Conveyancing

What is ConveyancING?

Conveyancing is the process of transferring ownership of land from one person to another, under the terms of a contract for the sale of that land.  Conveyancing involves understanding that every Australian State has different laws, forms, regulations, fees, time requirements, protections, jargon as well as government departments as part of the conveyancing process. Having said that each state essentially follows the same steps with only the details changing. Whether you are buying or selling, the contract that sets out the terms of the sale is important. The buyer and seller both have obligations and rights under the contract. The conveyancer’s role is to make sure you do what you are supposed to do when you are supposed to do it.

DIY Conveyancing

It is possible to do your conveyancing yourself; this typically suits those who are comfortable with navigating legal documents and terminology, have surplus free time available or are on a tight budget. Some states, including Queensland and Victoria offer DIY conveyancing kits which give you clear information on how to do conveyancing yourself. Costing from $150-300, the kits are specific to each particular state or territory. As such, every territory or state has a kit of its own, so be sure you’ve purchased the correct one. The link provided will assist you if you want to explore DIY conveyancing in the state of Queensland diyconveyancingkits.com

As noted, these kit types will vary according to details like property locations and property types. A range of conveyancing kits can be purchased online or at the post office. The document should be read very carefully before the contract of sale is singed, and it is important to allocate enough time to complete the necessary searches before settlement.

The benefits of DIY conveyancing are you save time and money. Solicitors and conveyancers typically charge $300-800 on top of the cost of fees and certificates ($330-600). Conveyancing typically takes about six weeks. This process requires a number of steps be taken and these can be frustrating and time-consuming.  The down side to DIY is that conveyancers infrequently inspect the property. They tend to do the paperwork and delegate the actions to be performed by others. At Local Property Team, we aim to reduce your worry by providing a real estate fees calculator that can assist you to compare real estate agents’ fees and services. A real estate fees calculator can be found here: 

Click here to get the best price for your home.

Click here to use our real estate agent fees calculator.

Professional conveyancer

While negligence is less likely to happen in a DIY because you are in control of the process, it is equally important to reiterate that a DIY may not suit you if you lack the knowledge and time. In many cases, people who conduct DIY conveyancing on their own run into unexpected problems in the long term. For example, individuals might not have professional indemnity insurance but a professional does. Factors like this can cost money later on. if you misunderstand a document, a clause in a contract or search result this could result in expensive and unnecessary litigation and loss. If this is your first property it’s best to hire a licensed conveyancer from the start, especially if you don’t know how the process works.  So, it is worth thinking about putting the conveyancing process into the hands of the professionals. Although it’s possible to take care of it on your own, in many cases you’ll find it’s much easier to hire a professional. The cost incurred is well worth the savings in time and stress. 

Conveyancing Steps

1. Preliminaries

Usually there is no solicitor involved at this stage

Inspection of property

Negotiation (real estate agent acts as intermediary)

2. Formation of contract

The real estate agent usually draws up the contract

The buyer signs the contract in duplicate, pays the deposit and delivers the contract (and duplicate) back to the seller

3. From contract to completion

In this time span the buyer attends a conveyancer or solicitor (if used)

The buyer or conveyancer investigates titles, searches various departments and may conduct a survey.

Any title objections are delivered

Transfer of documents to the seller and buyer or conveyancer attending to stamping contract

Adjustment of outgoings are worked out.

4. Completion

If the paper work is satisfactory the buyer pays the balance of purchase money

The seller hands over the documents for registration and the keys for the property

Buyer or lender attends to registration of transfer, with the buyer becoming the legally recognised owner upon registration

Notification of change of ownership given to relevant government agencies.

Insurance

If you are buying a house you should insure it within 24 hours after the contract date. If the house is destroyed before you become the owner, you are still bound to buy the land and pay the full price. If you are borrowing, your lender will make you take out insurance well before they give you the money to buy a house and insist their name is on the policy as an interested person.

If you are buying an apartment, there is no need to insure the property because the building is owned by the Body Corporate – all you own is the space in the building that is your unit. You should ideally insure the inside of the unit within 24 hours after the contract is dated. This will give peace of mind because if an unexpected event occurs, you will be covered.

Searching

After the contract goes unconditional your conveyancer will make enquires to test the guarantees the seller has put into the contract.  These guarantees include:

• House
• The local Council (rates paid and owing)
• Land Tax (for taxes levied and owing, if any)
• Transport Authority (land resumptions for road widening or a freeway for example)
• Mine Subsidence (if it is a country house in a mining area)
• Heritage
• Neighbour Dispute 

• Unit
• The local Council (land and water rates paid and owing)
• Land Tax (taxes levied and owing, if any)
• The Body Corporate of the Strata Plan (levies paid and owing)
• Neighbourhood Disputes
• Body corporate issues which would unreasonably affect you

Satisfying Your Lender’s Conditions 

The lender will want to know before they transfer money over that they are getting what they need to register the mortgage and meet the bank’s conveyancing requirements.

