Queensland Wide
Conveyancing is the process of transferring ownership of real estate from the seller to the buyer.
The conveyancing process is generally the same throughout Queensland.
1. Signing the contract
The first step is for the seller and buyer to agree on the terms of the transaction and sign a contract which should embody the terms for the sale and purchase of real estate.
It is highly recommended that you obtain legal advice prior to signing a Contract in order to protect your rights. This applies to both the seller and purchaser.
The contract should generally provide for: -
· a 5 business day cooling off period;
· a further period to allow for a satisfactory ‘building and pest report’ to be obtained;
· a further period to allow for a ‘due diligence’ investigation to be done on the property; and
· if finance is required to purchase the property for a ‘finance approval’ period.
(between 14 and 21 days is recommended for the building and pest, due diligence and finance periods)
2. Insurance
Commonly, the risk associated with the property will pass to the buyer from the first business day after the contract is signed by both parties regardless of the fact that the buyer is not the owner of the property yet. Therefore, it is imperative that the buyer arrange insurance for the property as soon as the contract is signed by both parties in order that it is covered in the event of damage to the property during the contract period.
3. Pay your deposit when required.
You may be in breach of the contract if you do not pay your deposit when required. It is imperative that you pay the initial deposit which is usually required when you sign the contract or shortly thereafter.
Depending on the terms of the contract, a balance of the deposit may be due at a later date. Diarise this date in order to ensure you do not miss same and be in breach of the contract.
4. Getting the contract to your lawyer
If there is a Real Estate Agent involved advise them to get the contact to your lawyer as soon as possible.
5. Cooling off period
Once the Contract is signed by all parties and received by either you or your lawyer, it is subject to a cooling off period of five (5) business days. During this period you may terminate the contract without providing any reason. Please note a termination penalty may apply.
6. Finance
If the Contract is subject to finance you need to make arrangements with your bank or mortgage broker without delay. Time is of the essence.
7. Building and Pest and Due Diligence Reports
If the Contract is subject to a Building and Pest Inspection and Due Diligence reports you will need to arrange for these or instruct your lawyer to do that. Again, time is of the essence.
If you are not satisfied with the outcome of these inspection reports you may be able to cancel the transaction without any penalty. You will need to discuss this with your lawyer.
8. Searches
Your lawyer will carry out standard searches on the property which may be: -
Title Search;Registered Plan of the Land;Full Council Rates Search;Body Corporate Information Certificate (if unit or townhouse);Company Search (where the seller or the buyer is a company);Court Register Search;Bankruptcy Search;Heritage Search;Contaminated Lands Search;Queensland Transport Search;Flood Search;Land Tax Certificate; and Title Search on the day of settlement.
There are a number of additional searches you may wish to undertake on the property which your lawyer will discuss with you.
9. Once the Contract is Unconditional
Once the Contract is unconditional your lawyer will contact your financier to arrange a time for settlement.
In order for your lawyer to be able to book settlement you must ensure that your mortgage documents have been signed and returned to your bank.
After having signed your loan documents it takes up to a week for your bank to be ready for settlement. Remember… time is of the essence.
10. Stamp duty
In most transactions you will be required to pay stamp duty. Stamp duty may be substantial depending on your purchase price and whether you qualify for any form of concession. Stamp duty is payable within 30 days after the contract becomes unconditional.
You will have to pay the stamp duty to your lawyer when requested to do so. If stamp duty is not paid within the 30 day period after the contract becomes unconditional you may be charged penalty interest by the Office of State Revenue.
11. Arrange a pre-settlement inspection of the property
The buyer usually has a right to do a final inspection of the property prior to settlement. Arrange this inspection as close as possible to the settlement day. The purpose of the inspection is to ensure that the property is in the same condition as when the buyer offered to purchase the property. The buyer also needs to ensure that all chattels remained in the property which was part of the purchase. If the property is not in the same condition as expected the buyer needs to discuss this with its lawyer prior to settlement.
12. Settlement and Settlement Funds
The buyer’s lawyer will prepare settlement calculations which will include taking into account the council rates, water rates and body corporate levies paid or due and ensure that the seller pays its portion up to the settlement date and the buyer from the settlement date.
The buyers lawyer will liaise with the incoming financier and if there is a shortfall of funds available from the incoming financier the buyer will have to provide that shortfall directly to its lawyer. Remember time is of the essence.
Your lawyer will attend settlement on your behalf.
Once settlement is completed your lawyer will contact you and the real estate agent. The real estate agent will then release the keys to the property to you, hopefully with a bottle of champagne.
13. Post settlement
After settlement is completed your lawyer will contact any relevant authorities to advise of the transfer.
14. Safety switch, smoke alarms and pool safety certificate
As the new owner of the property you are required to ensure that the property has a compliant safety switch, smoke alarm and pool safety certificate within 90 days of settlement.
