What is Conveyancing?
Conveyancing is the process of transferring ownership (or title) to a property from one party to another and includes all of the steps involved in the transaction.
How do you enter into a Contract for Sale?
Once you have found a property you would like to purchase will be asked by the real estate agent to sign the contract for sale and pay an initial deposit of 0.25% of the contract price. This will remove the property from the market and stop the vendor from selling to another party.
Once a purchaser has entered into a Contract for Sale if for any reason can they get out of it?
When a purchaser enters into a contract for sale they have something called a cooling-off period which is normally the length of five (5) business days. The cooling-off period is in place so that if for any reason the purchaser does not want to go through with the purchase they can rescind (pull out or cancel) the contract. It is important to note that if you choose to pull out you will forfeit the 0.25% deposit paid when signing a contract to the vendor. However, there is no cooling off period if you have instructed your lawyer/licensed conveyancer to sign a section 66w certificate which waives your cooling off right. A cooling off period does also not apply in an auction. It is important to have your loan formally approved and inspections carried out before attending an auction or before waiving your cooling off rights.
What inspections need to be carried out?
Before the cooling-off period comes to an end, pest & building inspections should be organised to ensure the property is structurally sound and free of pests’ infestation. If buying strata property, you should order strata inspection.
What is a survey report?
The survey report will identify the property, show the position of the buildings and also fences in relation to the correct boundaries and show any encroachments onto the land or on the neighbouring property. If the seller does not have a recent survey attached to the contracts, your lawyer or conveyancer may obtain a survey report.
What happens after contracts have exchanged?
It can take four to eight weeks between exchange and settlement. During this time enquiries and searches are made and documents prepared by your lawyer or conveyancer.
- The transfer document is prepared and stamped at our office together with the original contracts. The transfer is then sent to the seller or his representative.
- All relevant enquiries relating to your land are made.
- Your lender will prepare the mortgage document, which sets out the terms and conditions of the loan. Requisitions on title are sent to the seller or the seller’s representative. Requisitions provide the purchaser with information from the seller, which may not have been previously disclosed or discovered during inspection of the property. An example is whether there are any disputes relating to fences with neighbours.
- Close to settlement a settlement statement is sent to the seller. It details the final amount owing including the adjustments for rates and taxes as the date of settlement. The seller will direct your lawyer or conveyancer how the cheques are to be drawn.
When should I apply for a loan?
You should submit a formal application to your lending body for a loan on the property as soon as possible. You should not exchange contracts for the property (with or without the cooling off period) before finance has been approved in writing. With your formal application you will have to pay fees to the lending body, such as establishment and valuation fees. The lending body will value the property to determine whether the property is adequate security for the amount of the loan. The lending body leads a percentage of the valuation of the property, not a percentage of the purchase price.
What insurance will I need if I am buying?
If you are buying a home unit, a certificate of currency should be obtained from the body corporate’s insurer to make sure the property is adequately insured. Your lender requires details and proof of this on or before settlement. If you are moving into the property before settlement, the seller would probably want to make a special arrangement whereby you are responsible for insurance from the time you take possession.
What is a final search?
On the day of settlement it is imperative that a final search of the title is obtained from the land titles office. This is to ensure that the property is clear from any interest or restrictions, which may have been recorded between the date of exchange and settlement.
When should I carry out a final inspection?
A final inspection of the property should be carried out the day before or morning of settlement to ensure that the property has not been damaged and all fixtures and fittings listed in the contract are intact.
When does settlement occur?
Settlement is the conclusion of the transaction between the vendor and the purchaser. While settlement normally occurs 6 weeks (42 days) after exchange, the settlement period can be altered to suit the particular transaction or to suit the needs of the parties.
What is the first step of preparing a Contract for Sale?
Before placing any property on the market, the seller must have a copy of the contract of sale prepared by a solicitor or licensed conveyancer. Attached to the contract are the other certificates the seller must provide, namely:
- a Section 149 Certificate from the local council, detailing zoning and other information
- a sewerage diagram
- a copy of the title folio from the Land Titles office
- copies of all documents creating easements or restrictive covenants
- a cooling off period statement has to be provided
- a notice directing the parties to section 52A of the Conveyancing Act Sale of Land Regulations
- if the property is strata unit, the seller must attach copies of the folio of the register for the lot and common property and a copy of the strata plan.
What is a Retail Lease?
A lease is deemed a retail lease only if the Retail Leases Act 1994 applies. This is important to determine early on especially if you are a landlord. The Retail Leases Act imposes compulsory disclosure obligations on the landlord that must be complied with in order to have a valid and enforceable lease.
What should I consider as a tenant?
Among other things, you should consider:
- The initial rent and method of increasing the rent.
- Your ability to transfer or assign the lease, and the expense of doing so.
- The possibility of subletting the premises.
- Your rights to end the lease if the premises is damaged or destroyed.
- Duration of the lease and your right to renew it.
- Who pays for outgoing and other charges.
- The types of insurance required and who contains it.
- The consequences of failing to pay rent and ways of resolving disputes.
Can I sub-lease a commercial/retail premises?
In most cases you will only be able to sub-lease your premises with the consent of the landlord. If you wish to sub-let or lease your property you will need to negotiate this prior to entering into your lease.
Do I need a LAWYER to review the lease?
No, however tenants often make the mistake of not obtaining legal advice prior to entering into a lease agreement. They trust what has been negotiated is included in the lease by the landlord’s lawyer. It is often a recipe for disaster that is only found out by the tenant when an issue arises.
Who pays for a lease to be prepared?
If the lease is a retail lease under the Retail Leases Act, then the landlord pays for the legal costs for the lease to be drawn up and for any reasonable amendments made. Other than under a retail lease, the legal costs for a lease to be drawn up is usually negotiated between the landlord and tenant. However it is common for the tenant to pay for the landlord’s reasonable legal costs as well as their own in relation to a lease agreement.
Can a Licensed Conveyancer act for me in a Property dispute?
A licensed conveyancer is not able to provide legal advice and or act in a dispute for a party in relation to property. A licensed conveyancer may only act on your behalf in relation to a transaction regarding the transfer of title of property. If you have a dispute in relation to a property transaction you will be required to instruct a lawyer to act on your behalf. This is the benefit of Coutts where we have a team of experienced licensed conveyancers and property lawyers who understand your rights in a property law transaction or dispute.