Catherine HallgathPartner Swaab Attorneys is a Sydney based commercial law practice. Our aim is to provide legal solutions which are cost - effective and specially tailored to our clients needs.
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 - What is conveyancing?
- What are the costs and expenses?
- How Do I List My Property for Sale?
- What are the Ways to Own property?
- The Contract
 1. What is conveyancing?"Conveyancing" is the legal term for transferring legal ownership of title from one owner to another. It has been traditionally carried out by solicitors, but since 1993 can be carried out by licensed conveyancers.
Lawyers and licensed conveyancers are covered by professional indemnity insurance policies. A buyer losing money because of their lawyer's or conveyancer's negligence is protected to the extent that these professionals are compulsorily insured. In December 1990 solicitors adopted a code of conveyancing practice for residential conveyancing.
Because legal fees are deregulated in New South Wales and there is fee competition, the professional fees for buying or selling property are not that high. Most solicitors and conveyancers when engaged by a client will agree on a fixed fee for professional services and give an estimate of out-of-pocket expenses for the job. 2. What are the costs and expenses?Apart from the purchase price of the home, buyers will have to pay extras, such as government stamp duties on the purchase price and on any mortgage. The stamp duty - a State Tax - is a major cost. Other costs include:
charges made by lending institutions for establishing a mortgage, valuation, etc and in some cases, the lender's legal fees;
house insurance (usually replacement and reinstatement policy);
government registration fees at the Land and Property Information Office;
legal and search fees for conveyance;
adjustment of rates, water rates, strata levies, etc;
electricity and gas connection fees and removalist's charges;
fees for a survey report and building certificate;
quality inspections such as strata inspection, building inspection, pest inspection certificates. 3. How Do I List My Property for Sale?Prior to advertising a property for sale or inviting any offers to purchase, an agent must have available a draft Contract for Sale of Land which complies with all the relevant legislation.
By the provisions of the Auctioneers & Agents Act 1948 prior to listing the property, the agent must be authorised in writing to do so. This authorisation can take several different forms:
3.1.1 Exclusive Agency Agreement
This basically means that the vendors are using only the agent named in the agreement to sell the property. If the property is sold by another agent or even by the vendors then the agent will usually still be entitled to the authorised sales commission.
3.1.2 Sole Agency Agreement
The same provisions apply as above. However, the vendors are entitled to sell the property, independently of the agent, without being liable for commission.
3.1.3 Auction Agency Agreement
Where the property is to be submitted to auction, a separate agreement is usually executed. It includes some exclusive agency period after the auction date but the length of this period is negotiable.
3.1.4 General Listing Authority
This merely authorises the agent to list the property and if sold by that agent it entitles that agent to commission. There are also various forms of multiple listing authority, such as multi-list and various franchises' own authorities.
The listing authorities usually itemise the scale of the agent's commission and contain various other details, for example title particulars, special conditions attaching to the sale, liability for advertising expenses etc.
They also usually contain an irrevocable authority that after exchange the agent will hold the deposit moneys in the agent's trust account. It is important that this is amended before execution if for instance the vendor's solicitors are to invest the deposit or the vendor needs the deposit released.
3.2 WHAT ABOUT AN AUCTION?
Basically an auction contract is drawn the same way as any other contract. It should be sent to the agent as soon as possible after receiving instructions so that it is available for prospective bidders to examine prior to the auction. The contract must of course comply with all the usual requirements.
Some practitioners obtain additional disclosure documents for auction contracts, for example - pest reports, building reports, fresh surveys etc to make it as easy as possible for prospective bidders. 4. What are the Ways to Own property?4.2.1 Co-ownership
When more than one person is buying a property, they may buy as joint tenants or tenants in common. The choice as to co-ownership should be stated in the contract.
4.2.2 Joint Tenants
Joint tenancy is favoured mostly by people in a close relationship. When the coowners are joint tenants, they are all entitled to ownership and possession of the whole property, but when one dies, the survivor(s) automatically inherit the deceased's share of the property - the property does not form part of any estate devolving under the deceased person's will.
4.2.3 Tenants In Common
Tenants in common own separate fractional shares in the property. The shares don't have to be equal. Each tenant in common can sell, mortgage and otherwise deal with their share of the property, and can leave it to anyone in their will. Tenancy in common is often used for business enterprises or when people buy real estate as partners for profit making ventures. 5. The ContractThe contract is the most important part of the transaction. An agreement for the sale of land must be in writing with a note or memorandum signed by the person (or their agent). It should contain 'the four Ps'- price, parties, property and promise.
The most commonly used form of contract is one published by the Real Estate Institute and the Law Society. This contract is designed to be even-handed between sellers and buyers. Page one of the contract is a particulars page that identifies the selling agent, if any, the parties (buyer and seller), the price, the deposit, the full description by address, the nature of improvements and the particulars of title. The furnishings and chattels sold should also be listed: Buyers should take care that any improvements to the property are described and that anything excluded from the sale is also clearly shown.
A settlement time (normally 42 days) is also provided in the contract. On completion of the particulars page and incorporation of some essential documents the contract is ready to be used. Home buyers should check to see there have been no changes to the standard provisions. These routinely call for vacant possession and adjustment of rates on settlement. A buyer should be aware of, and negotiate changes to, any special conditions which provide:
'time of the essence' conditions
for release of deposit to the seller before settlement rather than its retention in trust or investment
for payment of interest for delays in settlement
clauses favouring the seller and thus altering the 'even-handed' contract
Special conditions included in a draft contract available at the point of sale do not have to be accepted. Buyers should note carefully whether there have been any changes by deletion or inter-lined addition to the printed form of contract.
Every contract of sale of residential land must include a statement in a prescribed form about the cooling off period. If the statement is not included, the buyer may withdraw at any time before the sale is finalised.
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