Unfamiliar Section 32 conditions

[defecta]

Hi guys,

We are looking at a property that has some terms in the Section 32 that I am not familiar with and am looking for advice. We have only been dealing with our conveyancer via email so far but maybe I should be directing these questions to her dealing with someone who is qualified to give advice.

Below are the points from our conveyancer that has me concerned.

• There is a service company which affects the property with Share numbers 601-700 allocated. If you are intending to purchase the property at auction I would suggest that you provide your lender with a copy of the Contract & Section 32 to ensure your lender doesn’t have any issues with the fact a service company is involved where a Charge will be registered on Title. The Charge registered on the Title is required to be noted prior to your Bank’s mortgage.
  
• Special Condition 6 of the Contract states that penalty interest is 4% higher than the current penalty interest rate of 12.5% per annum. Please note that penalty interest is only charged if you are unable to settle on the due date. In addition the vendor is entitled to charge you for any further losses in the event you are unable to settle on the due date (see special condition 7)
  
• Rates & Owners Corporation fees are as per item 3(a) of the Section 32, plus user pay charges for water usage, etc
• The Yarra Valley Water certificate discloses that the property is part of a development which is serviced by a private water/sewer infrastructure. In the event of any maintenance works/repairs on the private extension being required, the cost will be paid for by the unit owners. The certificate further discloses that the unit does not have its own separate water meter, and therefore usage charges are proportionally divided amongst the unit owners

My questions are

• What 'The Charge' registered on the title means and why a bank would be concerned by it?
• What is deal with the penalty interest mentioned?
• Why is it 4% more than the 12.5% she mentioned? Because they can?
• How was the current penalty interest rate of 12.5% arrived at? Is it a predetermined amount set by a governing body or is it a figure someone plucked out of the air?
• Who is charging it?
• Are the water conditions common or anything we should be wary of?

Thanks in advance.

 

[Aaron_C]

Is this a serviced apartment or an apartment on company title? It smells like it.

 

[Terryw]

Hi guys,

We are looking at a property that has some terms in the Section 32 that I am not familiar with and am looking for advice. We have only been dealing with our conveyancer via email so far but maybe I should be directing these questions to her dealing with someone who is qualified to give advice.

Below are the points from our conveyancer that has me concerned.

• There is a service company which affects the property with Share numbers 601-700 allocated. If you are intending to purchase the property at auction I would suggest that you provide your lender with a copy of the Contract & Section 32 to ensure your lender doesn’t have any issues with the fact a service company is involved where a Charge will be registered on Title. The Charge registered on the Title is required to be noted prior to your Bank’s mortgage.
  
• Special Condition 6 of the Contract states that penalty interest is 4% higher than the current penalty interest rate of 12.5% per annum. Please note that penalty interest is only charged if you are unable to settle on the due date. In addition the vendor is entitled to charge you for any further losses in the event you are unable to settle on the due date (see special condition 7)
  
• Rates & Owners Corporation fees are as per item 3(a) of the Section 32, plus user pay charges for water usage, etc
• The Yarra Valley Water certificate discloses that the property is part of a development which is serviced by a private water/sewer infrastructure. In the event of any maintenance works/repairs on the private extension being required, the cost will be paid for by the unit owners. The certificate further discloses that the unit does not have its own separate water meter, and therefore usage charges are proportionally divided amongst the unit owners

My questions are

• What 'The Charge' registered on the title means and why a bank would be concerned by it?
• What is deal with the penalty interest mentioned?
• Why is it 4% more than the 12.5% she mentioned? Because they can?
• How was the current penalty interest rate of 12.5% arrived at? Is it a predetermined amount set by a governing body or is it a figure someone plucked out of the air?
• Who is charging it?
• Are the water conditions common or anything we should be wary of?

Thanks in advance.

these are questions you pay your conveyancer to anwer.

1. The charge seems to be something which gives the service company an interest in the land which may take priority over a mortgage. This would be something that a lender would not be happy with.

2. Penalty interest is charged to you when you go over setltement date.

3. because they can - you can negotiate this down of course.

4. 5. Becaue they are trying to get as much out of you as they can. The figure is something out of thin air.

6. Vendor will be charging you.

7. be wary.

 

[defecta]

Is this a serviced apartment or an apartment on company title? It smells like it.

Negative. Its just an old 2 storey block of 8 units from the 60s.

Thanks Terryw. This conveyancer came recommended from a friend who used her for their house purchase recently but so far I can't say I'm happy with her advice. She has hardly provided any insight or any explanation of anything. Even when asked.

Might be worth looking for another conveyancer perhaps? She is just a conveyancer and as such I don't think she is qualified to give any legal advice.

 

[Wise1InOz]

Let me know if you want details of my lawyer. She was very good and provided a very detailed report helping me understand the our sale contract, including suggestions on what special conditions to get rid off... I doubt very much we could have gone this far had it not been for her!

 

[defecta]

Let me know if you want details of my lawyer. She was very good and provided a very detailed report helping me understand the our sale contract, including suggestions on what special conditions to get rid off... I doubt very much we could have gone this far had it not been for her!

Thanks Wise1InOz. Did you use her for all your conveyancing as well? Do you mind telling me what you pay for her services? I just would like to know what to expect. I understand if you would rather not say. (or PM me)