The Bank Cheque is the contracted and most accepted practice of exchanging money in property settlements for a Conveyancing Solicitors. However, these cheques are not free and depending on your institution can cost you up to $15 each.
At settlement, the obligation is on the Buyer (or Buyer’s financer in most cases) to provide the cheques for the purchase price in the form of Bank Cheques, as directed by the Seller. These cheques could be to pay Real Estate Commission, any outstanding rates or water, or could be cheques required for a simultaneous settlement. Some settlements can require five or six Bank Cheques which can prove expensive, but it is not necessarily the Buyer’s responsibility to pay for all of these Bank Cheques.
Under Clause 2.6(12) of the Terms of Contract in a REIQ Contract for House and Residential Land, the cost of the Bank Cheque to the Seller or the Seller’s Mortgagee is the responsibility of the Buyer. To parties other than the Seller or it’s Mortgagee it is the responsibility of the Seller. This means that your Solicitor is able to make an adjustment in your favour for the cost of any Bank Cheques which are not the Bank Cheque made out to the Seller or it’s Mortgagee.
An ADL Contract for Sale of House and Land has quite different terms and it is always advised that every Buyer become familiar with the contract which they have signed. Under clause 11.2(5) of the Terms and Conditions provide that the Buyer shall bear the cost of no more than 4 Bank Cheques.
All Bank Cheques drawn are added to the fees which the Buyer’s financer will eventually deduct from the Buyer’s account. The problem which occurs so often, is that practitioners may forget to make the relevant deductions. This results in Bank Cheque fees being paid for the Buyer, which is not their responsibility or obligation under the contract.
The cost of Bank Cheques may not seem expensive given the purchase price of a property. However, it is a contracted term and should be utilised to the fullest to the advantage of the Buyer.
Should you require a professional approach to being a conveyancing solicitor, please do not hesitate to get in contact with one of our Lawyers at Becker Watt Lawyers.