Tracey and Allen were first home buyers. They were looking at buying a unit titled property which was slightly out of their price range.  The developer offered what seemed like a great deal, where they could take possession of the unit immediately with settlement (payment of the purchase price) to occur in several months time.  The incentive for Tracey and Allen was that they would be living rent free for several months.  They believed the money they would save from not paying rent could allow them to buy into a higher price range.

However, had Tracey and Allen carefully checked the details of the offer they would have realised they weren’t making much of a saving at all.  A condition of the sale was that the purchasers were to pay ‘all outgoings’ from possession.  Besides power, outgoings include property rates and body corporate levies (which cover things such as insurance, repairs and maintenance costs and management fees.)

Body corporate levies can often be substantial, particularly in properties that require earthquake strengthening.  Tracey and Allen realised too late that they were unable to afford to continue to live in the property they had just purchased, even after the benefit of the initial rent-free period.

Make sure you know all the details including the costs and fine print associated with purchasing a property.  If you do not understand the terms of the Agreement or how rates and levies are apportioned have your agent or experienced property lawyer explain these to you.