Rules of Thumb for Purchasing a Property
By Samuel McMahon
10 July 2018
Property is one of the most significant investments you can make. Given the huge amounts of money involved, it is only sensible to have professionals manage the process for you. However, you too have a role to play in making sure everything goes smoothly.
Good advice is only going to benefit you if you take advantage of it. This applies whatever your purpose for the property is: to live in, to let out as an investment, to run a business, or to develop.
Get advice before you sign a Contract
The most important point to be made is that you need to get advice before you sign a contract, not afterwards. Whilst you may be able to get out of the contract within a cooling-off period under limited circumstances, in most cases you will either not have a cooling-off period at all or else not have sufficient time to consider properly the advice received, and act on it, before the cooling-off period expires.
Pay attention to the details
The second important point is that when you get advice, you need to read it properly. If you engage a lawyer to act for you in a conveyance, you will receive a letter of advice about the provisions of the contract. Many people may choose to skim over this quickly without paying attention to the details. But it would pay to stop to think about the potential consequences of each individual point of the advice you are receiving.
Measure twice, sign once
One standard warning is to ensure that the measurements of the property are correct. Often they are. But every now and again they are not. This can have huge consequences not only for the use of the property but also for its value. Our litigation department has recently handled cases where:
- A purchaser signed a contract to purchase a warehouse which had measurements less than what he had believed at the time of signing the contract. The result was that the warehouse had less capacity and was not suitable to be used in the way the purchaser had intended.
- The dividing fence with a neighbour was somewhere other than the boundary of the land. Accordingly, the measurements on title were not reflected on the ground. Building plans and permits which had been prepared in reliance on the title measurements therefore could not be put into practice.
Both of these situations could have been avoided easily if a surveyor had taken measurements prior to the contract being signed.
Can I be compensated?
In some cases compensation may be able to be sought. In other cases, you may be unable to claim compensation based on the facts of your case. Normally you, as the purchaser, need to take care to make sure what you are purchasing is what it seems to be.
Even if compensation can be sought later, nobody wants a purchase of property to become a source of litigation and a drain on his or her time, energy and money. So put the extra time and attention into your purchase before you sign, not after.
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