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Conveyancing FAQ
We act for individuals, property developers and businesses in helping to simplify the numerous aspects of conveyancing. We handle standard and complex conveyancing matters, both residential and commercial, at competitive rates.
What is conveyancing?
Conveyancing is the process of transferring ownership of a property from the seller to the buyer. It is a complex area of law, not just a process of filling in forms. It involves the preparation of legal documents, checking for problems or restrictions relating to the property and settlement involving the transfer of large sums of money.
What is a vendor’s statement?
When a property is sold, the vendor must provide the buyer with a vendor’s statement (also called a section 32 statement) before the buyer signs the contract. The vendor’s statement should contain information about the land including information about easements, covenants and similar restrictions, planning information, rates, taxes and outgoings charged on the land, services connected to the property, building permits obtained in the previous seven years, owner builder matters, any notices or orders affecting the land of which the vendor has knowledge, owners corporation information (if applicable) and title and plan of subdivision information.
The vendor’s statement does not contain information about the quality and condition of the buildings or fittings.
A buyer may be able to withdraw from a contract of sale if the vendor’s statement contains incorrect or insufficient information.
The contract
A contract is an agreement entered into between the seller and buyer. Real estate sales must be by way of written contract signed by the parties. The contract is prepared by the estate agent or the vendor’s legal representative. Once a contract is signed by both parties, it is legally binding on both parties.
Does a cooling off period apply?
A cooling off period applies to the purchase of real estate in many cases. If none of the exceptions listed below applies, the buyer may end the contract within 3 business days of the time the buyer signed the contract by giving written notice to the vendor or the estate agent.
If the buyer ends the contract, the buyer is entitled to a refund of any deposit paid except for $100 or 0.2% of the purchase price, whichever is more.
The cooling off period does not apply if:
- The buyer purchases the property at auction or within 3 business days before or after an auction.
- The buyer receives independent legal advice about the contract before signing it.
- The property is used mainly for industrial or commercial purposes.
- The property is more than 20 hectares in size and is used mainly for farming.
- The parties have previously entered into a contract for the same property.
- The buyer is an estate agent or company.
It is most important that the buyer have the contract and vendor’s statement checked by a lawyer before the end of the cooling off period, or if there is no cooling off period, prior to signing or the auction (if applicable).
What happens to the deposit?
The deposit is usually paid to the estate agent who retains it as stakeholder for both seller and buyer.
The deposit can only be released to the seller once the seller has provided a deposit release authority (also called a section 27 statement) to the buyer and information about liabilities affecting the property. The buyer should not sign a section 27 statement releasing the deposit to the seller until the buyer’s lawyer advises that this is in order. The buyer may delay doing so for up to 28 days from the time the authority is received.
What chattels are included in the sale?
Chattels are movable items such as carpets, light fittings, blinds and drapes, dishwashers, movable garden sheds, heaters, air conditioning units, swimming pool equipment, above ground pools, TV antennas, portable clothes lines and remote control devices.
Both the seller and buyer should carefully check that the contract correctly lists all chattels that are included in the sale.
Preliminary steps by buyer
It is advisable for the buyer to attend to the following before the contract is signed or the cooling off period (if any) expires:
- Ensure that finance is or will be approved before signing the contract. If in doubt, the contract should be made subject to finance.
- Carry out a thorough inspection of the property to check the condition of the property, appliances and fittings. The usual rule is that the buyer buys the property as it is and is only entitled to have the property delivered in its condition as at the date of the contract, fair wear and tear excepted.
- An inspection by an architect or builder about the condition of the property and a pest inspection before the contract is signed or the cooling off period expires would be beneficial.
- Check that the boundaries of the property and the distance to the nearest intersection correspond with those shown on the title plan.
- Check with the local council to ensure that the property can be used in the way the buyer intends, especially if the property is commercial or industrial or if any building works, other development or non-residential use is planned, and make any enquiries regarding planning proposals for neighbouring properties.
- Where the property contains a pool or spa, check that it is fully fenced in accordance with council requirements. If not, the usual rule is that buyer takes the property as is and will be required to comply with these requirements.
- Where property is vacant land, the buyer should check with the local council and their builder or architect to make sure they will be able to build the home intended and the availability and cost of connecting services such as electricity, gas and telephone to the property. It is also advisable for the buyer to arrange for soil tests to be carried out by a soil engineer.
Other preliminary steps may be advisable depending on the circumstances.
What fees and charges are payable?
The seller must pay:
- Estate agent’s fees and advertising expenses (which are usually deducted from the deposit).
- Conveyancing fees and expenses.
- Registration fees on the discharge of any mortgage or withdrawal of any caveat.
The buyer must pay:
- Lender’s fees (including mortgage insurance if any).
- Adjustments of rates and charges.
- Conveyancing fees and expenses.
- Land Titles Office registration fees on the transfer and any mortgage.
- Stamp duty on the transfer.
Government grants and stamp duty reductions are available to eligible first home buyers up to differing maximum purchase prices. Stamp duty exemptions or reductions apply to the purchase of a principal place of residence by eligible pensioners and some concession card holders in certain circumstances. As grants and exemptions are subject to change, current eligibility requirements should be ascertained before the buyer signs any contract or contract note.
What is the role of a lawyer?
The role of the seller’s lawyer includes:
- Preparing a vendor’s statement and any special conditions required.
- Preparing a contract and arranging for signing if applicable.
- Arranging for the release of deposit.
- Preparing a goods statement or declaration.
- Checking the transfer and statement of adjustments.
- Arranging for discharge of the seller’s mortgages.
- Arranging and attending settlement on the seller’s behalf.
- Advising the council and water authority of the sale.
The role of the buyer’s lawyer includes:
- Checking the contract and vendor’s statement and giving advice to the buyer before the contract is signed or within the cooling off period.
- Conducting a title search and applying for property enquiry certificates.
- Attending to nomination of any additional or alternative purchaser if applicable.
- Preparing the transfer of land and arranging for signing.
- Checking mortgage documents and arranging signing.
- Preparing a statement of adjustment of rates and charges.
- Arranging and attending settlement.
- Notifying the State Revenue Office, council and water authority of the change of ownership.
- Attending to payment of stamp duty and lodging documents for registration (where there is no lender involved).
Please note: The contents of this website are not intended to act as a substitute for legal advice. Legal advice should always be sought before action is taken based on any of the matters described in this website.
Contact us to arrange a consultation. |
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