Conveyancing is a term regularly used to describe the entire process of listing a property, finalising an agreement to sell and buy, and subsequently transferring ownership from the vendor to the purchaser.
However, this is not accurate as conveyancing only accounts for a portion of this process. Those uneducated on the matter of conveyancing frequently encounter difficulty in distinguishing the pre-sale legal procedures from the post-sale conveyancing process.
Conveyancing is more accurately defined as the process of transferring the legal ownership of real estate from one person to another.
You may be wondering, how is the first definition different to the second?
The conveyancing process only begins after the purchase or sale of the property.
In the sale of property, the conveyancing process only begins once the contract of sale is received by the buyer. In no way, shape or form is conveyancing related to the sale of the property. In the case of a purchase, the conveyancing process may not commence until the estate agent has sent a copy of the signed contract or Contract Note to the purchaser’s lawyer.
From here the conveyancing process begins. The series of steps taken by a conveyancer can be formatted into four main steps:
Step 1: The Title (Title Searches)
The title search offers up to date information on the registered owner of the property in question, any encumbrances registered on the title, and any dealings that may affect the title but are not yet registered.
Step 2: Off Title Restrictions & Interests
While the title search divulges encumbrances and restrictions that are registered, some restrictions are not registered. These restrictions must be discovered by way of searches of records held by various authorities.
Searches undertaken as part of the conveyancing process most commonly include:
- Zoning: Clarifies the permitted forms of land use as according to the local planning scheme.
- Rates and outgoings: Costs that a property owner is obligated to pay as a consequence of owning real estate (e.g. Taxes, Maintenance and Repair etc.)
- Road proposals: Understanding any intentions the local government have that could affect the property.
- Other Searches that could be carried out include: Heritage, Mines Subsidence, Land Slip, Land Tax, Contaminated Sites or Building Approvals.
Further information on the vendor’s rights over the property may be obtained by conveyancing lawyers through the serving of a requisition on the vendor, via the vendor’s conveyancing lawyer. However, it has become typical conveyancing practice for requisitions to be replaced with warranties.
Step 3: Section 32 Vendor’s Statement & The Contract
The Section 32 Vendor’s Statement is a detailed and elaborate statement that will not be covered in full detail here.
It is important to note, however, that the purchaser may have the right to terminate a contract if the vendor has not served an information statement in accordance with Section 32 of the Sale of Land Act.
The purchaser’s conveyancing lawyer will review the Section 32 Vendor’s Statement to garner further information about the property, as well as to make sure that all is in order. The conveyancing lawyer will commonly consider the following when reviewing the statement:
- Restrictions and any breach of those restrictions.
- Outgoings payable as a consequence of owning the property.
- Services connected to the property.
- Planning and zoning information.
- Details of any building permits, and related home owner warranty insurances.
- Details of any notices served on the vendor.
The Contract will either exist in the form of a Contract of Sale or a Contract Note.
From here, a series of processes occur before the conveyancer is next involved in the transaction:
- Cooling off period: A consumer protection provision, initiated in order to allow purchasers who have purchased impulsively or without the benefit of legal advice to end the contract “no questions asked”.
- Section 27 Deposit Release: The Sale of Land Act requires that the deposit paid by the purchaser must be held in trust, pending settlement, unless released earlier pursuant to the guidelines of Section 27 of the Act.
- Arranging for the discharge of the vendor’s mortgage: It is important for the purchaser’s lawyer to be vigilant in identifying any outstanding mortgage on the property, and for the vendor’s lawyer to work cooperatively in reaching the settlement over the payment of any mortgages.
- Statement of Adjustments: Apportion-able outgoing (i.e. rates, land tax and body corporate fees) are apportioned between the parties in the statement of adjustments.
- Purchaser’s Final Inspection: In the week leading up to settlement the purchaser is entitled to conduct a final inspection of the property.
- Settlement: The exchange of documents. Representatives of the two parties meet at an appointed place at an agreed time on the settlement day and exchange documents and cheques. When both parties are happy, they notify their respective clients that the “matter is settled”.
Step 4: Post Settlement Matters
- Notice of Acquisitions and Depositions:
Once the two parties have settled, the vendor’s lawyer will instruct the council and the water authority (by way of a Notice of Disposition) that the property has changed hands. Likewise, the purchaser’s lawyer will inform the authorities of the purchaser’s acquisition by way of a Notice of Acquisition.
- Stamping and Lodging:
The purchaser’s lawyer is also responsible for stamping and lodging. This is the process of ensuring that the purchaser is registered as the property’s new proprietor and that the property is rid of any unwanted or unexpected encumbrances.
If you would like more information about conveyancing in Australia, please feel free to contact Titlexchange on 1300 776 775.
This article was originally published on Titlexchange.