Conveyancing as a general term refers to the procedure required to transfer the ownership of land. The procedure for the transfer of title is as follows:
INSPECTION
The intending purchaser should ascertain how much money the lending body will provide on the subject property. That amount plus present savings will indicate a guide to the highest affordable price. However, the estimate of cost should include the cost of conveyancing, legal fees, and stamp duty. As part of the sale process the vendor obtains an energy rating report.
AGREEMENT
After numerous inspections of the houses on the market the potential buyer may pay a holding deposit on the house he/she decides to buy. The purchaser applies to the lending body for a loan and which will require the payment of fees see real estate finance. The purchaser may arrange a pre purchase property inspection.
Upon agreement by the vendor to sell and the purchaser to buy at an agreed price the purchaser normally pays 10% of the contract price as deposit. The agent holds the deposit as stakeholder. The agent informs the solicitors or conveyancers of both parties of the essential details by notice of sale so that the contracts can be drawn up.
The vendor's solicitor produces all relevant documents to enable transfer of the land. These include a draft contract, title and other searches, site diagram, energy rating and survey if available. These documents are annexed to the draft contract and forwarded to the purchaser's solicitor.
The purchaser's solicitor will search title with the Registrar General and any necessary documents missing from that provided above, including special searches. For example, the heritage, land and other taxes. The purchaser normally obtains survey, certificate of occupancy, and all statutory approvals for the use of the land (eg for a dual occupancy).
The lending body will value the property to determine security for the loan. Checks ownership with a title search. This is carried out at the purchaser’s cost. The lending body will insist that the purchaser takes out adequate insurance to cover the value of the premises.
After completion of the above inquiries and the contracts are prepared to the satisfaction of the parties they are exchanged see exchange of contracts.
EXCHANGE
With exchange the purchaser acquires an equitable interest in the property and to protect that interest the purchaser should lodge a caveat on the property. The purchaser should take out insurance over the improvements from date of exchange. See certificates. The contract is stamped and the purchaser pays stamp duty.
SETTLEMENT OR COMPLETION
The transaction should be completed about 6 weeks after exchange for normal Torrens Title land. The vendor's solicitor arranges for the discharge of any mortgages, and the withdrawal of any caveat. A date is arranged for settlement to take place. This is usually at the vendor's bank, building society or dedicated rooms. Both solicitors attend together with a representative from the lending body.
On settlement the vendor will hand over registrable documents which release their interests in the land. The lending body pays the loan moneys and the purchaser pays the balance. The purchaser's solicitor authorises the vendor's solicitor to collect the deposit from the real estate agent. The vendor discharges the mortgages.
The purchaser's solicitor will have any relevant documentation for a new mortgage over the land. Settlement occurs with the payment of the balance of the purchase money and the agreed contribution to rates, taxes and outgoings see adjustments.
The purchaser's solicitor will receive a signed transfer of the title and the title deeds.
The purchaser's solicitor carries out the final search before completion to check whether or not any dealings, registered notifications have been lodged for registration since exchange.
The purchaser and any new mortgagee receive the documents to enable registration of ownership and interest. The party possessing all the relevant new documents lodges them with the LTO for registration of title and interest. The title documents and mortgage will be held by the lending body until the term of the mortgage is completed. The purchaser pays stamp duty on the mortgage.
The purchaser's solicitor hands to the vendor's solicitor on settlement an order addressed to the agent (in letter form) authorising the agent to account to the vendor for the deposit held by the agent as stakeholder.
The vendor's solicitor hands the keys of the premises to the purchaser's solicitor.
LODGEMENT
Both parties' solicitor send a notice of transfer to the relevant authorities. Upon receipt of the transfer the Land Titles Office transfers title into the name of the new owner. The new owner is now the registered proprietor.
Undesirable effects of the late lodgement include:
the title is exposed to claims/judgements against the vendor until the transfer is registered the vendor remains the registered proprietor.
rates notices are sent to the vendor notwithstanding that settlement has taken place. The Rates and Land Taxes Act imposes an obligation on the registered proprietor to pay rates.
a significant amount of the avoidable, wasted time is caused through complaints to LTO, revenue offices, solicitors and financial institutions.
TYPICAL PROCEDURE
Conveyancing procedure varies with state and territory and is usually controlled to some extent by statute. Statutory controls have concentrated on speeding up the process and thus reducing the chances of gazumping.
The usual system to achieve this aim is to require the vendor to have most of the documentation ready before advertising.
CASE STUDY
Please advise you agent and solicitor of your time requirements.
Before purchase (preferably)
Engage a solicitor and seek pre-approval for finance from your lending institution.
These are the typical procedures in the ACT:
DAY 0
When you have found a property that meets your needs, ask the agent to see a copy of the draft contact including the Energy Efficiency Rating, Building, Pest and Compliance Reports. You will probably have to visit the agent's office to do this. lf you are satisfied with the content of the draft contract and reports, you can then make an offer to the agent and negotiate until your offer or revised offer, is accepted.
DAY1
Contact your Solicitor and advise them you have made a purchase. The agent will notify the seller's solicitor to arrange a copy of the contract to be sent to your solicitor. You don't need to have finance finalised to sign the contract. It is essential though, if you intend exchanging
contracts unconditionally. If you have signed a conditional contract, you will have a "cooling off' period unless you agree to waive this. Your solicitor will advise you on the "cooling off period. At your solicitor's appointment, the details of your deposit requirements and stamp duty will be confirmed.
Contact your lending institution if required and make a formal application for finance. It is important to do this as soon as possible. Quite often the finance is an area where delays can occur. Your lending institution will almost certainly require a copy of the front page of the
draft contact. They will also provide a list of documentation necessary to process your loan application. Your loan cannot be processed unless all documentation is provided-
DAY7 +
Contact your solicitor immediately following receipt of finance approval from your lending institution. If the contract is signed and the deposit lodged you are in a position to EXCHANGE contracts (this is when both parties are legally bound).
ONE WEEK PRIOR TO SETTLEMENT
As the settlement date approaches (when you take possession of Settlement the house) contact your agent to orqanise a pre-settlement inspection.