What is conveyancing?
Conveyancing is the process of transferring the ownership of a legal title of property from one entity to another. The property can be either a residential house, a unit, vacant land or commercial land or unit.
The process in Queensland is complex as there are around twenty pieces of legislation, contract conditions, case law and practice protocols to be followed.
Both the buyer and the seller have certain legal obligations under the contract.
Buying property or selling property is a big commitment, and getting a Contract from an agent can be daunting. However, worries usually stem from not knowing what to look out for.
It is important that buyers look out for things such as the correct buyer entity and conditions such as finance, building and pest and due diligence being inserted into the contract.
Sellers should ensure that they have a healthy deposit being paid to them, that they include a seller signed disclosure statement (if selling a property within a Community Titles Scheme), they disclose all encumbrances and matters affecting the property and tenants (if any).
It is important that you obtain legal advice before signing any contract.
What is a conveyancer?
A conveyancer is usually a paralegal who is trained to work in the property sector of law. They work closely with solicitors to ensure that the transfer of ownership of a property is smoothly processed throughout the course of the conveyancing transaction.
This includes things such as the initial review of a contract, the preparation of documents for the transfer of title and liaising with banks and other solicitors up until the settlement date, when the transfer occurs.
What does your conveyancer do?
A conveyancer or a lawyer will usually act for you from start to finish in the conveyancing transaction.
It is very important that you obtain legal advice prior to the execution of a contract, which means you contact your lawyer to review your contract before you sign it. This applies for both buyers and sellers.
Some of the steps involved in the purchasing of your property are:
- reviewing the contract before execution and making recommended changes/explaining the contract itself and your main rights and risks under the contract
- calculation of the important dates such as finance, building and pest and settlement
- ordering searches for your property from various government authorities and body corporates
- liaising with your brokers, financiers, agents and seller’s solicitors
- arranging settlement figures and preparing the relevant monies to be paid to the sellers at settlement
- preparing your stamp duty lodgement and attending to the payment of stamp duty on your behalf
- preparing documents for the transfer of title into the buyer’s name and ensuring the seller’s mortgage is released from title at settlement
- arranging for settlement preparations whether online via PEXA or in person
The steps for acting for the seller are quite similar also, some of those are:
- reviewing the contract to ensure that it has been correctly completed and any notification of any remaining encumbrances are noted on title and other required notices to be given by a seller to a buyer
- calculation of important dates the buyer or you have to comply with
- liaising with your banker (if any), your agent and the buyer’s solicitor
- ensuring the correct documentation is prepared for the transfer of the property from you to the buyer and arranging for your execution of these documents as required
- preparation of settlement figures and checking the agent is paid its commission, your bills are paid to date and if not, arranging payment of the rates, water and body corporate levies at settlement
- preparing settlement on your behalf either via PEXA or in person
Why is conveyancing and your conveyancer important?
As the conveyancing process in Queensland is complex due to so around twenty pieces of legislation, contract conditions, case law and practice protocols to be followed, it is very important you obtain a lawyer or a conveyancer to look after your sale or your purchase.
Conveyancing is a very strict time-based process whereby conditions such as finance, building and pest, due diligence and settlement itself must be completed by a specific date and time (usually 4pm or 5pm).
If these timeframes are missed, you could lose your contract (whether you are a buyer or a seller) and you may also lose your deposit as a buyer.
Some of the main things we look out for and assist you in tracking and actioning when acting on behalf of a buyer are:
- special conditions such as due diligence, development approvals, finance conditions, cooling off periods and building and pest conditions being satisfied or terminated on time;
- the deposits, transfer duty and registration fees being paid on time;
- settlement being effected on time, by also liaising with your mortgagee (if any) to ensure that they meet the settlement timeframe also;
- calculating the settlement figures and your share of outgoings and ensuring that the various outgoings are paid by the seller at settlement;
- notify you of the various easements, covenants and caveats that show on the title which encumber your property;
- review your contracts and recommend changes be made to it (if any are required by you).
