Conveyancing is the branch of law concerned with the preparation of documents for transferring a property. The conveyancing procedure is quite similar throughout Australia with some subtle differences involving various governmental bodies.
If you are planning to purchase a property, proper attention and understanding of the conveyancing process is required.
Conveyancing in Buying Process
Once you have found a property which fits your need and budget, you can make an offer either to the vendors or to their agents. If your offer is approved by the vendor, you are required to comply with certain conveyancing guidelines in order to purchase a property. The steps to be followed for purchasing a property involve:
- Pre – Purchase Inspection: Before buying a property you must make an inspection and procure all the relevant documents concerning the property. The documents can be asked from the vendor which may include Certificate of Title, Zoning Certificate, Building Certificate, Encumbrance Certificate, latest Tax Receipts and Pest Control Report.
- Preparing the Contract of Purchase: After you are satisfied with the property and its title, the next important step of the conveyancing process is to prepare a Contract of Purchase. It sets out the terms and conditions agreed upon between the vendor and you in relation to the property being purchased along with other details. Some of the essential terms of the contract are:
- Parties to the Contract: The contract must contain the names, residing addresses of the parties to the transaction, their competencies and their bonafide intentions to enter into the contract, making the contract valid and legally binding.
- Description of the property being purchased: The contract must contain full description of the property being purchased such as the location of the property, total land area and construction details, if any.
- Purchase consideration clause: This clause includes the purchase consideration as agreed between you and the vendor. The consideration payment mode and any earnest money that you may have to pay to the vendor prior to the execution of the contract should be clearly stated in this clause.
- Obtaining consent and licences: This clause sets out the necessary consent and the relevant licences that the vendor and you have obtained from the appropriate authority, required for purchasing the property.
- Passing of the title or ownership: This contract sets out the time limit during which the original title of the property should be passed by the vendor to you and all the rights will accrue on to you once the title gets transferred.
- Warranty clause: Your right as the buyer to purchase the property and the vendor’s warranty for the absence of any easement or encumbrance or possessory agreement affecting the property or any other legal disability should be included in this clause.
- Indemnity clause: This clause includes an assurance by the vendor to you that all statutory charges, maintenance charges, all incidental charges and any subsisting loan amounts relating to the property have been paid prior to the execution of the contract.
- Cooling off clause: This clause will give you the right to withdraw from purchasing the property within a stipulated period. *However, ‘cooling off period’ is not a general condition and is therefore not applicable to all States and Territories. It is advised that you check this with your Solicitor.
- Execution and Registration clause: As per this clause, the vendor and you should sign the Contract of Purchase. The registration of the contract and the payment of stamp duty will be based on the applicable State or Territorial law where your property is located.
- Default clause: Your contract should include this clause stating the actions that the parties will undertake on ‘default’. This clause should also include provisions with regard to when a default notice is to be served and how the defaulting party will pay compensation.
- Exchange of Contracts: Once the Contract of Purchase is prepared, the vendor and you should sign it and then swap the contract.
- Settlement: The settlement period should be mutually decided upon by both the parties. The purchase procedure should be completed once the Contract of Purchase is signed and executed and the entire purchase amount is paid by you to the vendor.
In a fast moving market you will need a Conveyancing lawyer who can respond very quickly after you have made an offer to purchase a property. Our team of experts are experienced at conveyancing and can assist you in all stages of the process. If you have any query pertaining to conveyancing matters, feel free to contact our lawyers at Owen Hodge Lawyers.