How to use a property lawyer

by: Annabel Sheppard, partner. First published in Informed Investor Magazine, Autumn 2022

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Disclaimer
The information in these articles is general information only, is provided free of charge and does not constitute legal or other professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article - including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.

Specialist property lawyers can save you thousands - or help you get out of a sticky situation.

Property law is a complicated game and the documentation needed and the hoops to jump through are constantly changing.

New-build and turnkey contracts are more commonplace than they were 15 years ago. Increasingly, first-home buyers are the ones signing new build contracts because they're missing out at auction to more experienced buyers.

The contract puzzle

This means, for a high percentage of the market, their first foray into the property world doesn't mean buying a house - it means buying a drawing and a stack of clauses written in near-indecipherable jargon.

Despite new-builds being in an abundance are anything but a "one-size-fits-all."

This is where a specialist property lawyer can be an invaluable asset to your team.

Every property is different, and the same goes for contracts. Contracts are loaded with needless jargon that becomes second nature to someone who's reading them day-in and day-out and while it can be a barrier to buying a smart investment property, it doesn't need to be.

A lawyer will help you negotiate the jargon fodder and they'll explain the ins and outs, and help advise you of any sticky clauses you might not know to look out for.

Make clauses work for you

Where possible, your lawyer will assist with changing any clause necessary to make the contract work better for you. A lawyer can help you redraft certain clauses so you're not trapped into a property or signing up for a contract that will be cancelled on you.

A lawyer is the go-between for communications between you and the developer, and they have a lot more arguing power when it comes to negotiation.

Of course, there's no guarantee any developer will agree to the changes you make, but that's okay.

The most important thing here is the buyer is fully informed of everything they're signing up for.

You've got to have the right information, so there are no surprises!

At settlement time

Come settlement time, your lawyer will make sure you've had all the correct property inspections to check you're actually getting what you signed up for - before handing over the final sum.

Big sums of money need to be handled with care, and lawyers can make sure the transaction between accounts is seamless. The usefulness of a good property lawyer is even across the board for all types of properties: existing, land, renovations based and new-builds.

Existing properties come with their fair share of contractual problems, and they can also come laden with potential structural issues, too. If it all goes wrong here, you could walk into a property with expensive problems. This is a big factor for renovations-based investors, who rely on being able to transform a property so they can ratchet up the rent and boost equity.

Sometimes the worst-case scenario is feeling like you've paid too much money, which can take all the excitement out of your purchase. Other times, it means you're paying out extra money for unforeseen repairs or coming up against restrictions in the title which halt any renovation plans.

What about cost?

Cost-wise, in some situations the choice to use a specialised lawyer, as opposed to your run-of-the-mill lawyer, might leave you facing a higher bill, but that will depend on the extra due diligence or work that needs to be done. If you go for the cheapest option, you're not necessarily going to get the same service or the desired outcome.

Property is a huge asset so why wouldn't you want to make sure the product is fit for purpose and that you're fully informed?

What to ask

The 5 questions you shouldn't be afraid to ask your lawyer:

  • How much experience do you have?
  • What team do you have working with you?
  • How available are you?
  • Ask for an estimate for costs (There will be a range.)
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Disclaimer
The information in these articles is general information only, is provided free of charge and does not constitute legal or other professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article - including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.