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. A conveyancing transaction is often one of the largest financial transactions a person will make, yet the legal process typically moves very quickly providing no room for error.
Signing a contract to buy or sell property creates binding obligations between the parties – the penalties for default on a contract can be significant so it is important to understand the legal implications before entering such arrangements. This involves conducting due diligence before purchasing, preparing a compliant contract and being aware of your legal obligations as a seller, and understanding the terms and conditions of the contract generally.
The role of the conveyancer
The role of a conveyancer is to manage the administrative and legal requirements for a property transaction. From a buyer’s perspective, this involves recommending and conducting a series of searches and investigations to ensure the buyer not only receives clear title to the property but understands exactly what they are purchasing.
Your conveyancer will carry out a range of duties during the transaction including, but not limited to conducting due diligence, reviewing and negotiating contract terms, flagging potential issues, liaising with your lender and agent, arranging and conducting settlement of your matter and generally protecting your interests. There is a lot to do in a short timeframe – even for off-the-plan sales and purchases that may not settle for months, the parties are essentially bound by the terms of a contract after just a few weeks’ negotiation.
From a seller’s perspective, a compliant binding contract must be in place to avoid the disappointment and penalties of being unable to complete a transaction.
The transfer of property may also trigger other financial considerations such as capital gains tax, land tax and transfer duty. Your conveyancer or lawyer will explain these matters to you as well as advising first home buyers on their eligibility for grants or transfer duty concessions.
E-conveyancing – what is it?
For many years, a property settlement involved the physical meeting of lawyers and financiers to check and swap documents and bank cheques, and the lodgement of various documents with relevant government authorities to transfer the title and change ownership details of the property. An error as simple as a misspelt middle name could cause settlement to fail and all parties would need to reschedule. This would have serious repercussions. Not only would payout and settlement figures need to be recalculated and new cheques ordered, the buyer and seller, who would often be in the process of relocating and purchasing / selling other property, would be considerably inconvenienced.
E-conveyancing has revolutionised this process through an electronic platform which enables lawyers, conveyancers and financial institutions to transact online, improving transparency and efficiency and streamlining old manual processes and paperwork.
Online settlements remove the location and time barriers of physical settlements, visually track the progress of each stage of the transaction, and facilitate online lodgement of documents with land registries and authorities and faster access to sales funds.
The online property exchange known as PEXA operates nationally to provide a standardised platform for the completion of online property transactions.
The big picture – it’s not ‘just’ conveyancing
Conveyancing involves an intricate knowledge of property law and an understanding of all the processes involved from contract review through to completion. 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.
Whether you are buying, selling or investing in property, a conveyancing transaction poses significant risk if not professionally handled. While buying or selling a property can be exciting, we are also aware that the fact you find yourself in the property market can come about through a range of major personal and financial changes in life. We aim to take as much pressure off you as possible during this time by keeping you informed, answering your questions and guiding you through this process.