We already know that conveyancing in Australia is the process of transferring property ownership from one entity to another, and a property conveyancer is a licensed individual who will handle the end-to-end process. Some of the terms that you will encounter in conveyancing are settlement figures and settlement adjustments. Here are some of the things that you need to know:
- Settlement figures refer to the computation of the actual amount of money that will be handed over at settlement. In general, the seller pays for all expenses. He/She is also entitled to any rent income until settlement. As for the buyer, he/she is in-charge of paying for expenses and entitled to get any rent income after settlement.
- Settlement adjustments enable parties to make up for the expenses of each other that may be paid for in advance.
- Adjustments in water usage will depend on where the property is located. In areas where the local council supplies water, usage and charges are normally part of the rates notice. In some cases, water is supplied by a third party. But no matter who the supplier is, the seller is in-charge of paying for all water consumption and charges computed until settlement.
On the part of the buyer, he/she needs to order a special water meter read that will enable them to calculate the water consumption and charges that the seller needs to pay until settlement. This amount will be deducted from the amount payable by the buyer to the seller through adjustment. In this way, the seller’s share of the water usage is already pre-paid to the buyer as soon as a new water bill is released.
- There are no adjustments between parties when it comes to electricity. Since the seller will cancel his/her account while the buyer needs to open his/her own account for power. In other words, the electricity bill of the seller will not be passed onto the buyer.
- As for land tax, it is not normally subject for adjustments for residential land and buildings. In most cases, the seller needs to pay for all land tax owed for the financial year when settlement occurs. This is because not all buyers will be required to pay land tax after settlement. Adjustment in land tax takes place for commercial properties or if the contract is for an unregistered land or unit, or off the plan contracts.
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