Adverse Possession

This is an old doctrine that says where an intruder onto land remains in possession of the land for a period of time (generally 15 years) then that person acquires ownership of the land.



Appraisal is just another term for valuation, but is used instead of the word valuation because estate agents are not permitted to provide true valuations on real estate. Only an accredited valuer can provide a genuine property valuation.



An auction is a form of sale where potential purchasers make competing offers or bids with the person offering the highest bid being declared the purchaser.


Bait Pricing

This is a trick that involves marketing a property at a price that is lower than a price acceptable to the vendor. Estate agents using bait pricing tell vendors that it will attract more buyer interest in the property. Any form of marketing that involves ‘invented’ figures is fraudulent.


Body Corporate

A body corporate comes into existence when a plan of subdivision, allowing the creation of a body corporate, is registered at the Land Titles Office. Owners of the lots specified on the plant of subdivision become members of the body corporate.



A caveat is a means by which a Certificate of Title at the Land Titles Office can be ‘tagged’ to show that someone has an interest in the property. A caveat prevents the Registrar of Titles from registering another interest against the title without first giving notice to the person who lodged the caveat. Generally speaking, once a caveat has been lodged against a property, nothing else can be lodged against the property without the consent of the person who lodged the caveat.


Certificate of Occupancy

As the name implies, the Certificate of Occupancy certifies that a home can be lived in. It is a requirement of most local government or shire councils that an occupancy certificate be issued prior to the purchaser of a home taking occupation.


Certificate of Title

Certificate of Title is a person’s record of interests and rights affecting their land. It is issued by the Registrar of Titles to the person entitled to its possession, usually the registered proprietor, mortgagee or chargee.

The Certificate of Title shows the date the certificate was created, plus all registrations and recordings made in the Register at the time. This includes the name(s) of registered proprietor(s) and other interests such as mortgages, covenants and caveats.

Registrations in the Register have a government guarantee.



The planning authority ‘certifies’ a plan of subdivision when it is satisfied the plan is in compliance with all the requirements. Upon certification the plan of subdivision is lodged at the Land Titles Office.



Commission is the way in which estate agents are paid for their services.


Common Property

This is the land on a plan of a subdivision that does not form any of the lots, but is the subject of shared ownership by the lot owners as members of the body corporate. Common property may take the form of land, air space, space below the ground or buildings.


Company Share Scheme

This was the first type of ‘unit’ development. While it appears to be similar to a strata unit development, it is really quite different.

A Company Share Scheme is when a company, incorporated specifically for the purpose, is the registered owner of the all the land and the whole of the building in the development. Being a shareholder in the company gives a person the right to occupy a particular portion of the building.



Conditions are the ‘rules’ of the Contract of Sale. They tell the parties who is responsible for what, the dates by which things must be done and what will happen if things are not done as agreed. Conditions take the form of General Conditions (which are standard inclusions in most contracts) and Special Conditions (which are inserted in particular contracts by one or other of the parties. It is important the estate agent is never permitted to draft or insert special conditions into the contract).


Conflict of Interests

A conflict of interests occurs when a person who has a duty to act in the interests of a client also has a duty to act against the interests of that same client. A conflict of interest also occurs when a person who has a duty to act in the interests of a client is in a position where he/she may be tempted by money or some other motive to act against the interests of that same client.


Contract Note

The Contract Note is similar to a full contract of sale of real estate, but is a shortened form of it. The difficulty for the vendor and the purchaser is they must have access to a full version of the contract of sale to find out exactly what terms and conditions govern the sale. This is where assistance and legal advice from a lawyer becomes particularly important.



The Legal Practice Act 1996, Section 326, states a conveyancer refers a person, other than a current (legal) practitioner or registered (legal) practitioner, who carries on a business in the course of which conveyancing work is carried out directly or indirectly for fee or reward. Conveyancers attend to the clerical work associated with conveyancing matters, but are prohibited from performing legal work or giving legal advice. Conveyancers are not regulated, are not required to carry insurance and are not required to comply with trust account rules. Industry commentators have expressed concern about unregulated conveyancers bringing the industry into disrepute.


Cooling Off

Section 31 Sale of Land Act provides a statutory cooling off period which allows a purchaser to terminate a contract within three days of signing it. The purchaser is then entitled to a refund, less $100 or 0.2% of the purchase price, whichever is greater.

