Residential Conveyancing in Relation to Purchases
Buying a New Home?
You've found your property. You're organising the finance. Now all you have to do is make sure the conveyancing goes smoothly.
Conveyancing is the legal transfer of ownership of property from one person to another. There are a number of steps you must go through before you actually own your new home.
This is a brief outline of the residential conveyancing process. You should get legal advice before entering a contract to buy real estate.
Making an Offer
When you find a property you like, you can make an offer. The real estate agent will usually require you to pay a deposit to show you are serious about the property. This will not hold the property until you have signed and exchanged contracts, but the real estate agent is less likely to show the property to other prospective buyers.
You may also have to sign a Contract Note. Make sure you get legal advice before this stage. A Contract Note is legally binding.
There is usually a “cooling off” period, which allows you to get out of the contract within 3 business days if you change your mind. Do not rely on the cooling off period – you may still lose a small percentage of the purchase price.
Before exchanging contracts with the seller, you should inspect the property thoroughly to make sure it is structurally sound. Make a list any fixtures and fittings and check these are included in the contract. You should also obtain a survey of the property if a recent one is not available – this will show the position of buildings and fences, and the exact boundaries of the property.
Contract of Sale
The Contract of Sale is a legally binding document that sets out the terms and conditions of the sale. It is a formal, written agreement between the seller and you. The contract will include:
the purchase price and deposit (usually 10%);
any fixtures and fittings that are part of the house (eg: kitchen fittings, TV antenna);
any chattels that are included in the sale (eg: curtains);
general conditions (these cover things like how the purchase price should be paid, and what happens if there is damage to the property before settlement); and
special conditions (these are extra conditions that may be included by you or the seller, eg: that the contract is subject to you obtaining finance).
We can go over the contract with you to make sure there are no nasty surprises.
Once you have signed the contract, you should arrange insurance for the property.
Requisitions on Title
After you have signed the contract, you should send requisitions on title to the seller. These are questions about the property – they can take a standard form or can include unique questions to cover your concerns. You have 21 days from when you sign the Contract of Sale or Contract Note.
Vendor's Statement
The seller must provide you with a vendor's statement – also called a “section 32 statement”. This sets out the title to the property and contains property certificates showing other interests in the property. You should check both the property title and certificates.
Property Title
We can order a title search to make sure the seller is the “registered proprietor” and that they have the right to sell the property.
It will also reveal any other encumbrances on the property, such as “easements” (rights of access across the property).
You should not exchange contracts unless you are sure the seller has good title to the property.
Once you have signed the Contract of Sale, you can lodge a caveat to protect your own interest in the property. This means your name will come up if anyone else conducts a title search on the property.
Property Certificates
We can apply for certificates from statutory bodies. These include:
Local council – the council can provide a Land Information Certificate, which shows rates payable and whether there is money owing.
Water Authorities – the certificate will show whether there are any drains under the property and whether there are restrictions to building over them. It will also show amounts payable for water rates.
Department of Infrastructure – they will provide zoning information.
Property certificates can help you to plan for expenses related to the property. They can also affect the purchase price – eg: you may be able to make an adjustment if there unpaid rates.
If there are adjustments to the purchase price, you must prepare a Statement of Adjustment setting out the new amount payable to the seller.
Transfer of Land
You must lodge a document with the Land Titles Office showing that you are the new owner of the property. If you and someone else are buying the property together, you must specify whether you will have joint ownership or be tenants in common.
Joint ownership means you have an equal share of the property and if one of you dies, the other will own all the property. Tenants in common own a specified percentage of the property – this is not automatically transferred to the other party if the owner dies and can be sold to others.
Settlement
The settlement date is specified in the contract. Usually you have to pay the seller by bank cheque. Stamp duty is also payable at the date of settlement.
You will receive a duplicate certificate of title, transfer of land and the release of any mortgage or caveats on the property. At this point settlement occurs – you will get the keys and can move into your new home.
We Can Help You
Buying a home is one of the most important transactions you will make in your life. And one of the most expensive. When a transaction involves such a large amount of money, there are many things that can go wrong.
At Joseph Rose Lawyers, we have the experience so you can avoid the pitfalls. We can help you get one step closer to unlocking the front door of your new home.