Conveyancing is the term used for the transfer of the legal title of property, which is comprised of two main phases.
- Initially, it commences with the buyer and the seller exchanging contracts, where equitable rights are created.
- The second phase is known as settlement, and occurs when the legal title passes from the seller to the buyer and equitable rights become merged with the legal title.
It may sound quite simple, though in practice, it is actually highly complex and time consuming and absolutely has to be done right.
It is the reason why most mortgage companies will generally insist that a properly trained and experienced legal representative has to undertake the conveyancing, or they will not approve the loan.
How Conveyancing Works
It is the responsibility of the property buyer to ensure that they obtain a good and marketable title to the property, ensuring they are making the purchase from someone who is the genuine owner, and who is actually in a position to make the sale, ensuring there are no external factors which could subsequently prevent the new owner from a future sale.
When you need conveyancing services, you will need to insure the property and arrange for any inspections and inform your lawyers of the financial side of matters.
They will notify the seller’s lawyers they are working for you, and will conduct a property title search.
They will then work with the financier and the other parties’ lawyer to go through the numerous other checks involved, such as any encumbrances or restrictions.
Assuming all is in order, you will need to sign and organize the money for full settlement as instructed by your lawyer and sign any formal declarations, such as form 2.1 Information Statement Form, which is a Stamp Duty declaration, needed if you are going to be living in the property.
This will bring you to the completion stage, known as settlement.
If all has gone well, wherein the other party hasn’t pulled out and the sale is approved at every level, the final settlement can occur.
Your lawyer will generate the stamp generation document, finalize the deal and send written confirmation of the settlement to relevant agents and parties, while remitting the stamp duty to the Office of State Revenue.
The whole thing is a complicated process, but one with your interests in mind.
It is designed to ensure that when the sale is complete, the buyer has secured good title to the property, with all the rights that run with the land, and is aware of any restrictions that may apply in the future, before he is committed irrevocably to the purchase.
Australia operates a land registration and transfer system known as Torrens Title, named after Sir Robert Richard Torrens, who was the Premier in South Australia in 1858. It is a system now adopted by many countries around the world.
This simplifies dealings involving land and improved certainty of land title, with the State creating and maintaining a register of property holdings.
Some aspects of conveyancing are a little easier, but the full process is still something best left to the experts.
While it may sound like something you can do yourself, the time and intricacy of it is such that you are probably better off having it done professionally, with most people considering the act of conveyancing, simply one of the costs associated with moving house.