Putting in an Offer: Chattels, GST, and Signing the Agreement (Part 3)
Apartment Specialists Podcast No: 130
This is part three in the series about putting in an offer when buying apartments. The third part shows insights regarding Chattels, GST, and signing the document. Learn more from this video.
Good day, making an offer on Apartments part three. The first part, we went through the first page of the sale and purchase agreement. The second part, we went through the terms and conditions, which goes up to 17, as well as putting in your own conditions. Now, we are going to go through the chattels part, GST and signing the document.
Here we go. We will just go through that now and up to that further terms of sale where you put the extra conditions in. You can see the full conditions that we looked at one of the broadcasts that I think you should always put in. Then you come down to the chattels. Schedule 1, List of all the chattels included in the sale.
You should get provided a chattels list when you are purchasing the property. That should be in the information kit. For example, what is included in that document and why I always put in this clause here, ''The vendor warrants that all appliances, light fittings and outlets will be in good working order prior to settlement."
You should always have this even though in the sale and purchase agreement, it says that all chattels are in good working order; But let us face it. If a washing machine is not working, are you going to go to Court to fight the vendor to make sure it is working. The thing is the cost of a washing machine is going to be less than the actual cost of you to engage a lawyer and go through that process. That is why I always put it in so that means at the pre-settlement inspection you can always check all the appliances to make sure they are all working.
You basically want to go through the chattels. You want to have a separate list. That is ideal because it gets really confusing. These will include the blinds, curtains and drapes. I do not even know the difference. Yes, people can describe differences but it gets very confusing, so you want to have a separate chattels list.
For example, this is what we put. This is not standard but, 'A full chattels list was supplied to the purchaser in the property information pack' and we generally get someone to initial that, or it will be provided to the solicitor within three working days on top of that. It is better to include it, make sure you go through all the chattels and then put in that clause.
On another note, you can see what is also involved is, 'What is the difference between a chattel and a fixture.' A chattel is something that a vendor can decide what comes with the property and what doesn't. For example, a TV and a couch. It is what can be moved around, and a mirror, but a fixture is something that is attached to the property. A good way of describing it is, 'Will it damage the property or will it change the property's overall character if it is taken away.'
If that mirror is stuck and embedded into the wall, it is a fixture. If it is hung on the wall, it is a chattel. I hope that helps. I had a really interesting case come up the other day where and this has nothing to do with Apartments. But it has to do with whether they had a home out the back. And the home out the back did not have plumbing hooked up. It was just on blocks so it was not connected. The person thought that when they purchased it, they got the home out the back. But they did not because it was not attached to anything. Interesting one.
Anyway, the next one is, we go through to GST. If GST's involved in here and you see the numbers in here and the things you've got to do. There is GST involved in the purchase and you're told things like 'Going concern', you're told things like 'Hotel leases' and things like that.
That should raise alarm bells. A. because there is a very confusing form involved. Even accountants get confused by this. Yes, the real estate agent will explain it through to you, but it is very very important that you make sure. If you are getting involved in this that you are putting, 'Subject to your Accountant's approval.' This is very very important.
What I am not going to explain the GST because it is quite a chapter in itself, and there are so many different factors involved in it. How do I put it is not just a blank form approach, it changes with different circumstances. Then you come down to obviously the signature of the vendor and the signature of the purchaser. Obviously, if you are the purchaser you will sign here.
If there is two of you, you will sign here and obviously the vendor signs etcetera. All through the document it pays also to initial things. If I go through the whole document, where you've got the price, if there's a change in the price when you're going through negotiation, you'll initial it. You know the address and all that kind of thing, all the particulars. Where it comes under 'Vacant possession,' you'll initial it, that kind of thing. That's what you should be doing.
Then we will go back to the last page. This actually is not part of the contract, but to make it easy for everybody. You should be filling in your purchaser, your name, your contact details and who your lawyer is. If you do not know a lawyer, you should ask your agent if they can recommend a couple of lawyers. And they need to do a lot of Apartments, so they understand Unit Titles.
This is more important because often for example, I had a lawyer say to me, "Look, I don't know what to do, I'm in Hamilton and there aren't any Apartments in Hamilton. I haven't conveyed them." Then I had to explain to the purchaser who was the lawyer's client, "Look you need to get a different lawyer because he was stopping everything."
I hope that helps to give you a bit of an idea of understanding the sale and purchase agreement when you go to put in that offer. Remember you do not have to know it inside out. An agent should, when they do explain this all through to you again and having the conditions in, 'On your solicitor's approval' and all those kind of things. Gives you the confidence to know other than obviously what you're going to pay for the property, you're doing all the right things to be looking after yourself.
Anyway, talk soon and if you have any questions, put some questions in below or just flick me an email, [email protected]