When attending to the conveyancing for a seller, we look out for:
- special conditions the buyer has included which may impact your contract and your rights;
- notify you of the due dates you must comply with (such as having a pool safety certificate provided by or settlement being effected);
- liaising with your mortgagee and other parties to ensure a smooth settlement;
- ensuring the agent has drafted the contract correctly and has disclosed all encumbrances or other notices under the contract so that you are not in breach for not disclosing them (such as easements);
- acting for you in your development/subdivision by preparing contracts and attending to the subdivision and conveyancing process.
When do you need a conveyancer?
A conveyancer is required to assist you when you purchase, sell or transfer property to or from another person.
Conveyancers also assist with commercial conveyancing, which means properties used for commercial reasons such as business and trades. We can also assist you with buying or setting up a business with more information on our commercial conveyancing page.
What are the added benefits of using FC Lawyers as my conveyancer?
The benefit of having FC Lawyers acting for you as your conveyancer or lawyer is that we have assisted thousands of clients over the last 20 buy or sell property.
We have solicitors who work closely with the property team and review the contracts before execution so that you understand your rights under the contract prior to entering into an agreement to buy or sell.
Our staff are very friendly and are always available by phone or email to discuss your matter and answer any queries you have. We can also meet via Microsoft Teams, Skype, Zoom or any other video software to assist you through the conveyancing process.
With a wide range of long term clients, from first home buyers to developers, we have experience with guiding different persons along the way.
Our offices are located in Brisbane and the Sunshine Coast, with staff available in both offices at all times and we are able to assist with any conveyancing for Queensland properties, including houses, units, land and off the plan developments.
Frequently Asked Questions (FAQs)
Can you do your own conveyancing?
If you wish to act for yourself in conveyancing, it can be done, but the process is very difficult and it may take you longer to meet the deadlines due to not having access to the systems we have access too. This is especially the case for buyers.
An example is the stamping of the transfer documents, which would require you to post to the Office of State Revenue and receive back prior to the settlement date, whereas we can do inhouse stamp duty processing within minutes.
Sometimes, because of the delays caused by potential errors/mail or not understanding the process and timeframes for self-acting buyers or sellers, you may be in breach of contract and end up spending more money than you would have if you had hired a conveyance or a solicitor in the first place.
You may sometimes hire agents to do parts of the conveyancing process for you, such as stamping of documents or settling via PEXA or in paper, however the costs may add up to almost that of us having had done the conveyancing for you in the first place!
It is a very high risk area of law, and it is strongly recommended you seek legal advice in all aspects of your sale or purchase.
Why do searches cost extra?
Searches are important for a buyer (and seller) because information that may not be known to anyone, will come up in the searches.
Although they can be quite costly at times, mostly for buyers, they can be crucial in helping you decide whether you wish to go ahead with the purchase or not.
The reason searches are not part of our professional costs is because we order them from various local or national government authorities or body corporates.
I’ve already signed a contract – can I still get legal advice?
Yes, you should!
For buyers, most residential purchase contracts have a cooling off period of 5 working days from when the fully signed contract is issued to the buyer or its legal representative.
During this timeframe (or even potentially during the course of another condition such as due diligence or finance), you may be able to make amendments to the contract before you go unconditional or settle. The more conditions are in a contract, the more leverage a buyer has to be able to make any required amendments to a contract.
For a seller, it is a bit harder to make any amendments to a contract once it is signed, because the only time you would be able to have any sort of leverage to request an amendment, would be if a buyer requires an extension of time for a condition to comply with its obligations under a contract, or if a buyer is in default.It is important that you have your contract reviewed, whether you are a buyer or a seller, regardless of it being signed or not because there may be some crucial changes needed to be made or things to look out for, which should be picked up before the contract becomes conditional or before settlement is effected.
What is my obligation towards the Buyer before the Contract is signed?
