Law Terminology Explained

Variations to the purchase price to reflect the buyer and seller’s payment obligations. For example, outgoings are adjusted so that the seller is responsible for outgoings until the settlement date and the buyer is responsible for outgoings afterwards.

Manages the common property of the strata title scheme and is made up of the individual owners. Administrative tasks are often provided by a contracted management company. Also referred to as owners corporations or strata corporations in some states.

The property in a community titles scheme that is not owned by any individual owner. For example, the stairwells, gardens or swimming pool.

A formal document to record the terms and conditions of sale when you buy or sell a property. In some states seller disclosure documents must be attached to the contract or in a separate vendor statement.

The legal part of buying or selling a property. You should use a lawyer to buy securely and transfer the legal ownership of the property to you.

Terms and conditions regarding the property often in the form of a deed or recorded against the title that may restrict the use of the property. For example, building covenants that allow only certain types of houses to be built.

An amount payable by the buyer to the deposit holder (the sales agent or seller’s lawyer) usually at the time of signing the contract to secure the purchase. The deposit should generally be no more than 10% of the purchase price. The deposit is released to the seller after settlement.

A right of a person or authority to use or have access over part or all of the property. For example, an easement for access along a shared driveway or an easement for stormwater drainage.

Where a piece of property (for example a fence or part of a building) hangs over the boundary line of another person’s property.

An encumbrance is something that burdens the property and could lessen its value. For example, a mortgage over the property or an easement and covenant on title.

An exchange is the name given to the event when the contract has been formed once both the buyer and seller have signed the contract (or counterparts of the contract). Once a contract has been exchanged both parties are bound by their obligations in the contract. This is also known as offer and acceptance in WA.

As defined in Section 4 of the Foreign Acquisitions and Takeovers Act 1975 and including a person who is not ordinarily resident in Australia.

Charges by the body corporate payable by a property owner to cover the communal administration and maintenance costs.

The ratio of the loan amount comparative to the value of the property (usually the purchase price) often expressed as a percentage. For example if you buy a property for $1,000,000 and borrow $800,000 then your LVR is 80%.

Regular costs associated with a property such as rates, water, and levies.

Inspection of public records and information from government or local authorities.

The event when the purchase price is paid by the buyer in exchange for a transfer of the title to the property together with any release of mortgage. The buyer’s and seller’s lawyers (or their representatives) attend settlement along with the incoming lender and discharging lender. This usually occurs at the office of the discharging lender.

A form of ownership particularly for multi-level apartments or townhouses. Also referred to as community title in some states.

Regulation of the use of property by local authorities to plan the development of certain areas. For example a property could be in a residential or commercial zone and any development of that property would need to comply with the town planning laws relating to that zone.