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Ph (03) 9600 1111
Fax (03) 9278 8830
Level 9, 365 Queen St
Melbourne, Vic 3000
Australia
Southbank Central
Inspect at
191 CityRoad Southbank
Melway: 1D M6
Mon - Sat, 10am to 5pm
Sundays 12 to 5pm |
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News & Editorials
Every week Central Equity writes a number
of news editorials which appear in Melbourne newspapers. This weeks article is posted below.
Click here
to access our archive of news editorials
9/12/00
THE
LANGUAGE OF REAL ESTATE
(Part 1)
When
undertaking property negotiations and acquisitions, it is important
that we understand the language and terminology, which is being used.
Below are common terms used:
FREEHOLD TITLE:
Freehold title is a description of the highest and best quality form
of ownership of land under Victorian and Australian law. It is basically
another way of saying "absolute ownership".
Freehold title is granted under the Transfer of Land Act in Victoria.
Freehold title goes on forever without time limit on ownership, compared
to leasehold title, which is a limited title under certain terms and
conditions, and subject to time restrictions.
FIXED PRICE:
It is essential when a residential property off the plan that is it
fixed price. If buying an apartment, then the purchasers should only
pay deposit of 10% and the balance of 90% on completion of the development.
The total amount should be the same as contracted for initially. Unless
the purchasers has instigated any changes acceptable to the vendor
such as the inclusion of air conditioning.
PROGRESS PAYMENT:
If purchasing a detached dwelling off the plan the purchasers is normally
required to make progress payments to enable the builder to pay for
their suppliers and contractors during construction. Often in these
contracts, there are provisional allowances, provisional sums and
provisional costs which are used to provide sums of money for colour
selection, in ground costs and services which can often mean the purchasers
are paying additional amount of money. Two typical examples would
be the selection of a more expensive brick not included in the original
selection, the other example is cost of removing rock in the ground
when doing the footings for the new but not allow for in the original
contract. It is therefore essential to beneficial to avoid these allowances
where possible by fixing the price prior to contract signing. When
one is making progress payment, obviously you have to assess to the
funds to enable you to do this during construction.
Where there is no progress payments, you would only have to pay at
the end, upon completion of the development.
RENTAL GUARANTEE:
Rental guarantee is the rental fees paid to the purchaser once the
property is completed and handed over, which is the settlement time.
Central Equity¹s rental guarantee should be a realistic return based
on the real market value, subject to change of market value. Developers
have different terms, so it is important that purchasers do their
homework.
Until the agents find a tenant, the rental guarantee is paid up the
agreed months offered by the vendor. This is encouraging for the purchaser
in terms of financial commitment. Central Equity¹s apartments are
very well rented and in fact there is a shortage of Central Equity
apartments available to rent. Therefore, it is not difficult to find
tenants. Perhaps the only lead time is assessing the application of
the tenants, as it is in the interest of both the owner and the body
corporate.
Central Equity¹s wholly owned subsidiary property management company,
Melbourne Inner City Management (MICM), only looks after Central Equity¹s
developments and is committed to provide after sales service including
leasing, resell, property management.
INNER CITY LIVING:
Categorically, there are 4 types of apartments available. The premium
price range, service apartments, student housing and the "mainstream"
apartments. Central Equity¹s developments are the mainstream apartments,
which is priced typically between $200,000 - $500,000. Many of the
purchasers of these apartments are predominantly owner occupiers.
It makes sense to purchase these apartments, because of the reasonable
price, as the resell opportunity is greater compared to a premium
priced property in the event of the need to dispose the property.
PLAN OF SUBDIVISION:
The plan of subdivision is the plan under which a large parcel of
land or building is divided into smaller parcels of land or smaller
sections of the building.
The plan of subdivision defines exactly what each lot or parcel of
land or building is and therefore what each person who buys a lot
will end up owning. It defines the boundaries and position of the
lot.
Once the plan of subdivision has been confirmed and registered, each
lot forms the freehold title, which you purchase.
Click
here
for the archive of Central Equity editorials
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1/12/00
25/11/00
18/11/00
11/11/00
4/11/00
28/10/00
13/10/00
13/10/00
6/10/00
7/07/00
23/06/00
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 for other articles please visit our archive.
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