The process of buying a property can seem overwhelming. With such a major investment, it’s wise to get a good understanding of exactly what’s involved in the process.
What is conveyancing?
Conveyancing is the legal process of transferring land ownership from the seller to the buyer.
Why do I need a solicitor?
For many, purchasing a home is one of life’s biggest investments, both emotionally and financially. So it stands to reason that you would want to minimise any risk by appointing someone who can provide trusted advice and protect your interests.
Unlike a conveyancer, a solicitor has the necessary expertise to deal with all aspects of the buying process. They can advise you on settlement procedures and most importantly, the contract of sale. This is the fundamental area for any purchase that can result in nasty surprises along the way, if not carefully reviewed. With extensive and up-to-date knowledge of the law, a solicitor will be more equipped to pick up abnormalities and handle any legal issues that may arise such as disputes or pre-contractual negotiations.
A solicitor will also be able to provide a broader range of services and advice on matters such as powers of attorney and wills.
What is the role of a solicitor when I am buying a property?
Timing and documentation are key elements that require the legal knowledge of a solicitor. Generally, they will carry out the following:
- Advising you on matters we highly recommend you investigate before signing a contract, or advising you on the contract once you have signed;
- Arranging for searches and certificates;
- Preparing a caveat to protect your interest in the property, if so requested;
- Liaising with your lender and sending any required documents;
- Preparing the transfer of land;
- Preparing an adjustment of the rates on the property between you and the vendors;
- Arranging settlement with all parties;
- Notifying the statutory authorities of the change in ownership of the property;
- Preparing all documentation required by the State Revenue Office; and
- Reporting to you
What do I need to do?
- Measure the property and carry out a final inspection when nearing settlement to ensure that the property has not been damaged
- Send the contract of sale and Vendor Statement to your solicitor
- If applicable, arrange building and pest inspections
- Regularly communicate with your lender to avoid delays
- Sign all documents when required
What are the costs involved?
Our professional fees are fixed at $599.
The disbursements that we incur on your behalf are passed on to you at the cost we are charged. If you are purchasing a unit with an owners corporation, we estimate the total to be approximately $400. If you are purchasing a house, the disbursements will be approximately $200. We will be able to provide you with a better estimate once we have reviewed the contract of sale.
At what stage will I need to pay fees and disbursements?
All fees are payable at settlement.
What is ‘land transfer duty’?
Formerly known as stamp duty, this is a payment to the State Revenue Office to transfer land from one person to another. Transfer duty must be paid within 30 days of the date settlement or else you will incur penalties. There are also a range of discounts and exemptions available for first home buyers.
Do I need insurance when I am buying a property?
Whilst the vendor is generally liable for any damage to the property up to the date of settlement, it is advised that both parties obtain insurance from the date of sale. This is to avoid any potential problems where the vendor may not be insured or their insurance is inadequate.
What are title requisitions?
A requisition is a demand from the purchaser to remove any encumbrances from a title prior to settlement such as covenants, mortgages or easements. Title requisitions can only be delivered to the seller if the contract does not specifically address the defect.
What if the vendor cannot produce the certificate of title on the day of settlement?
The seller can apply for a substitute title however; it is advised that you wait for this application to be granted before settling.
What if title was lodged by the seller before settlement?
Your solicitor will need to search any prior unregistered dealings to ensure that the title is clear. It is not a requirement that the title is registered by the day of settlement, it is only a requirement that the title is capable of being registered.
What if I have not received a Vendor’s Statement or the information provided is inaccurate?
If the seller fails to provide the statement or gives false information, a written note of caution should be sent to the vendor. The most effective way of preventing this from happening is to ask as many questions as possible.
What if the property is not vacant on the date of settlement?
If the property was sold as ‘vacant possession’, you have a right to advise them of your intention to withdraw from the contract given that an essential term has been breached. However, rescission would not be warranted if the seller had vacated the property but simply left a minimal amount of goods behind.
If the property was sold ‘subject to an existing tenancy’, yet the tenants have not vacated the property, you would need to issue a notice to vacate in accordance with the Residential Tenancies Act.
What if the property has been damaged prior to settlement?
You are entitled to inspect the property during the 7-day period prior to settlement, which is normally arranged by your real estate agent. If you find that the property has been damaged, you should advise the seller immediately so that an attempt can be made to try and rectify its condition prior to settlement. In this situation, you may also be entitled to a reduction of the purchase price and to claim compensation for economic loss such as accommodation and storage.
Importantly, the damage must be substantial to delay settlement such as broken windows or large holes in the walls. Fair wear and tear would not be a valid reason and would result in a breach of contract. The only option would be to claim compensation after settlement.
Buying a property? We can help. We’ve acted on hundreds of property conveyances across Melbourne and pride ourselves on efficient, hassle-free, professional outcomes with clear, easy communication.
Call Gleeson and Co Lawyers on 9534 3002