The licensing of property conveyancers some years ago revolutionised selling. All of a sudden there was low-cost competition. Property Solicitors were horrified to see one of their mainstays of their business being reduced, especially in smaller suburban practices.
Initially there were problems because conveyancers did not have to pay for professional indemnity as did property solicitors. This meant they could charge a lot less but their clients were at risk.
Now they do have the same level of indemnity and both are price competitive. However mention the word ‘conveyancer’ to most property solicitors and you will get an indifferent response.
Normally there is no difference in what property solicitors and conveyancers do as regards to a property conveyance. And in my opinion both are equally competent. However a conveyancer, outside a legal practice, cannot do other legal work for you and does not usually have a law degree.
This can be important if the sale is part of a wider set of circumstances. That is requiring legal input. Or the nature of sale is complicated. Or if the sale itself becomes litigious for any reason.
Coveyancing laws differ between the states and territories. However there are certain principles that are the same across the country. A contract for sale of land must be in writing to be enforceable. All states and territories have passed legislation setting out the form of contracts and the process of exchange. This is driven by notions of consumer protection. By ‘consumer’ the legislators are normally thinking only of buyers. Strangely disregarding the fact that most buyers become sellers too.
The contract must be prepared before you can legally allow buyers to inspect. Your real estate agent must have a copy available for them to view. Please do not ignore this as there can be substantial penalties if you get caught. The problem sometimes arises where the real estate agent knows you might think of selling at ‘the right price’. And then wants to bring through a single buyer. You still need to have the contract prepared. Another common issue is where contract is incomplete. You are asking for trouble to take the risk and have the property shown.
However, the requirement to have the contract pre-prepared has its advantages. You can have terms written in to suit yourself as far as legally possible. This is especially useful where you really want a longer settlement to give you time to buy after having sold. It also means that the contract is ready to be exchanged as soon as a sale is negotiated. This is significantly better than in the past when there were often considerable delays waiting for a contract be prepared. And only then finding out there was a legal problem with the property.
Once prepared, the contract can still be modified. Usually this is part of the negotiation process. Any changes to the draft must be made prior to exchange. If either the seller or buyer want to make a change after exchange it has to be by mutual agreement. Otherwise you are both bound by the contract as signed.
Some jurisdictions (New South Wales, Victoria and South Australia) work on the basis of ‘vendors disclosure’. And ‘implied warranty’ which basically means it is your responsibility to inform the prospective buyer. Like a whole lot of information about the property in the contract, so they can make an informed decision. This includes details the property’s title and any restrictions on it. Your particulars and those of any mortgagor, information on planning, sewer and drainage, building permits, council notices etc. Much of this is contained in mandatory annexures. Such as, a zoning certificate from council and a sewer diagram from the water authority.
The precise list varies from state to state. Knowingly or recklessly providing false information or failing to provide all required information is an offence at law. And the penalty is a fine.
In the states with vendor disclosure obligations, instead of ‘buyer beware’ it is now ‘seller declare’ on these key legal elements.
However it is still ‘buyer beware’ for things like physical condition, permitted use and the use of development of joining properties.
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