What is conveyancing?
Conveyancing is the legal process of transferring real estate from one party to another, whether it be residential, rural or commercial property, a house, vacant land or strata unit. Although several steps are involved, the conveyancing process generally moves quickly and what may seem like a simple oversight could result in significant consequences for a buyer or seller.
The complexity of such transactions can often be under-estimated and while most proceed without issue, there are some that do not. The penalties for failing to complete a binding contract can be significant and the financial repercussions of buying property with unknown defects, or not providing the required disclosures when selling can turn your transaction into an expensive and draining experience.
When purchasing residential property, buyers should know exactly what they are purchasing and must receive clear title to the property. Due diligence involves a series of investigations to ensure that the property may be used for its intended purpose, there are no adverse affectations, the implications of any easements or other restrictions registered on the property are understood, and that structures are compliant and have been built with approval.
A purchaser who fails to complete a contract after exchange risks significant penalties. Ensuring that finance has been approved, due diligence is carried out and the obligations under the contract can be met is essential to protect a buyer’s interests.
Before offering residential property for sale, a written contract must be prepared in accordance with the relevant jurisdiction’s legislation. The contract must contain certain disclosure documents such as a title search, plan of the land, drainage diagram and local council planning certificate.
Vendors must provide certain warranties including that there are no adverse affectations concerning the land, and that structures comply with relevant building and zoning regulations. Failure to provide the correct disclosure and warranties in a contract may allow a buyer to rescind (cancel) the purchase.
Buying a unit
Purchasing a unit requires additional considerations. Owning a strata title property means that you will hold title to an individual lot as well as sharing the use and responsibility for common areas such as stairways, lifts and gardens.
After completion, a strata lot owner becomes a member of the owners’ corporation which is responsible for managing the strata scheme. This encompasses matters such as financial management, arranging insurance and repairs and maintenance to common property. Additional ongoing financial obligations must be factored into the purchase – these may be significant, particularly where repairs and maintenance to common property are required.
Strata properties also have by-laws which regulate matters such as carrying out renovations, noise, parking and the keeping of animals. These matters should be fully investigated before purchasing.
Buying off the plan
Buying off the plan entails purchasing a property that has not yet been built or land, the plan for which has not yet registered. An off the plan purchase may not settle for two to three years after negotiations.
Contracts are usually lengthy and contain many conditions and variables such as a series of completion dates providing a buffer to allow vendors additional time to finish the project and complete the contract. Contracts usually also provide for variances in design, size and finishes subject to permissible limits.
Once the development is completed and the plan registered, purchasers usually have around two weeks to complete.
A retirement village is typically a community-style development offering accommodation options to retirees, generally aged over 55 years. There are many different types, and the legal arrangements vary considerably. Some arrangements provide for outright ownership whereas others are loan-licence or leasing arrangements.
Retirement village operators must provide prospective residents with a disclosure statement before entering into a contract. The contract governs the rights and responsibilities of the resident and retirement village, and sets out details of occupancy rights, use of common facilities, the services included which may be assisted living or aged care, the fee structure including ongoing contributions for management and maintenance, and relevant exit fees.
Buying or selling a property can be an exciting but stressful experience. It is certainly one of the most significant transactions in your life. We aim to make your experience simple and stress free and will guide you through the steps from contract stage to settlement, ensuring your interests are protected at all times.