Soooo important
How important are property records anyway? You would think by the way many people have no idea where their property records are - that they have little value at all. But the opposite is true!
Lets take a look at some documents and why they are important.
Title
Proves ownership of the property. You can do a title search online from $25. Your conveyancer or solicitor will do this as part of the conveyancing process. Land titles office in NSW and VIC in Australia sold for over $2B each so I guess the title information is valuable!
Building Approval
Buyers will often ask the seller for proof of building approval (or permit) for improvments on the property. Except for repairs and minor maintenance, most works do require approval. Ask your building inspector to advise you what improvements have been carried out at the property (including the original buildings) and then have your conveyancer or lawyer request a search of local council records for records of what approvals have been issued. Often the information only states what work was approved, the date of approval and the approval number. Sometimes the search will reveal if the approved works had the necessary inspections during construction including the final inspection. In Australia the final inspection is often known as the Form 21.
WARNING: Unauthorised building work is usually uninsurable. So if your property had a large extension and there was a fire and it burnt down, the insurer could refuse to pay the claim.
If you are selling a property and you have copies of approvals, Form 21 and approval documentation (plans, specifications, soil test etc) its best to provide these to the Selling agent.
Planning Approval
Many building works require planning approval. Planning approval often comes with a long list of conditions relating to this like the permitted use, hours of operation, visitor car parking, disabled access and more. The permitted use of the land can have a big effect on the value. E.g. Planning approval for a 10 storey apartment building with shops can make the property worth multiples of a standard residential site.
Pool Safety Certificate
In some states of Australia you require a Pool Safety Certificate if you own a property with a swimming pool or outdoor spa bath. There are significant penalties for properties that do not have a compliant pool safety barrier. In Queensland the Pool Safety certificate MUST be provided to the buyer after a contract to purchase has been signed OR else the Purchasor MUST agree to obtain a Pool Safety certificate within the prescribed timeframe.
Contract of Sale
The contract for the sale of the property is a key document that sets out the parties, the terms of the agreement and rights and responsibilities of the signatories to the agreement. A contract of sale for property will always show the date of the contract was entered into, the agreed sum, any deposit paid, a settlement date and any special conditions.
Entry condition report
A document that clearly sets out the agreed condition of the property at the commencement of the lease. This document is needed at the end of the lease to allow a comparison to the exit condition.
Lease agreement
If the property is being leased then there will be a lease agreement between the property owner and the tenant. The agreement sets out the terms of the lease such as start and finish dates, lease payment amount, rent reviews, improvements, maintenance, renewals and more. These are a key document and will be critical should a dispute arise between the parties.
Building inspection report
Completed by a Building inspector, this inspection report will detail the presence of major defects and safety hazards. In Australia the report should be strictly in accordance with AS4349.1 when it relates to residential property and AS4349.0 for non-residential property. The report helps the owner to understand the condition of the property and prioritse necessary repairs and maintenance.
Pest inspection report
Completed by a Timber Pest inspector, this inspection report will detail the presence of timber pests including subterranean termites, borers of seasoned timber and fungal decay. In Australia the report should be strictly in accordance with AS4349.3. The report should detail the type, location and extent of any activity or damage together with a list of risks conducive to pest damage. Comment should also be made on the presence of a compliant and current termite management system. Having the history of pest management for the property is important in regions where timber pests are common.
Valuation
A sworn valuation from a registered valuer gives an opinion of the properties improved value and details of the property. It also has comparable sales of other similar properties in the area.
Warranties
Appliances and building products like roof sheeting and pool equipment will have a manufacturers warranty. Sometimes these warranties need to be registered. Some components, like a termite management system may require an annual inspection by a company technician to maintain the warranty. Some warranties like roofing can be 25 years, so you need long term storage of the warranties.
Manuals
Air-conditioning, Hot Water system, Dishwasher and other appliances have operating instructions. You need these to make sure you are using your appliances properly and taking care of them so they last as long as they should. Almost all manuals are available online but its handy to have these on hand to share with a property manager, tenant or new owner.
Quotes
Quotes from Builders and tradespeople for improvements and maintenance are useful to define the scope of works, payment terms and delivery dates. These are useful for future reference and trades/suppliers can be added to your contacts. Quotes provide a reference point for assessing the value of future work.
Will
A will is a legal document. A person can decide allocation of their property upon their death. It will usually name one or more persons as beneficiaries. The executor is also named and will be the one to manage the estate until its final distribution.
The gold standard
Its best to upload all available records to inndox. When you sell you can share inndox with prospective buyers so they can confidently make an offer on the property in the knowledge that the property has a good set of records making it easier to take over and manage.