A purchaser may cool off where:

  • the land is other than land used for industrial or commercial purposes
  • the sale was not by public auction
  • the contract was not signed within three business days before or after a publicly advertised auction
  • the parties have not previously had a contract of sale of the same land
  • the purchaser is neither an estate agent nor a body corporate
  • the purchaser did not receive independent advice from a lawyer before signing the Contract
  • the purchaser has delivered written notice of the cooling off to the vendor or the vendors’ agent at the address stated in the contract within the three business days



A covenant is a way in which the use of one person’s land can be controlled by another and is commonly used to protect the amenity or value of an area. A developer, for example, could prevent the building of front fences, the parking of heavy vehicles or the building of low-quality homes in a new estate by placing a special condition in the Contract of Sale, requiring the purchaser to register a restrictive covenant on the new title.
A deposit is an amount of money, usually 10 per cent, paid by the purchaser to secure the contract of sale. Generally, if the purchaser repudiates the contract, the deposit will be forfeited.



Disbursements are the out-of-pocket costs associated with a matter, as opposed to the legal costs charged for the service being provided. For example, in a conveyancing matter the legal costs include checking of the contract and preparation of documents. Disbursements include the amount paid to the Land Titles Office for the title search and amounts paid to rating authorities for certificates.


Dual Occupancy

Dual occupance is the term used to describe a subdivision where a house block is subdivided so as to enable an additional dwelling to be built on it. A dual occupancy development involves at least a two lot subdivision.



An easement is a right that allows one person’s land to dominate another person’s land by exercising some right of the dominated land. The land that benefits from the easement is called the dominant land, while the land affected by the easement is call the servient land. An easement is an encumbrance and will usually appear as a registered easement on the title, but unregistered easements do exist, and can arise as a nasty surprise after a contract has been signed.

Common examples of easements are the right of a farmer to move cattle along a path across a neighbour’s paddock, the right of water authorities to run sewerage pipes across suburban properties and the right to use a private carpark.



This is the term used to describe a claim that one person has against another person’s land. It is important to remember that an encumbrance is against the land and not the owner of the land. This means that if the land changes hands, the new owner takes both the land and encumbrances attached to it. If the encumbrance takes the form of a debt, then the owner of the land may not be able to sell it until the debt has been paid. If the encumbrance takes the form of a restriction of the owners use, then action can be taken against the owner if the restriction is breached. Similarly, if the encumbrance takes the form of a right that another person has (eg. a right to use a path across the land), then action can be taken against the owner of the land if that right is interrupted.


Exclusive Sale Authority

This is the document by which an estate agent is able to exclusively secure the vendor, the property being sold and all persons who enquire about the property for a set period of time, and then indefinitely until the vendor cancels in writing.


Fidelity Insurance

Fidelity Insurance protects the clients of professionals against theft or misappropriation of funds by the professional person or an employee while the client’s funds are under the control of the professional person. Conveyancers are not required to carry fidelity insurance and few conveyancers do. Simply put, if your lawyer had a secret gambling problem and took the proceeds of your property sale to a casino and lost it, there would be little point in trying to sue the now bankrupt lawyer. However, the lawyers compulsory fidelity insurance would cover the loss.


Finance – “Subject To Finance”

Signing ‘subject to finance‘ simply means the purchaser is not yet sure as to whether their home loan has been approved by the bank and wants to be able to cancel the contract if the bank fails to approve their loan application.


First Home Owners Grant

In order to offset the effects of GST on first home owners, the Commonwealth Government introduced the First Home Owners Grant – a scheme involving the making of a once only payment to eligible applicants. The grant is not means tested, nor is it affected by the value of the property purchased.


Fixtures & Chattels

Fixtures are things that are permanently attached to the land so as to become part of the land. Chattels are things that are not part of the land. When land is sold, all fixtures (the house, and things permanently attached to the house) will pass to the purchaser as part of the land. If a chattel is to be included in the sale, it must be specifically listed in the contract. If a fixture is to be removed from the property by the vendor and therefore not included in the sale, then this must be specifically mentioned in the contract.



Fraud is gaining of an advantage by improper or unfair means. At present, fraud is a major problem in the real estate industry.



Many buyers are hurt because of a practice known as gazumping. Here’s what happens: You find the home you love and you verbally agree on a price. Later, the agent says someone else wants to guy the home. How could this happen? It’s quite simple – somone else offered more money. You have been gazumped. Sometimes you are given the chance to match or better the increased offer. Other times, you get no chance because the home is sold and you have not been asked if you would be prepared to pay more.


General Law Land

This is land that is not under the operation of the Transfer of Land Act. Ownership of General Law Land is determined by examination of the ‘chain of title,’ a collection of documents showing that the land has been transferred from one person to another over many years. A chain of title must show every dealing associated with the land for the past 30 years if good title is to be established. These days, the purchase of any General Law Land must be converted so that the land is bought under the operation of the Transfer of Land Act.



