When you are purchasing or selling a property you should engage a conveyancer (or lawyer practising in conveyancing transactions).
What is ‘conveyancing’?
Conveyancing is the legal process of transferring ownership of a property.
Do I need a conveyancer or a lawyer?
A conveyancer is specifically trained and experienced in conveyancing transactions. Whereas a lawyer has a broader knowledge of the law to advise and act for you in relation to issues that could fall outside of the regular conveyancing transaction such as encroachment issues.
Why do I need a conveyancer or lawyer practising in conveyancing transactions?
- Review of the contract – if you are purchasing a property, a conveyancer will review the contract to advise you on any restrictions on your property (eg, building restrictions, easements, etc) and any known notices. This also includes checking the special conditions to ensure you are protected (eg, if you are buying to ensure there is a building and pest inspection or if you are selling to ensure you can claim damages if the settlement is delayed).
- Check to ensure the title is clear – similar to the review of the contract, it is important when you are purchasing a property that you are aware of any easements, caveats and covenants on the title. This also includes arranging for necessary searches (such as searches from the water authority, council, VicRoads, Land Tax, and obtaining a Planning Report etc) to confirm the property is free of debt and charges and also so you know of any restrictions or future planning.
- Arrange an early release of the deposit – if you are the Vendor, we can arrange for the early release of your deposit pursuant to section 27 of the Sale of Land Act as you may require these funds to purchase your new property.
- Coordinating settlement – there are a lot of elements to a settlement which a conveyancer or solicitor needs to prepare (for example arranging the bank to either discharge the mortgage if you are selling or ensure finance is ready if you are purchasing; preparing the transfer of land, notice of acquisition, and all other documents required for the State Revenue Office and Land Titles Office).
- Calculate the adjustments – prior to settlement all rates and charges need to be adjusted so the Vendor pays all rates and charges up until settlement, so the purchaser does not buy a property with outstanding outgoings and fees.
There is also some terminology that you should understand
- Vendor: the person or entity selling the property.
- Purchaser: the person or entity buying the property.
- Deposit: a percentage of the purchase price paid by the Purchaser at the time of signing the contract or shortly thereafter, and the deposit is usually held with the real estate or the Vendor’s lawyer’s trust account until settlement or an early release.
- Early release of deposit (or Section 27): a document which authorises the early release of a deposit prior to settlement.
- Easement: a designated area of land which you cannot build on as it is usually for the benefit of the council or water authority (or other authority) as an access right to maintain, install, replace or upgrade an essential service. A common example is an easement along the back of a property for drainage.
- PEXA: is a secure online platform used for property settlements which allows lawyers and banks to transact and settle the property.
- Adjustments: the outgoings of a property are calculated to the date of settlement, so the Vendor pays all outgoings until the day of settlement and the purchaser pays all outgoings from settlement to the end of the financial year.
- Section 32: This is also referred to as the Vendor’s Statement and it is included in the Contract and signed by the Vendor. This Statement provides the purchaser with all the information about the property including whether there are building permits or notices, details about the restrictions on title, and provides copies of all titles, planning reports and requirements.
- Transfer of Land: a document that shows the details of a property title and the change of ownership between the Vendor and the Purchaser and is provided to the Land Titles Office after Settlement.
- Encumbered Title: means there are restrictions (such as an easement, covenant or caveat).
- Covenant: the conditions or restriction noted on the title (eg, what type of dwelling you are permitted, or not permitted, to construct on the property).
- Caveat: a legal claim lodged by a person or entity with an interest in the property, and if a caveat is noted on title the property will not be able to be transferred until that caveat interest is removed or withdrawn.
- Principal Place of Residence Statutory Declaration / PPR: A document stating the property you are purchasing is the property you will live in.
- Zoning: this is the classification of the use of the land (eg, residential, industrial, commercial)
- Settlement: completion of the conveyancing transaction when the property transfers from the Vendor to Purchaser.
Chat to us if you’d like to find out more.