What is conveyancing? What is the process? What are it’s steps?
What’s the meaning of conveyancing?
“Conveyancing is the transaction process for purchasing
and/or selling real property.”
The transfer of legal title of real property is a heavily regulated process and each state has legislation which governs the transaction process. Depending on the type of property, particular legislation may apply and need to be considered.
For example, in Queensland ‘time is of the essence;’ this means that if either party fails to comply with essential terms of the Contract by a certain date, serious penalties (including the right to terminate the Contract, forfeiture of a deposit and rights to claim damages) may apply. In other States however, time may not be of the essence. A conveyancer or Solicitor would know which rules apply for the States they practice in.
Buying or selling your property can be daunting and generally more complicated than most people anticipate. What happens if you have concerns with the building and pest report? What are your options? Do you know your rights?
Hiring a Conveyancing Solicitor takes a lot of the work off your hands and places you in more capable hands. You can trust that a Conveyancing Solicitor is familiar with the process, the relevant rules and regulations and with their ‘inside’ industry experience, knows what ‘tricks and traps’ to look out for. Scroll down to read our full guide or skip to the relevant service.
Table Of Contents
Conveyancing and Risk Management
The conveyancing process is a legal transaction as much as it is a financial one and as such, there are significant legal and financial considerations and risks.
A Conveyancing Solicitor knows what to look out for and with your instructions, will know what to look out for specifically for you. They can help you understand the risks of the transaction so you can make an informed decision as to how you want to manage the risks, or avoid them altogether.
Certainty and hassle-free settlements
There is a significant amount of paperwork and administration involved in buying or selling real property. Depending on the type of transaction, there may be several parties involved; incoming financiers, outgoing mortgagees, buyer, seller, agents, etc. A Conveyancing Solicitor liaises with the relevant parties and reviews all the necessary paperwork so you are not inundated with information from several sources and left to decipher what needs to be done, and by whom.
Hiring a professional service provider vs. Do it Yourself Conveyancing
Does your contract have a finance clause? Are there any special conditions? Have you been provided all of the relevant documents? What are the relevant documents? Is the Contract binding? Does the Settlement date take into consideration how long your financier requires to finalise the loan documents? Who is liaising with the financier’s settlement team to arrange settlement?
These are just a sampling of what a Conveyancing Solicitor considers (and in most cases, takes care of) when they manage your conveyance.
In addition to reducing the amount of paperwork you would be required to complete, Conveyancing Solicitors often have ‘industry’ contacts who can ‘fast-track’ or escalate the processing of loan documents, or booking in settlements. This can be invaluable when you’re trying to facilitate a quick (and easy) settlement.
Conveyancing Solicitors also have access to the most up-to-date information and contracts. If the Contract of Sale has been prepared by an unrepresented party, they may be using an earlier contract ‘template’ they found on the internet. This may give the purchaser the right to terminate or rescind the Contract of Sale within a prescribed period of time.
It should also be noted that some States have now mandated electronic conveyancing (eConveyancing) which has resulted in practices in Queensland transitioning to eConveyancing with rumours of it becoming mandated soon.
Electronic conveyancing (eConveyancing) has been introduced as a more efficient, accurate and secure way of conducting the settlement and lodgement stages of a conveyancing transaction. It replaces many of the paper and manual processes traditionally involved in property transactions.
How The eConveyancing Process Works
Your lawyer and financial institutions will enter a secure, online workspace where they can interact and transact together online. Within that digital ‘settlement room’, information can automatically feed in from the original source and can populate all documentation while the system cross-checks that information. Documents are created, signed and lodged within the online environment, and parties complete all necessary steps to settle the transaction within that online environment.
While eConveyancing has not yet been mandated in Queensland, several firms and banks are now subscribed users of eConveyancing.
At this stage, PEXA is the leading electronic lodgement network operator (ELNO) in Queensland and only legal/conveyancing firms and banks are able to subscribe to their service. This means that if any of the other parties require the conveyance to be completed via PEXA (or another ELNO), there may not be a “Do it yourself” option available to you and you will need to consult a lawyer who is subscribed to that service.
When to hire a professional (before signing anything!)
