Unquestionably, the want to own your own home is very plain, and very simple.
Absolutely, the buying of one is not.
For a property transaction to be done lawfully, there is much work involved. It makes matching consumers with the right financial products look like child’s play.
While you can certainly do your own conveyancing, the documentation required and time constraints mean most people engage the services of a solicitor, property lawyer or licensed conveyancer.
A conveyancer specialises in the legal aspects of buying and selling real estate, is generally cheaper than a solicitor, and is licensed to guide you through the process of a straightforward property acquisition. A solicitor has broader knowledge of the law, and can advise on issues outside the realms of the property transaction itself – like any tax implications – and is better equipped for more complex purchases containing more risk.
Conveyancing documents serve as the indelible record of property ownership.
The Contract of Saleis the legally binding document of all terms and conditions agreed upon between the vendor and purchaser. Frankly, anything can be agreed upon, which is what makes the formation of the document so important; once it’s signed, ownership of the property is rightfully and indelibly transferred.
Every aspect of a property exchange has to be very specific, and unreservedly correct, in order to uphold its legal recognition. Without exception, the Contract of Sale must reflect the proper identification and spelling of the parties involved, and the precise definition and address of the property, which consists of the land, any building improvements, and all fixtures, fittings and inclusions. Any and all money considerations, including the agreed price, are imperative in the transfer of real estate.
Other essential components that constitute a valid contract – such as offer, acceptance and intention – are also part of the Contract of Sale.
Obviously, the Loan Contract, or Loan Agreement outlines the terms of the loan between the buyer and lender and can be used as a record for the loan taken for the purchase of the property.
It details the loan amount and period, whether it is at a fixed or variable rate, all associated fees and charges and any additional features of the loan like redraw or offset facilities.
The Certificate of Land Title is always provided to the purchaser by the seller, and is just one way of safeguarding the buyer’s best interests. It details any alterations that have been done to the property in the past, and any restrictions it has in terms of caveats or heritage protections.
It will also include any easements, or existing mortgages held.
A Section 32 Statement, also known as a Vendor’s Statement is another essential document. (They’re all essential..!)It holds all information that potentially affects the land being sold, regardless of the affect it may have on the purchaser’s decision to buy.
Although there exists the concept of caveat emptor, the vendor is still required to make various disclosures to the purchaser. They must be provided by way of a signed statement before the purchaser signs the contract of sale. It’s often annexed to the contract; however, technically it should be separate, and must contain any information regarding:
- Rates, taxes, charges or other similar outgoings;
- Easements, covenants or similar restrictions (and any existing failure to comply);
- Zoning and the applicable planning scheme;
- Whether the land is in a bushfire prone area, or liable for a Growth Areas Infrastructure Contribution;
- Any mortgage that is not going to be discharged;
- Building permits;
- Any insurance policies;
- Any notice or order from a government department or public authority affecting the land;
- Livestock disease or contamination for agricultural purposes;
- Any intention to compulsorily acquire the land;
- Any owners corporation affecting the land;
- Connection of services (electricity, gas, water, sewerage and telephone);
- Evidence of your right to sell the land; and
- Staged subdivisions.
You can see why DIY conveyancing is a beast for which few have the fortitude to wrangle.
In addition to the those disclosures, vendors and agents must also answer all factual questions put to them by the buyer as fully and truthfully as possible. It includes any building defects or existing infestations; the existence of combustible cladding or asbestos in the property; any neighbourhood development proposals likely affect the purchaser’s use and enjoyment of the property; and if the property was the scene of a serious crime, including a murder, or as a manufacturing site of illegal substances.
They must also not knowingly conceal any material facts from the prospective purchaser. It’s a criminal offence to induce any person to buy land or property where material facts are knowingly concealed, or where false representation or promise is recklessly made.
Failure to adequately disclose, or knowingly making false representations, gives the purchaser the right to walk away from the deal prior to settlement, and carries a fine of $AU20,000 and up to 12 months in prison.
That’s enough to make a dint in the sale you just made…
The Contract of Sale doesn’t give access to the purchase property straight away. Those details are in the Settlement Statement, and in it is information on the purchase price (like you’ve forgotten it already), deposit amount, rates estimate and all government fees and Stamp Duty.
Last but not least is the Transfer Deed, which registers the transfer of ownership of land; and not be confused with the Title Deed, which proves legal ownership.
This signed and witnessed document is lodged by the vendor at the relevant state or territory Deeds Office as the official record of who owns the land, as of when, and how much was paid.
The requirements that must be upheld in order for a sale contract to be viable are complex, even if it ostensibly seems quite straightforward.
Conveyancing quite literally, makes or breaks a contract. Which is why it’s best handled by those with the knowledge and the expertise. As a condition of licensing, conveyancers and solicitors, must carry professional liability insurance, so the basic question has to be:
If you do your own conveyancing and naivety and negligence means you lose out financially, who y’ gonna sue? You?