Glossary of Conveyancing Terms
Buying and selling property can be a challenging experience as you go through the process of negotiation, working with your conveyancing solicitor, and generally making sure that you get the best deal possible with the minimum level of hassle.
Conveyancing is the process of transferring a title from one person over to another, and there can be a fair amount of legal jargon and terminology associated with your purchase.
While it’s not legally required that you have a conveyancer for the purchase or sale of property, it’s most often the case that people do work with qualified conveyancers or solicitors due to the complexity of the task. Thus, conveyancers can explain the process to you and go through any legal terms.
No matter whether you have gone through the process many times before or if you are facing your first purchase or sale, it’s important to have a good understanding of what is going on – regardless of your level of experience.
To help you understand the process we have compiled a glossary of the most typical and common terms so that you have the best possible understanding of what conveyancing is and how it works.
This refers to the real estate agent who the vendor (or seller) has engaged to help them to sell their property.
An adjustment refers to the method of calculating how the property outgoings will be divided between the buyer and the seller. Outgoings include things like rates, insurance, and rent. The adjustment process ensures that both parties are only responsible for paying what they owe for the time pertaining to when they are in possession of the property.
A caveat is a legal claim registered on the property title by another person or entity who has a right to it. A caveat needs to be removed for a Settlement to occur.
Certificate of Title
This is an important document that sets out the particulars of the title and dictates who the owners and/or registered proprietors of the title are. If there is a mortgage involved in the property, the mortgagee or the bank or financial institution responsible for the finance will retain the document until it has been paid off. If there’s no mortgage, the Certificate of Title will be held by the registered proprietors of the property.
Cooling off period
For residential property sales, there is a standard five-day period for cooling off. This period starts the day that the buyer gets a copy of the contract that has been signed by both parties. The cooling off period must end by 5pm on the final day of the set period. After this point, the buyer must follow through on their contract. There are exemptions from cooling off periods which include:
• Sales by auction
• Follow up sales from unsuccessful auctions where the buyer was a registered bidder
• Option contracts
• The buyer being a publicly listed corporation or a state or statutory body
Contract of Sale
This is a formal document which is drawn up between the buyer and the vendor (seller) to set out the terms of the sale and purchase. This is drawn up – in many cases – by the vendor’s real estate agent.
This is the professional who is a licensed conveyancer and who is qualified to represent you during the transfer of property from one person or entity to another.
When you buy a property, you must put down a certain sum of money to ensure that you secure your property. This is often 10% of the purchase price, but it can vary as long as both parties agree on the amount. The deposit is held in a trust account which is usually either the real estate’s trust account or your lawyer’s trust account. Any interest which is earned from the deposit will be dealt with in the contract, and the interest will usually go to the party which receives the deposit.
This refers to the costs which are incurred by lawyers or conveyancers, and they are costs which are above and beyond the required conveyancing fee. There is no set fee for conveyancing work, but with competition for conveyancing quite high, it’s often the case that service fees for conveyancing are quite low! But it should be noted that choosing lawyers or conveyancers for their fees alone is not necessarily the best option.
This is a right of use that is listed on a property contract. Examples of easements can include things like shared paths and driveways, electricity lines, and water pipes.
A burden or a charge of a property that is listed in the title – this includes things like mortgages, easements, or leases.
Inquiries (sometimes called Requisitions)
If the purchaser has questions for the seller in relation to the property, they are included under the category of requisitions and enquiries. Many sales contracts include a clause that removes the purchaser from these rights.
This takes place after the purchaser has paid the purchase price or balance, and after they have paid the deposit to the vendor. The vendor must hand over any legal documents that are required as part of the property sale.
When purchasing a property, all the states and territories have some kind of stamp duty – and while there are a few exceptions, they aren’t common. The stamp duty is payable when the property is transferred into the buyer’s name.
This is a legal document which shows the information about the title’s particulars for the property that will be transferred.
While these are some of the most common terms that you’ll come across, there are plenty of terms which may be unfamiliar given that conveyancing may be a new process for you.
We are always happy to answer any questions you may have and would love to help.
Please get in touch with us on 07 3236 2852 today.