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To help you during this process, we have complied a list of the most common (and often confusing) terms you may come across when selling or purchasing land.
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Glossary of Terms
Caveat – A legal claim registered on the property title by another person/entity who has a right to the property. A Caveat must be removed for in order for Settlement to occur.
Cooling-off period – A period of 3 business days from the time of signing the Contract. During this period the Purchaser may choose to walk away from the Contract without incurring financial penalty.
Deposit – A sum of money paid as an assurance that the Purchaser is serious about the purchase. The deposit will not be more than 10%.
Easement – A right of use that belongs to someone other than the landowner. This can include pipes and wires connecting services such as sewage, drainage and electricity. It may also refer to shared paths and driveways.
Encumbered – means that there is a Mortgage or Caveat registered on the title of the property
Lendee – The person/entity receiving a loan.
Lendor – The person/entity lending money, such as a bank.
Licence – A right given by a Vendor to a Purchaser which allows the Purchaser to live in or move their possessions into the property before Settlement has taken place. Rent may be charged in this period.
Licensor – The person/entity giving a licence.
Licensee – The person/entity receiving the licence.
Loan – An amount of money loaned to a person/entity that is not secured by a mortgage/right to the property.
Mortgage – An amount of money loaned to a person/entity and secured by claiming a legal interest in a property, as shown on the Certificate of Title.
Mortgagor – The person/entity receiving the mortgage.
Mortgagee – The person/entity providing the mortgage.
Penalty Interest – When a Purchaser delays a Settlement or cannot meet a deadline set by the Contract, Penalty Interest may be charged by the Vendor on the outstanding amount.
Permit – Permission from a Government Authority, such as the Council, to modify a property, such as adding an extension or removing a large tree.
Residue – The difference between the Purchase Price and the Deposit.
Restrictive Covenant – A restriction on the Title of the Property that regulates the way the property is used by compelling the owner to do something or restricting them from doing something. This may include building in accordance to design guidelines, using certain materials such as brick or mason in construction or not planting a certain species of tree.
Settlement – The date on which the title documents and funds will be swapped between Purchaser and Vendor. This process will transfer the property to the new owner.
Special Conditions – Any conditions which are outside the normal conditions imposed on a sale of land.
Statement of Adjustments – A document that shows the division of certain costs between Vendor and Purchaser, for instance, rates, water and rent collection. The Vendor is obligated to pay expenses and is entitled to income up until and including the day of Settlement – after Settlement this obligation swaps to the Purchaser.
Subdivision – The process of dividing one piece of land into multiple pieces.
Subject to Finance – A clause in the Contract that states that the purchaser must obtain finance of a certain amount by a certain date, otherwise they are released from the Contract.
Section 27 / S27– Early Release of Deposit Authority.
Section 32 / S32 – The Vendor’s Statement.
Transfer of Land (Document) / T1 or T2 – The document that must be given to the Title’s Office to effect the Transfer of Land.
Transfer of Land (Process) – The change of ownership of land from one person/entity to another.
Unencumbered – There are no charges on the title of the property, such as a Mortgage or Caveat.
Purchaser – The person/entity buying land.
Principal Place of Residence Statutory Declaration / PPR – The document that states that the property will be the property you live in.
Zoning – The classification outlining the use of the land, such as Residential or Industrial.
Vendor – The person/entity selling the land.
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There is A Lot To Know. We Make It Easy For You. To help you during this process, we have complied a list of the most common (and often confusing)…Read more