensive purchases you ever make.

Remember, buying a home unit or townhouse is more complex than buying a house. You not only purchase the property but also take on a relationship with other owners and the governing body corporate committee.

On purchasing the property, you will:

• own the dwelling itself and share the ownership of common areas such as lifts, stairwells, and front entrances with other owners, and
• become a member of a body corporate which is regulated by fairly complex rules.

The Body Corporate

The body corporate is made up of all of the unit owners. It decides issues about the common property, concerns of owners, and maintenance of the complex.

Owners regularly contribute money to the body corporate to pay day-to-day ongoing expenses and anticipated long term costs.

If you wish to be involved in body corporate decisions, you may seek election to the committee at the annual general meeting. Larger bodies corporate are normally managed by a Body Corporate Manager who attends committee meetings.

The Contract

The transfer of ownership of property from seller to buyer is called conveyancing. In the case of units and townhouses, this transfer is governed by the Body Corporate and Community Management Act 1997.

A standard contract for the conveyancing of units and townhouses, the Plain English Unit and Townhouse Contract (3rd edition) 1998, was developed by the Queensland Law Society and the Real Estate Institute of Queensland.

Special Points To Note

Under the contract, buyers:

• must be informed of certain matters before they sign the contract, e.g. their annual contributions to the body corporate, and
• must receive certain warranties from the seller, e.g. that there are no hidden or obvious defects in the common property.

The seller can avoid having responsibility under these warranties by listing any defects or liabilities in the contract.

If defects and liabilities are not disclosed in the contract, the buyer may cancel the contract and recover any money paid under the contract.

Seek Advice Before You Sign

Don't sign the contract until you have the advice of your solicitor who is experienced in conveyancing practice.

No standard contract can deal with the individual circumstances of every transaction. For instance, your conveyance may require the addition of special clauses to cover unique circumstances or matters of particular concern such as flooding, pest, or termite damage.
Ask the agent to fax a copy of the draft contract to your solicitor.

After seeking legal advice:

• sign the contract
• pay the deposit (usually 5-10% of the purchase price) on the date of contract
• apply for finance.
  

Your solicitor will investigate the title, liaise with your financier, arrange settlement, receive the keys, and keep you informed at all times.

Selling Your Unit Or Townshouse

When your real estate agent finds you a buyer, you will be handed the standard contract.
Before you sign the contract, your solicitor will advise you on:

• the need to disclose details on any defect or outstanding liabilities
• the disclosure statement
• your obligations to any existing tenant
• capital gains tax, general tax implications, and estate planning
• if necessary, an extension of the date of settlement to suit your needs.

During the conveyance, your solicitor will:

• ensure all outstanding government charges have been paid
• arrange repayment and legal discharge of any mortgages on your property
• check that all documents you are required to sign are in order
• ensure that you are paid in full.

Doing It Yourself

You do have the choice of doing the conveyance yourself, but you do so at your own risk.
Solicitors are conveyancing experts who may also need to draw on other areas of law for your particular circumstances. As each property is different, so is each conveyance.

Legal Costs

The conveyancing market is competitive so ask your solicitor up front about the costs of the conveyance. Remember, the cheapest is not always the best.

Be sure to obtain a copy of your solicitor's Client Care policy. It will tell you how your conveyance will be handled.

Government Fees

• When Buying: There are standard State and Local government charges such as stamp duty, search costs and document registration fees. Ask your solicitor for an estimate of these. You will be eligible for a stamp duty discount if you will live in the unit. If you are purchasing for investment, speak to your solicitor about the tax deductibility of the interest component of mortgage payments.
• When Selling: You are obliged to give clear title to the buyer. Your real estate agent will charge a commission on the sale and there may also be bank or building society charges to consider.

For further details refer to the Queensland Law Society's legal guide, A Guide to Buying and Selling a Home.

Need A Solicitor?

If you do not already have a solicitor, contact the Queensland Law Society's Referral Service on 07 3842 5842 for a referral to a local solicitor, or click here.

Disclaimer

The information on this web page is merely a guide and is not meant to be a detailed explanation of the law. Ray White Port Douglas Pty Ltd recommends you see your solicitor about particular legal problems or find a solicitor by contacting The Queensland Law Society - Tel: (07) 3842 5888, Fax: (07) 3842 5999, Email: info@qls.com.au.

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