Conveyancing is the process involving the transfer of legal title of real property from one person to another. This essential conveyancing process ensures that the buyer obtains good title to the property. It also secures all the rights that run with the property. Furthermore, it ensures you receive notification of any restrictions or rights in advance of your purchase.
For most people, buying a property is the most significant transaction they will enter into in their lifetime. This is true from both an emotional and financial point of view. Consequently, detrimental consequences can occur if the process is not done properly.
Our legal team can help you navigate this journey. We will ensure that you get good title to the property you are buying. Additionally, we verify that there are no restrictions on the property that you are unaware of before you buy.
Why do searches & enquiries?
When buying a property, the seller has some statutory obligations to disclose certain things before the contract is signed. However, the seller has no obligation to tell you everything about the property or its defects. In fact, many enquiries do not occur until after the contract is signed or becomes unconditional.
The onus remains on the buyer to undertake searches and enquiries to satisfy itself in relation to the property. The old saying “Buyer Beware” applies here. This is because the contract may not protect against adverse search results in all circumstances. Thorough searches help you find out if current plans affect the property. They also reveal future plans, government licenses, or inclusion on registers such as heritage listing or environmental management.
Mortgages or encumbrances registered on title
You must review the searches attached to the contract to confirm the seller actually owns the property. This review also confirms they have the legal right to sell it to you. Furthermore, searches provide vital information about any encumbrances on the title.
Examples include:
- Mortgages: These are registered against the property and must be removed from the title before settlement.
- Easements: These give the local council or utility companies the right to use a portion of your property. This might be for sewerage, electricity, telephones, or gas.
- Restrictive Covenants: These affect how you can use the property. For example, a neighbourhood may have building size and design requirements.
Special Conditions – avoiding the traps
Your lawyer can include special conditions in the contract before it is signed. These deal with specific issues not covered by the standard form contract. These issues often arise from searches or specific property features, such as a pontoon attached to the property.
A special condition provides a buyer with additional protection or rights. For example, you could make the contract subject to satisfactory searches or completed work. It can also oblige the seller to compensate the buyer for adverse search results. Where the contract is already signed, you generally have no opportunity to add these conditions. However, in limited circumstances, you might negotiate amendments if there is a cooling off period or while the contract is still conditional.
Examples of useful special conditions
If a buyer signs a standard contract unaware of building or pest issues, there may be no protection. This applies even if you later discover sinking foundations or termite infestations. If you carry out a building and pest inspection before entering the contract, you may have the possibility of addressing those problems in the agreement.
If you are buying a property that requires repairs or maintenance, you may wish to make the settlement conditional. You can specify that work must be completed to a satisfactory standard before you settle the purchase. If there is a special condition in the contract, a buyer may be able to delay or refuse to settle if the issues are not rectified.
This is general information only, and you should obtain professional advice tailored to your circumstances. If you or someone you know wants more information or needs help or advice, please call our Raymond Terrace office on (02) 4987 3344 or email [email protected].