Selling an Investment Property: Know Your Legal Obligations

Maddalena Romano — Mon, 27 Feb 2017 14:54:24 +0000

While property has the capacity to generate an income for the investor, there may come a time when you, the investor, wish to cash the investment in and move on. What happens then, if the property you wish to sell is currently tenanted? More specifically, what are your legal obligations to the tenant in these circumstances?
Section 71A of the Residential Tenancies Act 1995 (SA) requires that the owner of the property advise the tenants by way of a written notice that they intend to sell the investment property. Furthermore, they must advise of this intention no later than 14 days after entering into a sales agreement. It follows then, that the property would not be able to be advertised for sale until after this period had lapsed.
In relation to terminating the tenancy, if the event that the lease is for a fixed term, the owner must wait out the fixed term period as specified in the lease agreement. Even though the lease has an end date, the property owner must still give the tenant at least 28 days written notice prior to that date. If notice is not given the agreement will continue as a periodic tenancy
If the lease is periodic, the general expectation is that the owners give the tenants 90 days written notice to end the periodic agreement, unless it falls under one of the following exceptions.
• The property is to be lived in by the owner;
• The owner has planned to undertake major renovations;
• Demolition of the property is planned; or
• The property has been sold and the contract stipulates that it must be vacant at settlement.
In the case that an exception to the general rule can be identified, then the property owners may give the tenants 60 days written notice to end the periodic lease. Therefore, once the property owner signs the contract for sale they may issue a written notice for 60 days.
The appropriate form of written notice is the Form 3 Notice of Termination which is provided by the Australian Business and Consumer Services.
In any event, the property owner should ensure that all requirements of the written notice as set out under Section 91 of the Residential Tenancies Act 1995 (SA) are adhered to. For example, it must be in writing, be signed and state the name of the premises subject to the tenancy.
Confused? Uncertain as to what your legal responsibilities are? It is prudent to seek advice from a solicitor in the event you wish to sell an investment property occupied by tenants. A solicitor is best equipped to provide you with appropriate advice offering you the peace and mind that you are meeting your legal obligations. For advice on property law or tenancy agreements please contact Maddalena Romano or the team at Welden & Coluccio Lawyers.

Small But Oh So Important: “Certificate of Title”

Maddalena Romano — Sun, 20 Mar 2016 23:19:49 +0000

What is a Duplicate Certificate of Title and why is it important?

A Duplicate Certificate of Title is the official document evidencing ownership of real property. The face of the document includes a description of the property, who holds ownership and any liens, encumbrances or easements which may be held over the property. The Duplicate Certificate of Title is identified by a Volume and Folio Number and there is never more than one Duplicate issued at any one time.
In the event that the real property is sold to a new owner, the physical document needs to be evidenced by the Lands Titles Office and updated. It is for this reason we signify the importance of the Title as a property cannot be transferred from one entity to another without the physical document being presented.

Therefore, it is important that you know where your Title is at all times.

Where is my Duplicate Certificate of Title and what happens if I have lost it?

If you have a mortgage over your property your Duplicate Certificate of Title will be held by your Bank as security for that mortgage. In the event that you pay off your mortgage, it is likely that the Bank will formally discharge it and release the Duplicate Certificate of Title to you. It is advised that you keep the document somewhere safe and that you inform your executor or attorney of where the document can be found in case something were to happen to you.
In the event that you have lost your Title, a formal application needs to be made to the Lands Titles Office to issue a new one. This application is an official document which requires the registered proprietor to swear a statement identifying what they know of the movements of the Title and all attempts they have made in order to retrieve or find the lost Title. Prior to submitting this application it is a requirement, by law, that an advertisement be put in the State Newspaper for the lost Title and the application cannot be submitted until 7 days after the advertisement. In all of the steps to have the Title re-issued there are fees involved.

If selling your house and you do not know where your Title is, it is crucial that you advise your agent or conveyancer who can initiate the above process immediately. Increasingly, most financial institutions will not settle unless they have a physical title. Therefore, a lost Title may significantly hold up settlement of your house and put you at risk of defaulting your sale contract. A default in your sale contract could attract ramifications to you such as paying interest to the purchaser.

In any event, buying or selling real property is a significant event, therefore, it is prudent to seek advice from a solicitor. A solicitor is best equipped to provide you with appropriate advice. For advice on property law in general, please contact Maddalena Romano or the team at Welden & Coluccio Lawyers.