Buying or selling property can be very exciting and you may be tempted to quickly sign the dotted line, but it may be worthwhile to have the contract reviewed by a solicitor; especially when it has been drafted by another party.
Whether it’s purchasing your first home or fourth, it’s important to make sure you know what you’re signing up for. Contracts are often laden with hidden clauses or fine print. A small change in the fine print may go unnoticed by the untrained eye, but could have significant consequences for you. Conveyancing Solicitors are trained professionals who know what to look out for and can give you an unparalleled peace of mind.
While this may be an extra charge, it is definitely worthwhile to find out whether there’s a hidden clause in the contract that is perhaps to your disadvantage.
If you have engaged a Conveyancing Solicitor after the Contract has been signed, the Conveyancing Solicitor will let you know of the ‘key’ dates for the conveyance; e.g., when particular conditions are due, when the balance deposit is due, etc. and take you through the settlement process.
How Conveyancing Works – The QLD Process
For the Seller(s)
Generally speaking, a Conveyancing Solicitor acting on behalf of the Seller will usually attend to:
- Reviewing or drafting your Contract of Sale to ensure that the Buyer does not have any rights to terminate that you are not already aware of;
- Ensuring you have met all of the disclosure obligations to the relevant parties; including the Australian Taxation Office or the Buyer;
- Ensuring that you are prepared for critical dates;
- Liaising with your bank(s) to discharge any mortgages. If you have a mortgage, ensuring that your bank’s requirements have been met and they are, or will be, ready for settlement on the settlement date. This is particularly important as your bank will not provide a release of mortgage, or title deed (where issued) unless they are satisfied with the documentation or undertakings provided.
- Liaising with lawyers on the other side of the sale to confirm settlement figures;
- Ensuring that all of your relevant documents are prepared and in order
For the Buyer(s)
If a Conveyancing Solicitor is acting on behalf of the Buyer, they will attend to the following additional duties:
- Undertaking the necessary searches to ensure you are obtaining the property free of encumbrances;
- Making the necessary enquiries to ensure all rates, taxes and relevant service bills are adjusted accordingly so that you are only paying your share from the date of Settlement;
- Calculating and advising you of the funds required to effect Settlement (this includes Stamp/Transfer Duty calculation, Titles Registry/Office registration, agency fees, etc.);
- Liaising with your financier (if applicable) to ensure the relevant cheques are presented at Settlement. If there is no financier, ensuring funds are received in advance of Settlement to ensure there are no issues at Settlement.
- Organising and facilitating Settlement with the relevant parties.
Additional Considerations – Purchasing Real Property Interstate
It is important to note that there are certain legal obligations which differ State to State. If you are considering purchasing real property in another State and are unsure of the legislative requirements, or which legislation even applies – you may want to give serious thought to hiring a Conveyancer or Solicitor.
For example, in Victoria, a Conveyancer acting on behalf of the Seller (also referred to as a Vendor) will prepare a Vendor Statement, a legal requirement pursuant to Section 32 of the Sale of Land Act 1952 (Vic). Alternatively, a Conveyancer acting on behalf of the Buyer will review the Vendor Statement to ensure it is in order.
New South Wales has its own ‘legislative documentation’ which needs to be provided by the Seller. The exchange of Contracts is quite unusual also, in that it involves the buyer receiving the contract signed by the seller and the seller receiving the contract signed by the buyer. Notwithstanding this, the Contract comes into effect and is binding on the parties once each party receives the other parties’ signed Contract.
In addition, buyers in particular should be aware that stamp/transfer duty rates and the process of stamping your Contract is different between the States, with some States requiring a cheque being presented prior to Settlement for stamping purposes. Some conveyancers and Solicitors are authorised by the relevant Office of State Revenue as “self-assessors” and have the ability to ‘stamp’ your Contract in-house. This makes the stamping process much easier.
How much should conveyancing cost?
Professional Legal Fee
Conveyancers and Solicitors may charge anywhere between $500.00 – $1,850.00 for a conveyance depending on the complexity of the transaction. (e.g., residential, off-the-plan, CTS scheme, etc). The more complex the transaction, the more time and consideration it will require.
