Conveyancing is the process involving the transfer of legal title of real property from one person or entity to another.
The conveyancing process is designed to ensure that the purchaser / buyer obtains good title to the property together with all the rights that attach to and run with the property and the buyer is notified of any restrictions for use or rights in advance of their purchase.
For most people buying a property is the most significant transaction they will enter into in their lifetime, both from an emotional and financial point of view. There can be detrimental (legal and financial) consequences if the conveyance is not done properly.
We can help you navigate the process and will ensure that you get good title to the property you are buying and that there are no restrictions for use on the property that you are not aware of before you buy.
Why do searches & enquiries?
When buying a property there are some statutory obligations on the vendor / seller to disclose to the purchaser / buyer certain things about the property before the contract is signed.
However, there is no obligation on the seller to tell you everything about the property or any of its defects and many enquiries about the property are not done until after the contract is signed or becomes unconditional.
The onus is on the buyer to undertake the relevant title searches and governmental enquiries to satisfy itself in relation to the property. The old saying “Buyer Beware” applies as the contract may not protect you against adverse search results in all circumstances. Searches will help you to discover if the property is affected by any current or known future plans and developments or licenses issued by governmental authorities or by inclusion on any registers such as heritage listing or environmental management.
Mortgages or encumbrances registered on title
A review of the title searches attached to the contract is imperative to confirm that the seller actually owns the property and has the legal title and right to sell it to you.
Title searches will also provide information about any encumbrances on the title.
Examples include:
- Mortgages registered against the property. Mortgages must be removed from the title before settlement.
- Easements to the local council or utility company who may have the right to use a portion of your property (possibly above or below ground) for things such as sewerage, electricity, telephones or gas.
- Restrictive covenants which affect how the property can be used. For example, a neighbouring property may have building size, height and design requirements.
- Caveats can significantly delay the purchase and sale of a property, acting as a formal notice to the public that there is an interest in the land or property in question.
Special Conditions – avoiding the traps
Your lawyer can include special conditions in the contract, before it is signed, to deal with specific issues, not covered by the standard form contract, which may arise from searches and enquiries for the property that you are purchasing (for example a pontoon may be attached to the property).
A special condition can provide a buyer with additional protection or rights in relation to adverse search results. For example, the contract could be made subject to satisfactory searches, work to be completed or can oblige the seller to compensate the buyer as a result of adverse search results.
Where the contract has already been signed there is generally no opportunity to add special conditions. In some limited circumstances it may be possible to negotiate amendments to the terms of the contract if there is a cooling off period or while the contract is still conditional.
Examples of useful special conditions
If a buyer signs a standard contract unaware of building or pest issues with the property, there may be no protection if it is subsequently discovered that the foundations are sinking or the property is termite infested. If a building and pest inspection has been carried out before the contract is entered into and problems are discovered then there may be a possibility of addressing some or all of those problems in the contract.
If you are buying a property that requires repairs or maintenance then you may wish to make the settlement conditional upon the completion of specified work and a satisfactory inspection before you are ready to settle the purchase.
If there is a special condition in the contract to address the repairs and maintenance then a buyer may be able to delay or refuse to settle if the issues are not rectified.
If you or someone you know wants more information or needs help or advice, please contact us on 02 8249 1996 or email [email protected].