A home is full of memories. The word ‘home’ is a positive word. When you think of home you think of all the dreams, the fun and the great times. Your home has special feelings. From the scent of the garden to the way the sun enters your favorite room, your home triggers wonderful thoughts.



This is the term used by lawyers to describe what the clients wants done. However, it goes beyond this. Taking instructions is not just a matter of doing as the client directs. The proper taking of instructions requires the lawyer to use his or her legal knowledge and skills to ensure the client is in a position to make the best decision. This is part of the lawyer’s fiduciary duty. After finding out what the client wishes to do, the lawyer will advise the client as to the legalities involved and the options available to the client as the client pursues his/her goal. A client is entitled, not only to make the final decision, but also to be in a position to make the best possible decision, based on the best possible advice. Only after the lawyer has listened, considered, advised and then been told which direction the client wishes to take, can the lawyer regard him/herself as having been properly instructed.



Neil Jenman was born in England to Australian parents. He grew up in the 1960’s in Wales, England, Ireland, the Caribbean and finally Australia. He worked on outback cattle stations and cut sugar cane in North Queensland before taking a job as an office boy in a real estate office in the coastal town of Heppoon in 1973. His career took him to Sydney, where he opened a real estate office in the suburb of Auburn in 1984. The office was such a resounding success that, in 1989, Neil began sharing his ideas with other agents. In 1993, Neil sold his real estate business to concentrate full-time on writing and presenting sales and management courses within the real estate industry.

His methods – which focused on ethics and client care – became known as The Jenman System. By 2000, several thousand real estate people had attended Neil’s courses and more than 300 managers and 1200 salespeople subscribed to The Jenman Group’s training services. But Neil’s public comments, especially about the typical industry treatment of both clients and staff, created enormous controversy. Although even his fiercest industy critics acknowledged the quality of his training courses, the more he spoke about consumer protection, the less popular he became with agents. During the property boom, Neil increased his warnings for consumers. He toured the country presenting a three-hour consumer lecture, The Inside Secrets of Real Estate. More than 65,000 people, from Darwin to Hobart, came to see him speak. He also fought several public battles with property spruikers on behalf of investors who had been ripped off.



Here’s how kickbacks work: You get a sales spiel from your real estate agent about how lots of advertising is needed to sell your home. You are told that you have to pay for it. You are then charged the full rate for advertising, but the agent receives the discount rate. For example, the full rate for a big glossy advertisement may be $1,700, the discount rate is $1,050 and the agent pockets $650. The bigger the advertising budget, the more the agent gets. Often agents can scam thousands of dollars from just one home-owner.


Licence Agreement

Sometimes a purchaser may wish to occupy the property before settlement or a vendor may wish to continue to occupy the property beyond settlement. A Licence Agreement is a simple contract whereby one party grants another party the right to occupy the property. The difference between a licence and a lease is that a lease is a form of ownership of the property for a period of time and the lessee is entitled to remain in occupation for the period on the lease. The licence, on the other hand, can be revoked at any time. If the licence is revoked, the occupier must leave the property and rely on whatever remedies are provided for in the licence.



This is a term used to describe the arrangement between a vendor and an estate agent, whereby the agent is appointed to act on behalf of the vendor to sell real estate. Estate agents rely on a contract called the Exclusive Sale Authority to bind the vendor, the property and all enquirers, to the agent.



A lot is simply a separately identifiable piece of land, part of a building or air space, that is created when a plan of subdivision is registered.



A mortgage is basically a scheme or an arrangement whereby one person borrows money from another and promises to pay the money back in return for offering land as security for the loan. The offer of land as security becomes an interest in the land for the lender. The land itself becomes encumbered by the mortgage. The lenders’ rights over the land are formally recognised by way of registration on the title at the Land Titles Office. When the loan is repaid, the lender provides the borrower with a Discharge of Mortgage. This document is then registered at the Land Titles Office to discharge (cancel) the mortgage. The person who offers the mortgage to the lender is known as the mortgagor and the lender is known as the mortgagee.



Negotiation involves conferring or discussing matters with another person with the view of reaching some form of compromise or agreement. To be effective as a negotiator, your representative must be well informed about the rules and laws associated with the matter under negotiation and must have precise instructions as to their capacity to negotiate on your behalf. A real estate lawyer is a qualified lawyer, has professional indemnity insurance to cover the legal advice offered during negotiations and has experience not only in real estate negotiation, but also in various other forms of negotiation (including pre-court negotiation and advocacy).


Off the Plan

This term describes the sale of land that does not yet exist as a separate lot. The land is described as a proposed lot only. The vendor of an ‘off the plan’ lot is obliged to complete the subdivision process or building of units and to have the lots individually created through registration of the plan of subdivision.



