The Conveyancing Process: Who Can Do It, What It Involves and How Important It Is To Get Right
A vital component of the purchase of a property, conveyancing is generally understood to be the whole process of putting a property on the market. It concerns the legal transfer of property from one party to another or the granting of a hindrance like a mortgage for a property. In Australia, a lawyer or a licensed conveyancer usually carries out conveyancing. Proper attention and understanding of the conveyancing process - what it involves and the time it takes, is an important consideration for all buyers and sellers of property.
Conveyancing usually happens in three stages; before contract, before completion and after completion. In Australia, the most important aspect of the process usually involves a title search, which will explain all the parties that have interests in a property, for example a bank will have an interest in a property in the form of a mortgage. These interests are set out in the Certificate of Title, which outlines the current owner and any mortgagees on the property.Additionally the process will involve checking for obstacles (restrictions on the use of the property), ensuring any special conditions mentioned in the contract are met, making sure rates, land tax and water consumption charges are paid by the proper party, arranging for the payment of fees and charges and also preparation of legal documents.
Rightfully so, consumers are often more concerned about the cost of conveyancing rather than the process involved in it. Up until 1994 there were set scales by which practitioners charged costs for this kind of legal work, although today most fees are set according to supply and demand of the market. Â There are also do-it-yourself kits available for those that wish to undertake the process themselves, although this is not usually recommended because of the legal and procedural problems that can arise from title transfers and investigations. Any problems within this process can often cause detrimental ripple effects through the entire legal exchange process. So while the cost of conveyancing may seem a nuisance at the time, improper understanding of the procedures involved can have devastating after affects on your continuing legal rights over the property.
Additionally, buyers are often concerned about the length of time the conveyancing process takes. While it is important to remember that the steps taken to transfer the title of property can be completed in a very short space of time, the process itself can take up to six weeks (or even longer). The time it takes will depend on whether there is a need to investigate the quality and the title of the property being sold, the need to be advised on legal issues, government legislation and negotiation of contractual conditions. Usually investigations tend to take up the most amount of time in this process. These investigations will often include things like zoning searches (permitted land use according to the local planning scheme) road proposals and may also include heritage listings, land tax, contaminated sites and building approvals that could affect the value of a property or the owner's right to enjoy it.
It is the responsibility of the buyer to ensure that they obtain a good title to the land. This means ensuring that the seller is the owner of the property and has the right to sell it. Additionally, they must make sure that there is no factor that would impede on a mortgage or re-sale of the property. The buyer of the property must establish this title through proper utilization of the conveyancing process.
The person conducting the conveyancing remains liable for securing the transfer of legal ownership from one party to another. The conveyancer must take whatever steps are necessary to properly carry out this transfer and thereby complete the conveyancing procedure. The process is usually regarded as complete when the transfer documents have been lodged at the Land Titles Office.
It is important to remember that conveyancing does not take place until after the sale has been finalized. The negotiation process, including the drafting of the written legal document which sets out the terms and conditions of the sale, is a legal process and is not one that requires conveyancing. It is a legal process because it creates the legal relationship that binds the parties involved in the sale. Given that conveyancing is the process of transferring ownership of real estate from one person to another, there is no need for conveyancing services until such time as a sale has taken place. It is only after the sale that the purchaser acquires the right to require a transfer of ownership.
Financial planning advisory group Strategy Steps director Louise Biti says "The complexity of the conveyancing process represents the inherent value that we place in both land and property. In Australia, as is the case with most countries, we view property as a financial asset, so much so that lending institutions will accept property as security for a loan (in the form of a mortgage). We continue to be more comfortable putting our money into bricks and mortar than into other forms of investment".
"People will go out and borrow $100,000 to buy an investment property but they won't go out to borrow $100,000 to invest in shares," Biti says.
This is why the proper legal transfer of title and the flow-on processes of conveyancing are such a vital part of the transaction process to get right. Whether you are a long-term investor or a first homebuyer, the importance of understanding the time involved in conveyancing and the operational procedures it requires cannot be understated.
Conveyancing usually happens in three stages; before contract, before completion and after completion. In Australia, the most important aspect of the process usually involves a title search, which will explain all the parties that have interests in a property, for example a bank will have an interest in a property in the form of a mortgage. These interests are set out in the Certificate of Title, which outlines the current owner and any mortgagees on the property.Additionally the process will involve checking for obstacles (restrictions on the use of the property), ensuring any special conditions mentioned in the contract are met, making sure rates, land tax and water consumption charges are paid by the proper party, arranging for the payment of fees and charges and also preparation of legal documents.
Rightfully so, consumers are often more concerned about the cost of conveyancing rather than the process involved in it. Up until 1994 there were set scales by which practitioners charged costs for this kind of legal work, although today most fees are set according to supply and demand of the market. Â There are also do-it-yourself kits available for those that wish to undertake the process themselves, although this is not usually recommended because of the legal and procedural problems that can arise from title transfers and investigations. Any problems within this process can often cause detrimental ripple effects through the entire legal exchange process. So while the cost of conveyancing may seem a nuisance at the time, improper understanding of the procedures involved can have devastating after affects on your continuing legal rights over the property.
Additionally, buyers are often concerned about the length of time the conveyancing process takes. While it is important to remember that the steps taken to transfer the title of property can be completed in a very short space of time, the process itself can take up to six weeks (or even longer). The time it takes will depend on whether there is a need to investigate the quality and the title of the property being sold, the need to be advised on legal issues, government legislation and negotiation of contractual conditions. Usually investigations tend to take up the most amount of time in this process. These investigations will often include things like zoning searches (permitted land use according to the local planning scheme) road proposals and may also include heritage listings, land tax, contaminated sites and building approvals that could affect the value of a property or the owner's right to enjoy it.
It is the responsibility of the buyer to ensure that they obtain a good title to the land. This means ensuring that the seller is the owner of the property and has the right to sell it. Additionally, they must make sure that there is no factor that would impede on a mortgage or re-sale of the property. The buyer of the property must establish this title through proper utilization of the conveyancing process.
The person conducting the conveyancing remains liable for securing the transfer of legal ownership from one party to another. The conveyancer must take whatever steps are necessary to properly carry out this transfer and thereby complete the conveyancing procedure. The process is usually regarded as complete when the transfer documents have been lodged at the Land Titles Office.
It is important to remember that conveyancing does not take place until after the sale has been finalized. The negotiation process, including the drafting of the written legal document which sets out the terms and conditions of the sale, is a legal process and is not one that requires conveyancing. It is a legal process because it creates the legal relationship that binds the parties involved in the sale. Given that conveyancing is the process of transferring ownership of real estate from one person to another, there is no need for conveyancing services until such time as a sale has taken place. It is only after the sale that the purchaser acquires the right to require a transfer of ownership.
Financial planning advisory group Strategy Steps director Louise Biti says "The complexity of the conveyancing process represents the inherent value that we place in both land and property. In Australia, as is the case with most countries, we view property as a financial asset, so much so that lending institutions will accept property as security for a loan (in the form of a mortgage). We continue to be more comfortable putting our money into bricks and mortar than into other forms of investment".
"People will go out and borrow $100,000 to buy an investment property but they won't go out to borrow $100,000 to invest in shares," Biti says.
This is why the proper legal transfer of title and the flow-on processes of conveyancing are such a vital part of the transaction process to get right. Whether you are a long-term investor or a first homebuyer, the importance of understanding the time involved in conveyancing and the operational procedures it requires cannot be understated.