A statement of adjustment is basically a statement that contains all the apportionment of outgoings and liabilities attached to the property and required by the contract to be adjusted. The items that are usually included in the statement of adjustments are mortgage discharge fees, rates, water charges, owners corporation levies, land tax liabilities, insurance, rent, etc. The information that is needed to prepare a statement of adjustment is collected by your conveyancing lawyer from the contract, searches, other professionals that are related to the transaction, such as the property manager.
The statement of adjustment will tell the buyer how much they need to pay the seller at settlement, which would then help the buyer determine how much they will need to prepare in their short fall account. The statement of adjustment is generally available to the parties to review about 5 days out from settlement.
It is important to understand though that the statement of adjustment is subject to change prior to settlement and is only a draft until settlement date. Hence, it is always important to make an allowance for this when you are preparing funds for settlement. It is always good to overestimate than to underestimate the funds needed for settlement.
Lead Legal Services Pty Ltd (ABN 86 640 514 558)
Proud to be a registered conveyancing law firm.