In the legal world, professional fees are calculated on the basis of time and consideration taken. Is your conveyance interstate? Are there special conditions? What is the purchase price?
Be mindful of the complexity of your conveyance when selecting a conveyancer or Solicitor. As a general rule, you will get the time and consideration you pay for.
It is important to note that a conveyancer’s or Solicitors professional fees do not usually include any disbursements and outlays the firm may incur during the conveyance process. These include the cost of any searches they undertake, photocopies, agency fees, etc.
What are conveyancing searches?
Example Searches Buyers
Most practitioners in Queensland follow what’s called a “Conveyancing Protocol,” – this is a protocol developed by Lexon Insurance. Lexon Insurance Pty Ltd is a wholly owned subsidiary of the Queensland Law Society and is a captive insurer providing professional indemnity insurance to members of the Queensland Legal Profession in accordance with the QLS Indemnity Rule 2005. The Conveyancing Protocol provides conveyancers with a checklist of duties which includes conducting certain searches which must be undertaken to ensure you are equipped with all necessary and relevant information to make informed decisions about your conveyance. These are commonly referred to as the ‘standard,’ or ‘mandatory,’ searches. The purpose of these searches is to ensure that the property being purchased is sold without any encumbrances including any outstanding debts (e.g., unpaid rates, land tax, etc.).
If you are doing the conveyance yourself, you will have to undertake these searches yourself.
These searches include (but are not limited to):-
- Title searches (to ensure the Seller has legal title to sell the real property);
- Where a company is being sold by a company, a company search; and
- Council searches to confirm all land and water rates are up-to-date; and
- Land Tax.
If there are any registered encumbrances, further searches will be conducted to obtain copies of the relevant documents.
Depending on the location of the real property, it may be advisable to undertake other searches. For example, if the property is located in a known mining district, a search of mining tenures or access agreements would be prudent.
Again, the purpose of these searches is to ensure that the purchaser is only purchasing the real property – not any unexpected surprises (liabilities/debts) that may be attached to it.
Example Searches Sellers
A Seller has certain disclosure obligations. To discharge these obligations, a Seller may have to complete several searches.
For example, it is usual practice across most States for Sellers (or their agents, or their solicitors/conveyancers) to provide the Buyer (or their agent, or their solicitor/conveyancer) with the Contract of Sale for signing. Some states have prescribed documents which need to be provided with a Contract of Sale to make it a compliant and binding Contract pursuant to the rules and regulations of the State and/or the governing body. As noted above, failure to include the necessary documents and/or notices in the Contract could allow the Buyer to rescind the Contract of Sale or render the Contract invalid or unenforceable. It may also give the Buyer rights to claim damages or compensation against you.
Generally, these documents include:
- A title search;
- Details of any registered encumbrances;
- Details of any unregistered encumbrances; and
- Where the property is part of a community management scheme, a Disclosure Statement from the body corporate.
Again, depending on the location of the property, other documents may be required to complete a Seller’s disclosure requirements. If you are choosing to do the conveyance yourself, you will need to be aware of your disclosure obligations and have undertaken taken reasonable steps within your power and control to discharge those obligations.
Your turn – Next steps
If you are thinking you can handle your own conveyance, then off you go!
If you’re thinking that the conveyancing process is a lot more onerous and perhaps complicated than you had anticipated and are contemplating hiring a conveyancer or Solicitor, you would be wise, but how do you choose a conveyancer or Solicitor?
Finding a (good) conveyancer
There are many options when it comes to choosing a conveyancer or Solicitor. Some options are cheaper than others, some advertise a fixed and flat rate for the entire conveyance, others may charge extra for any extension requests or negotiations required during the process.
One of the benefits of hiring a conveyancer or Solicitor is peace of mind – so do your research. Ask your friends and family if they’ve used a conveyancer or Solicitor and see if you can get a referral.
If that’s not an option, a quick search online will provide you with a list of conveyancers or Conveyancing Solicitors and in some instances, their rating.
When you’ve narrowed down your list, give your top choices a call. Most conveyancers and Solicitors are happy to give you a quote and talk you through their services. Ask questions if you have them. Good conveyancers and Solicitors will appreciate that you are entrusting them with, in some instances your first, big purchase.