Paying Transfer Duty on the Contract (also known as Stamp Duty)

The contract is the written evidence of the terms under which you are buying. Transfer duty (a government tax) must be paid on the contract within 30 days of it becoming unconditional or at settlement. This is because the Department of Natural Resources and Mines will not let your lender register the mortgage unless the transfer duty has been paid on the transfer document. The lender will want to register the mortgage as soon as possible after it lends you the money, so everything has to be done beforehand. 

Transfer Duty is calculated on a sliding scale and whether you are going to live in the home or rent it out. Click here for information on how Stamp Duty is calculated. home-loans/stamp-duty-calculator If you are a First Home Buyer you could potentially get a First Home Owner Grant and a Stamp Duty concession. For more information click here https://www.homeloanexperts.com.au There are also exemptions from Stamp Duty regarding the transfer of ½ share of a home to a spouse or part of a divorce where joint ownership is being split. 

 
The Transfer

The Transfer is a legal document that is lodged at the Department of Natural Resources and Mines. This is where land ownership information is kept. The effect of the transfer is to register you as the owner of the home. It is prepared by your conveyancer and the details must exactly match the contract and the details on the mortgage, otherwise there will be issues at the Stamp Duty Office and the conveyancing process stops until the problems are sorted out. This can be time consuming, complicated and stressful if you are leaving the payment of stamp duty to the last moment – something you should never do. Some examples of what can go wrong could be spelling differences (Elisabeth not Elizabeth), middle names on one document but not the other, typographical errors. 

Notice of Sale (Form 24)

Your conveyancer also needs to prepare the Notice of Sale. This notifies the council, the water board and other government departments of the sale and gives them your details so they know where to send your notices. The notice is lodged with the transfer (and the mortgage if there is one) at the Department of Natural Resources and Mines. The lender lodges these documents if there is a mortgage, otherwise your conveyancer will. 

Section 32

A Section 32 statement is not a contract of sale. Instead, as part of the Sale of Land Act, it provides a purchaser with relevant information that may affect the decision to sign a contract of sale. Also known as a vendor’s statement, a section 32 document is required by law and tells potential buyers key things about the property title they need to know before signing a contract to purchase. Requesting a section 32 ahead of an offer being made tells a vendor that someone is interested in the property and might like to make an offer. 

Settlement Figures

Handing over money to pay for the home and getting the legal documents so you have ownership of the house can be transferred to you (the buyer), is called “Settlement”. 

To work out how much to hand over at settlement, all council rates, water usage, body corporate levies (in the case of a unit) and taxes on the home will be divided fairly between the buyer and seller based on the number of days each own the home. These amounts are called “the adjustments”. The buyer’s conveyancer puts these figures together from the information they extract from the searches and sends these figures to the seller’s conveyancer. 

The seller’s conveyancer then agrees to the figures (or not – in which case they are negotiated) and tells the buyer’s conveyancer how to make out the cheques for settlement. The seller and buyer’s conveyancers then set a time and place for settlement. Settlement usually happens at the office of the person/or the entity who holds the title to the property (e.g. the seller’s bank).

What if You Want to Move in Before Paying for the Home?

This is called “taking early possession”. As a rule, it isn’t popular with sellers and conveyancers will usually advise them not to agree. This occurs because when someone is in the house it is very hard to get them out. 

Additionally, what if your circumstances change? What happens if the sale doesn’t go through because of any of the following examples; you get sick, you are a couple who are getting a divorce, you discover problems with the house, or it burns down? It is therefore the seller who is taking all the risks. 

It is possible to take early possession. It could even be a condition of purchase. The terms of the possession are covered by the standard printed contract. It isn’t covered by tenancy law because it is not a rental. It is a license to occupy the house.

Conveyancing can take 8 to 12 weeks from when the sale is agreed and, if you are a first home buyer, it is recommended you use this service. Your conveyancer will manage the transfer of documents to make sure the property is rightfully and legally transferred to, or from, your name. The advantage of using a conveyancer is that it is their job is to ensure all documents comply with legal regulations in your respective state. To ensure you have the best representation possible, you should always research your prospective conveyancer to identify one with the experience, expertise and strong reputation you desire.