For the average consumer, the term ‘offer’ has a simple and straight-forward meaning. However, when applied to the law of contract, if has a very specific meaning. Once your offer has been accepted by the vendor, the contract is binding.


Pre-contract Legal Advice

Advice provided by a qualified lawyer prior to the singing of a contract to buy or sell real estate. By obtaining pre-contract legal advice a consumer is able to consider what matters should be investigated before deciding to buy, what responsibilities have to be fulfilled before selling and what special conditions may have to be inserted into a contract to protect his/her interests.


Price Ranges

Also called a ‘buyer enquiry range,’ this is a trick that involves the invention of two figures: one much lower than the vendor intends to accept, and the other much higher than the vendor expects the property to make. Purchasers are expected to make offers somewhere in between the two false figures. Any form of marketing that involves ‘invented’ figures is fraudulent.


Professional Indemnity Insurance

Professional indemnity insurance is held by a professional person to ensure that any claims of professional negligence made against the professional person can be met. To put it another way, there is not much point in suing a professional person if they do not have enough money to pay for your loss – so professional indemnity insurance comes in to cover the cost.



This is the term used to describe amounts payable to the local council and the water authority for services provided to a property. Rates are adjusted on a pro-rata basis, together with any other outgoings that are payable as a consequence of land ownership.


Registerable Documents

These are documents, usually collected at settlement in return for the payment of the balance of the purchaser price, that are lodged at the Land Titles Office to transfer ownership of the property to the purchaser. They must be properly signed or endorsed so as to allow registration.


Requisitions on Title

These are a series of questions formally served on the vendor of a property by the purchaser, by which the purchaser discovers any issues relating to the title (i.e. the right or capacity of the vendor to legally sell the property). Requisitions often include a variety of other questions that are not related to the title and can run to several pages. Many lawyers now replace the right to submit requisitions on title with warranties in the Contract of Sale.


Section 173 Agreement

A Section 173 Agreement is an agreement between a planning authority and the owner of real estate. It usually starts as an agreement between the authority and the developer of an estate, whereby certain works are supposed to be completed, but is then registered on title. This means the obligations and/or restrictions imposed by the council on the developer continue to bind the new owner of the land.


Section 27 Deposit Release Statement

Section 27 of the Sale of Land Act says the deposit paid by a purchaser on the purchase of real estate can be released prior to settlement in certain circumstances.


Section 32 Vendor’s Statement

This is a statement given to the purchaser by the vendor prior to the signing of a Contract of Sale. If the statement is not provided prior to signing of the contract, the purchaser may have the right to cancel the contract.



Settlement is the term used to describe the moment when all parties involved in the sale of real estate meet together and exchange documents and cheques to complete the matter. Often there are four parties at settlement: the vendor, the vendor’s mortgagee, the purchaser and the purchase’s mortgagee. Usually each of these is represented by a lawyer or other representative. Settlement normally takes place at the office of the party who holds the Certificate of Title (generally a bank). Documents and cheques are examined and confirmed as being in order, exchanged, and the parties leave. That’s all there is to settlement.


Stamp Duty

This is a government charge incurred by the purchaser of real estate and payable to the State Revenue Office prior to lodging the Transfer of Land at the Land Title Office. It is usually paid by the purchaser’s lender after settlement with funds retained from the loan moneys. If there is no lender involved, a cheque will be obtained from the purchaser and paid to the State Revenue Office by the purchaser’s lawyer.


Subject to Finance

Where the purchaser has not yet received formal home loan approval and wants to be able to end the contract in the event that the home loan is rejected, the contract can be made ‘subject to finance.’ This means a condition is added to the contract that allows a fixed period of time by which the home loan must be approved. If the home loan is not approved then the purchaser may elect to end the contract. Purchasers should always ensure the finance condition is drafted by their lawyer or at least with advice from their lawyer. It is often the case that estate agents draft finance conditions that the purchaser can’t help but breach the terms and risk losing the deposit.


Transfer of Land

This is the document by which the vendor and the purchaser direct the Registrar of Titles to transfer ownership of the property from the vendor to the purchaser. It may also direct the Registrar to include a covenant or other encumbrance on title.



A valuer is a professional person whose role it is to determine the current market value of a property. Valuers are tertiary trained and accredited by the Australian Property Institute (API).


Vendor Bid

This is a bid placed by the auctioneer on behalf of the seller/s (vendor/s).
It is a tactic used to try and stimulate bidding or bring finality to an auction before the property is passed in.
Victorian legislation prohibits ‘dummy bidding,’ but allows ‘permissible vendor bids.’