Conveyancing Process for Buyer and Seller – Handy Guide
Purchasing property or buying a new home involves several legal intricacies. Getting your contract reviewed by a solicitor is of vital importance, especially to identify any clauses that may go against you. This article seeks to explain in general terms the process of conveyancing.
What is conveyancing?
The Conveyancing Act 1919 (NSW) governs conveyancing in the state of New South Wales. The term Conveyance includes any assignment, appointment, lease, settlement, or other deed of any property. There are several terms involved in the process of conveyancing, some of the most commonly used terms are explained here. The task of Conveyancing requires skill and knowledge, if you are wondering what to consider before hiring a firm or solicitor, here is a ready reckoner.
Here is a Step by Step breakdown of the process involved in purchasing a property
Step 1: Inspecting the property before purchase
Inspecting the property before purchasing is particularly important. Generally, a contract for sale of land will not cover the quality on the property. Therefore, the buyer must be very careful and ensure that he/she has had good look of the premises.
In the case of purchase of a house it is recommended that a pest inspection report and a building inspection report is obtained. While the pest report will inform the buyer of pest problems current and/or in the past, the building report will give the buyer a fair idea of the structural problems, if any. In addition, getting hold of the strata report of the unit, townhouse or villa will give the buyer a fair idea about the insurance in place, maintenance problems and any issue noted in minutes of Owners Corporation meetings.
Step 2: Exchanging Contracts
A signed copy of two identical contracts, one for the Purchaser and one for the Vendor, are exchanged between the parties. This makes the contract binding between the parties. Sometimes, the contracts might need amendments, depending on the needs of the parties.
Section 66S of the Conveyancing Act 1919 (NSW) states that cooling off period starts off from the date on which the contract was made. This is usually 5 business days, during which each of the parties to contract can withdraw from the contract. A withdrawal has cost consequences. However, the parties to the contract may include a certificate pursuant to section 66W of the Conveyancing Act 1919 (NSW) to waive off the cooling off rights, thus binding both the parties to the contract upon exchange.
Every transaction attracts stamp duty. The stamp duty is usually payable on or before settlement or 3 months after exchange, whichever is earlier (subject to some exception). Penalties would be applicable in case of late payments.
Step 3 : Settlement
The final step in purchase involves transfer of title and the purchaser receiving the keys.
Step 1: Preparation of a Contract
Before you seek to sell your property, a Contract for Sale needs to be prepared. This involves obtaining documents from various government agencies to ensure that the Contract is complete and complies with the Law.
Step 2: Offer and Acceptance
Generally, an agent is engaged to sell a property. It is important that clear communication is maintained with agent about the price and acceptance of offer.
Step 3: Deposit
A deposit is made by the purchaser post the exchange of contracts. This amount is negotiable between the parties. Usually this amount is 10% of the sale price.
Step 4: Exchange of Contracts
A signed copy of two identical contracts, one for the Purchaser and one for the Vendor, are exchanged between the parties. This makes the contract binding between the parties.
Cooling off period
This is the same as explained above in the ‘Purchase’ section.
Step 5: Settlement
The property is legally transferred to the purchaser. The possession of the property is handed over to the purchaser. Any balance of payment must be made at this stage.
Commercial and Retail lease
A contract between a landlord and a tenant for the rental of commercial premises is called a Commercial Lease. There are several aspects which needs to be considered in a lease document. Some of the key issues to consider are:
1.Term of the Lease
2.Option to Renew
Buying a Business
Purchasing a business involves several issues which require that the contract of sale/purchase is drafted appropriately. Some of the issues to consider are as follows:
- Why is the Business on the market?
- Valuation of the Business
3.Liabilities and assets of the business
4.Revenue and tax liabilities
5.Intellectual Property issues
7.Identification of all contractual rights and obligations of the business.
- Restraint of trade obligations
9.Review of Shareholder agreement
10.Confidentiality and privacy agreement
At Pannu Lawyers, we complete numerous conveyancing transactions each month without any hassle to our client. We ensure that our clients are updated on a regular basis. Our experienced lawyers know how to expertly run settlements from start to finish to ensure this process is as smooth as it should be. Although this can be perceived as quite a daunting experience, especially for first home buyers, our lawyers have the knowledge and experience to ensure that your best interests are protected.
We are conveniently located in Blacktown and our dedicated team of lawyers is ready to assist you in the most important decision of your life. If you are thinking of selling and/or buying a property in NSW, give us a call on (02) 9920 1787 to have a chat and experience the difference.