Buying a rural property - Stacks conveyancing & property lawyers
Buying a rural property? To ensure you’re covered in all situations that could arise, engage the services of a full-spectrum law firm like Stacks, rather than just a conveyancer. Our team has years of experience handling the conveyancing for rural property purchases.
Whether you intend to live there, manage a farm, or use the property as a weekender, owning a rural property can be extremely rewarding. While the actual process for buying rural property is similar to buying a house elsewhere, you do need to consider a few additional things.
It is important that you carefully inspect the property and that you have an experienced conveyancing expert look over the contract before you commit to buy. There may be some issues that the vendor is not obliged to tell you about. A thorough inspection, and some careful questions, may help to uncover them.
If you’re purchasing a farm or agricultural property, the transaction will often involve more than just the transfer of the physical land and buildings. A rural sale often includes crops, livestock, plant and machinery. These should be listed on the inventory attached to the contract, along with the livestock’s PICs (Property Identification Codes). It may also be worthwhile to obtain financial advice regarding the apportionment of these assets to the purchase price.
Agricultural leases or agistment agreements may complicate rural property sales. While similar to a standard lease, an agricultural lease allows a person or corporation to use the land for produce farming, primary production or harvesting. Agistment agreements are also a useful mechanism to manage long periods of drought – they enable stock to be grazed on more fertile pastures without the costs of buying additional land.
A Stacks Law Firm conveyancing expert will be able to advise you about some of the pitfalls involved in purchasing rural property. We can recommend, and carry out, particular searches on the property that may reveal issues you should be aware of.
Some issues to consider when buying rural property:
- Access to the property - You need to make sure you have both a legal AND practical means of access to the property. It could be that the original Surveyor’s plan included a road to access the property, but that in reality, that road is just an overgrown track which is inaccessible. Make sure you can actually get to the property, legally.
- Enclosure permits - You need to find out if the property has Crown roads running through it. In that case, the owner will generally rent those roads. An enclosure permit allows the owner to enclose a Crown road or watercourse within the property by fencing.
- Water security - You need to make sure you have reliable access to water. Water access rights and entitlements vary depending on your land use, where you want to take water from and what you want to do with it. Some approvals and licences are transferred with the land, while others remain with the previous landowner (or occupier). Subdivided lands and easements can also complicate your water access rights. You need to make sure you can reliably access and use water without the risk of unknowingly committing criminal or regulatory offences.
- Native vegetation - The Native Vegetation Act sets out what you can do with vegetation on your property such as clearing and farming. If you intend to farm the land, you’ll need to first find out if there are any issues that may prevent you going ahead.
- Mining - You’ll need to check whether the land is subject to any mining licenses or applications.
- Noxious weeds - You should find out if there are any weed problems on the property, or whether there are any weed control notices in force.
- Multiple parcels of land - Rural and agricultural properties are often comprised of multiple parcels of land. The sale contract must be carefully prepared to ensure that the land and registered entitlements are listed and property identified. Each parcel must be identified by title as shown in deposited plans, crown plans and/or title maps.
- Tax and stamp duty - You should consider the impacts of goods and services tax (GST), capital gains tax (CGT) and any potential liability for stamp duty when buying a rural property. Exemptions to these taxes do apply in limited circumstances, particularly for the transfer of farmland between family members. However, you should seek financial advice to ensure the purchase or transfer does not fall into a non-exemption category.
What are the steps involved in buying a rural property?
- The Contract
We will explain the Contract to you, ask the Vendor’s solicitor to make any necessary
amendments and have you sign the Contract. - Inspections and reports
- Pest Inspection Report - We recommend that a qualified Pest Inspector thoroughly check any buildings or other structures, including fencing, on the property. This will give you information about any damage such as termite infestation.
- Building Inspection Report - We recommend that a qualified Building Inspector thoroughly check the property to let you know its structural condition.
- On-site sewerage treatment system Inspection - We can arrange for Council to inspect on-site sewerage treatment system at the property to let you know whether the system is working properly or if Council requires any works to be done.
- Council Building Certificate - We can arrange for Council to inspect the property to let you know whether or not the house has been approved or if it has any concerns.
- Finance
If you are borrowing money to help buy the property, we will need to give your finance provider copies of certain documents. We can contact the person you have been dealing with in order to avoid unnecessary delays in getting your finance approved. - Deposit
Normally you will need to pay 10% of the purchase price to the Vendor’s real estate agent before we commit you to buy the property. Sometimes an agreement is reached for a smaller deposit to be paid. If you are not able to pay a deposit, please contact our office to discuss the option of paying a deposit by way of a Deposit Bond. - Exchange of contracts
Once all of the above matters have been dealt with, we will confirm with you that you are happy to proceed. If you are, we will exchange the Contract signed by you with the Contract signed by the Vendor. Then the property is off the market! - Between exchange and settlement
During this period (usually 4 – 6 weeks) we will conduct enquiries into the title of the property
you are buying. Several of these enquiries are to Council, the Local Land Services and the Water Authority (if applicable) to ascertain whether or not rates are paid up to date. We will prepare a Transfer and arrange for it to be stamped by the Office of State Revenue before Settlement. We will also be working with your finance provider (if applicable) to ensure that everything is in order for settlement to take place on the appointed day. - The last week before settlement
We will calculate the amount that you owe the Vendor (including a daily adjustment for any
rates and levies together with any other agreed allowances) and make arrangements to collect
the money from you and your finance provider (if applicable). You will be able to have a final look at the property to make sure everything is in order before we complete your purchase. We will remind you about this as settlement gets closer. You should then contact the agent to make a time to go back to the property for a final inspection. If everything is in order, we will make arrangements for your purchase to be settled. If there are problems with your final inspection that the agent cannot resolve, let us know and we will contact the Vendor’s solicitor to work things out. - Settlement
Today is the day you will own your new rural property! Once we have searched the title one
last time, we will attend settlement and ensure that the correct title and transfer documents (correctly signed by the vendor) are handed over. Then we will give the Vendor’s Conveyancer the balance of money owing on the property. As soon as we return to our office, we will call you to let you know that settlement
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