Conveyancing - what to do
The rules about conveyancing vary depending on the State or Territory law. In general there are a number of stages involved in a standard conveyance:
- Make offer.
- Sign the Contract Note (or similar e.g. Offer and Acceptance, Offer to Purchase) or Contract of Sale.
- Exchange contracts with the seller.
- Searches and Requisitions on Title.
- Obtain certificates.
- Arrange bank finance.
- Prepare the Transfer of Land.
- Arrange settlement with the seller and bank, and do rate adjustments.
After you have signed your contract you exchange your copy with the copy signed by the seller, i.e. you get the signed seller's copy and they get your signed copy.
Requisitions on Title
Some States/Territories allow you to send the seller requisitions on title - these are questions (requisitions) that you ask the seller about the property. There are also other types of requisitions, usually issued by banks or the Titles Office, but we will not cover them here.
You normally send these requisitions to the seller as soon as possible after signing the Contract Note (or similar e.g. Offer and Acceptance, Offer to Purchase) or Contract of Sale (which ever was offered first).
You may have limited time to send the requisitions to the seller after signing the contract (as soon as 14 days or less), so don't dilly-dally!
If you don't ask the questions you are considered to have accepted that everything is okay with the property.
What questions can you ask? There are standard form questions that can be used.
Some of the questions will not be relevant for the property you have bought. All you have to do is cross them out. On the other hand, generally there is nothing to stop you adding questions of your own.
Where requisitions are not provided for in the standard Contract of Sale, you might consider having a special condition included that allows you to issue requisitions on title to the Seller. Get legal advice.
Statutory authority certificates
You will want to see certificates from various statutory authorities (which are like government departments) that tell you:
- whether they have any interest in the property you want to buy; or
- whether there is something that is going to happen in the area that might affect your use of the property.
You should always get these certificates, even if it seems to be a waste of your time. Amongst other issues, you will want to know:
- the "adjustments" on the purchase price resulting from unpaid or unused rates and taxes;
- if there is some reason you will not be able to use the property in the way you intend, for example if you want to renovate;
- whether there are any major works, like freeways, to be built in the area; and
- whether there are services like gas and electricity available.
Some of the more important certificates include water authorities; roads authorities; the local council or authority.
You will want to know how much the council charges for rates, and whether there is any money or charges still to be paid. The council will also be able to tell you whether the house/unit is in a suitable condition to be occupied.
The certificate you receive from water authorities will tell you the amount payable for rates. It will also tell you whether there is a sewer or drain under the property, and whether there is a restriction to building over it.
Be careful with the certificate from roads authorities. It may not tell you whether there is a proposal to build major roads or a freeway near the property.
The Transfer of Land
This is the document that tells the Titles Office (or Land Titles Office) to change the registered ownership of the property into your name.
It is your responsibility to prepare this document and get it to the seller after you are satisfied with your searches and requisitions.
If you are buying with someone else, you have to spell out the type of ownership that will apply to the property. You must write on the document whether it will be a joint ownership (joint tenancy) or shared ownership (tenants in common).
Remember that tenants in common do not have to take equal shares, and the Transfer should make this clear.
The purchase price of the property is "adjusted" to allow for expenses that have been paid in advance or are owing at settlement. In other words, it is the seller's responsibility to pay the rates till settlement.
You can calculate the adjustments by dividing the total amount of the annual rates by 365 (for the day in the year) to get a daily rate. You are then able to "adjust" for the balance.
For example, if you buy a property thirty days before the rates are next due, you owe the seller 30 times the daily amount you have already calculated.
Until the adjustments are worked out, you will not be able to write the cheques that you will hand over at "settlement".
What is settlement?
This is the big day, the one you have been waiting for!
Everyone gets together and exchanges the documents and cheques that complete your purchase of the property.
As long as everyone has done their job properly, it should be a simple process. Although it's surprising the things that can go wrong - not necessarily all are major problems.
It's not a bad idea to check the property before settlement to see:
- if anything you paid for is missing; and
- that everything that was working when you signed the contract is still working.
You or your lawyer/conveyancer will:
- pay the stamp duty on the Transfer to the appropriate State revenue office;
- lodge documents at the Titles Office; and
- inform authorities that charges for services to the property you have bought. They need to know that you are the new owner.
Last updated - April 2010
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This fact sheet is intended to be general information about the law in Australia. It is not a substitute for legal or other professional advice. Lawscape Communications Pty Ltd and Fairfax Digital Ltd do not accept responsibility for loss to any person, who either acts or does not act because of this fact sheet. Last Updated - October 2005