Exchange – A formal legal process that creates a binding contract for the sale of real estate on agreed terms. The vendor and purchaser each sign a copy of the sale contract and then “exchange” these documents, at which time the contract becomes legally binding on the parties. The parties are then bound to proceed to settlement, subject to any cooling off period that may apply. A deposit is paid by the purchaser to the vendor during the “exchange” process. Any party that unilaterally declines to proceed to settlement may forfeit deposit monies or be subject to a damages claim.
Cooling Off Period – Under legislation, most purchasers of residential property are granted a “Cooling Off Period”. This period commences on the day of exchange and expires at 5:00pm on the fifth working day after exchange. Within this period you are able to withdraw from the contract with a small penalty of 0.25% of the purchase price.
Settlement – This is the final stage of the sale when the purchaser completes the payment (“settlement”) of the contract price to the vendor and takes legal possession of the property.
Once an exchange of contracts has taken place and the cooling off period has expired, your solicitor will conduct a number of searches and enquiries to verify that all is in order with the legal title of the property. At the same time, you will need to finalise your financial arrangements with your lending institution. The settlement process usually takes four to six weeks. For un-registered land, settlement is usually 21 days from the date of registration. Both you and your solicitor will be notified when registration has occurred, you can then organise a suitable settlement date within that 21 days.
Development Application – A “development application” is a request for permission from Council to carry out proposed development – e.g. Construction of new building or structure or the sub division of land.
Linen Plan – A “linen plan” is drawn up by a surveyor for the land subdivision. This is approved by the council and then the Land Titles Office in order to create a legal title to a piece of land. It contains information for all of the land in that subdivision, dimensions of lots, roads, easements, covenants, etc. Once finalised it becomes known as the Deposited Plan or D.P. Every lot of land is contained within a Deposited Plan.
Lodgement of Linen Plan – Once all the development works are completed and the linen plan has been approved and signed off by the local Council, it is sent to the Land Titles Office in Sydney for registration. This process generally takes between 6-8 weeks, although sometimes it is quicker.
Registration – When the Land Titles Office approves the linen plan, the land is registered and returned to the Vendor’s solicitors so settlement can be processed.
Land Titles Office – (LTO) The Land Titles Office maintains a secure, efficient and guaranteed system of land ownership for NSW. The land title registry defines the legal ownership and boundaries of land parcels throughout the State, both private and public, and records ownership changes as they occur.
Easements – is a section of land registered on your property title, which gives an entity the right to use the land for a specific purpose even though they are not the land owner. An example is drainage easements for sewer or water. An easement gives the authority to enter your property to maintain the infrastructure.
Covenants – A covenant is a restriction on the use of the land imposed by a Council and/or developer to ensure that development on each lot meets the specific design and land use guidelines. The wording of the covenant(s) is shown on a separate legal document (sometimes called an “88B Instrument”) attached to the Deposited Plan. Covenants may include but are not limited to restrictions of building floor size and height, materials used, fencing etc. They are imposed to ensure properties are built complimentary to the neighbourhood and existing residences.
88B Instrument – A legal document supporting a Deposited Plan (DP) which provides details of any restrictions such as easements or covenants affecting a particular parcel of land. The document contains information in accordance with Section 88(b) of the Conveyancing Act 1919.
Building Envelopes – are generally positioned on lifestyle blocks and is the portion of land that can be used for improvements. Houses, shed, pools and even tennis courts must be built within the allocated building envelope. The building envelope is usually stipulated by Council or a State Government authority and generally can not be altered.
Stamp Duty – The tax imposed by state governments on certain contracts (e.g. Contracts of Sale and Registered Leases). The amount of tax payable is calculated as a percentage of the contract value.
Current Stamp Duty Concessions – Periodically the State Government will offer Stamp Duty Concessions that either reduce or eliminate the payment of duties. Refer to the Office of State Revenue website or ask your agent for current concessions.
Land Management Plan – Is a descriptive document prescribed by Council to ensure the land owner adopts certain land use practices. Usually associated with lifestyle blocks, they may include practices such as tree planting, non-livestock zones, etc.
Tree Preservation Orders – A Tree Preservation Order is a document adopted by Council that is intended to ensure the protection of the existing trees.
DCP – The Development Control Plan provides for principles, objectives and controls that ensure quality outcomes for rural, urban and village areas.
The aim of the DCP is to encourage innovative and creative land development solutions which facilitates urban consolidation and innovation in housing choice. In so doing, it promotes a better mix of housing, shopping and community services.
The DCP is based on sustainability principles that focus on water, energy saving and waste minimisation controls. It also focuses on fostering quality urban design and built environment outcomes, thereby promoting safer and cohesive communities. The DCP emphasises the need to protect heritage values as being integral to creating a sense of community.
The DCP is a document written and controlled by the local Council and is approved by the State Government.
LEP – A Local Environmental Plan (LEP) is a legal instrument that imposes standards to control development. LEPs are also used to reserve land for open space, schools, transport or other public purposes as well as controlling advertising and to protect trees and vegetation. The purpose of a LEP is to achieve the objects of the Environmental Planning & Assessment Act 1979. A LEP generally comprises a written document and accompanying maps. It is the over-arching document of a DCP.
Special Conditions – Special Conditions are provisions of a Contract that may not be in the General Conditions of Contract. In the event of an inconsistency, these Special Conditions of Contract shall take precedence over the General Conditions of Contract to the extent of that inconsistency.