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Multiple steps need to be followed when purchasing a new property. There are steps before settling and one, which is known as conveyancing. So what is conveyancing and what is its job description? Conveyancing is the transfer of the title of a property from one person to another, and is usually undertaken by a property solicitor or a licensed conveyancer. They prepare the documents needed for purchase and settlement of real estate. Conveyancing transactions between the buyer and the seller involve two major landmarks, the exchange of contracts, and completion, and this occurs in three stages: before contract, before completion and after completion. The contract for sale sets out all the terms of the agreement in writing and once both parties have agreed with the terms, the contract is exchanged. Conveyancers on both sides, who physically swap the contracts, usually handle this. A 10 per cent deposit is often paid upon exchange, and at this point, the contract becomes legally enforceable. There is often a five-day cooling off period with residential properties. There is usually then 35 days between the exchange and the settlement of the contract, but this can vary, and during this time problems are investigated, Stamp Duty is paid, the buyer's loan processed and the seller's loan discharged. The conveyancer often attends settlement, and once everything is correct and in order, a new Title Deed is issued to the new owner. Terms used in the conveyancing One of the major minefields in buying and selling of property is the legal jargon and terms that can often make the whole process a lot more daunting and confusing than it needs to be. The conveyancing side of the property buying process is particularly full of jargon and terms that are better understood when translated into plain English. Here are the main ones. Caveats, certificates and covenants If there is, a Caveat registered on the property title, that means someone else has interest in the property as well. A Certificate of Title is the document identifying the ownership of the land, and any attached mortgage. Community Plan divides land into community lots and property that can be used for playing fields, swimming pools, clubhouses or other community activities. a Covenant is an agreement by one party to adhere to certain terms, conditions or restrictions regarding the property which will show on the Certificate of Title, and may affect the way you use the property. Easements, encumbrance, fee simple, fittings and fixtures An Easement is a legal right to use a particular part of someone's land for a particular purpose, while an Encumbrance is a burden or charge registered in the title, such as a mortgage. Fee Simple is the highest interest in land that any individual can own, and Fittings are goods or articles that can be removed without damaging the property, while Fixtures are items such as built-in cupboards, baths and stoves that cannot be removed without causing damage. Land tax, lease, license and memorandum of transfer Land Tax is a state government tax payable by owners of a property which is not their normal place of residence and based on its value; a Lease is an exclusive right to occupy land owned by someone else, and a License is a non-exclusive right to occupy land owned by someone else. A Memorandum of Transfer is a document signed by the vendor (seller) and purchaser that when registered by the Lands Department legally changes the ownership of the land, more commonly known just as the Transfer. Right of way, strata title, survey, Torrens title and valuation A Right of Way allows access across land usually owned by someone else, and a Strata Title is the name given to the ownership of units, townhouses or villas, and is a form of Torrens Title, a name given to a system of recording ownership of land, and once registered on the title, it guarantees ownership by the state government. A Survey is a written report showing the position of buildings and fences in relation to the boundaries, and shows any encroachment onto neighbors’ land. In addition, a Valuation is a written report showing a registered value’s opinion of the value of the property. The lender usually requires this so they know what the market value of the property is. Author Bio: The author thinks that best conveyancer should be used when selling and buying property. To know more, visit the website adcocks.com.au
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