There are many things a seller is required to disclose to the Buyer before the contract is signed, or even presented, to the buyer. If you fail to make proper disclosure in the Contract, the Buyer may have rights to terminate and claim compensation. Some of the things which must be disclosed are:
- unregistered or registered easements and encumbrances and other government rights or interests that may affect the Property
- notices to do work issued by the any government authority;
- building covenants;
- encroachments by fences or trees;
- road widening or notice of a proposed road widening or resumptions;
- any unsatisfied judgments, orders or writs affecting the Property, the common property or body corporate assets or claims which could lead to these;
- outstanding or ongoing conditions of development approvals.
Who is entitled to the Deposit if the Contract is terminated by the Buyer?
If the contract is terminated by the Buyer under a Buyer’s condition (such as finance, building and pest or due diligence) or because the Seller is in breach of Contract, then the Buyer is entitled to the Deposit.
Conditions such as finance, building and pest or due diligence (plus many others) are purposely included in the contract to allow a Buyer to try and satisfy or meet the requirements to be able to continue with the contract. If they cannot do so by the due date, then the buyer or the seller are generally able to terminate the contract, with the deposit usually being refunded to the buyer.
It is crucial your contract is reviewed first, to ensure the wording of the conditions clearly specifies that the deposit will be refunded to the buyer in full.
If the contract is terminated by the Seller because the Buyer is in breach of contract for not settling on time, then the Seller is entitled to the deposit.
Do I have to pay the council and water rates when I have sold the Property?
Yes you do. Generally under a contract, the seller is entitled to pay the outgoings such as rates, water, body corporate levies, land tax and receive rent, up until the settlement date. The buyer is then responsible for the outgoings from the settlement date until the end of that rating period the settlement date falls under for the outgoings.
Any outstanding amount of outgoings is paid in full by the seller at settlement, as the proportion of the buyer’s share is received by way of adjustment at settlement.
What is the cooling-off period?
Generally, when you sign a Contract of Sale in Queensland you receive a five-day ‘cooling off’ period, in which time you can pull out of the Contract without having to provide a reason. It could be that you’ve gotten cold feet or changed your mind.
The cooling off period starts on the day the Buyer receives from the seller, seller’s lawyer or the seller’s agent a copy of the Contract signed by both parties or, if that day is not a business day, on the next business day.
If you as the purchaser elect to terminate the Contract and pull out though, the seller is entitled to keep 0.25% of the purchase price out of the deposit you have made.
A buyer is able to also shorten or waive the benefit of the cooling off period, by giving written notice to the seller.
What is transfer duty?
Transfer duty (or stamp duty) is a tax paid to the State Government upon the transferring of ownership in property. It is payable by the buyer of a property and the amount to be paid is determined by the purchase price of the property. Depending on whether you are buying a house to live in, or as an investment the amount of transfer duty payable will also differ. There are also currently concessions available to first homebuyers and homebuyers who will use the property as their principal place of residence in Queensland.
I need a loan to purchase a property – what should I do?
Prior to entering into a contract, you should speak with a mortgage broker or a banker to see your ability to obtain finance and the timeframe required for you to obtain satisfactory finance approval.
If you have a finance condition in the contract, it means that if you don’t obtain approval by that due date, you can terminate the contract and have the deposit refunded to you.
If you don’t have a finance condition in the contract, then it means that you cannot terminate the contract if you don’t obtain approval, so the seller would be able to forfeit the deposit and sue you if you don’t settle on time.
What is Foreign resident capital gains withholding payments?
If a Foreign Capital Gains withholding law applies, which is for contracts where the purchase price is higher than $750,000.00, the buyer has to withhold 12.5% of the purchase price at settlement and pay it to the Australian Taxation Office.
The way to avoid this payment requirement is by the seller producing a valid clearance certificate issued by the ATO or a notice from the ATO varying the CGT withholding amount to nil.
A seller should apply for the ATO Clearance Certificate as soon as possible, even before the contract is signed, as it is usually valid for twelve (12) months, to avoid any delays in its arrival.
What are adjustments?
When purchasing or selling property, pro-rata adjustments are made for the buyer and seller’s share of body corporate levies, rates, water, land tax and insurance.
In a standard Queensland REIQ contract, when any of these levies have issues, the buyer pays for their share of these from the settlement date up until the end of the rating period by way of adjustment at settlement, so that the seller will receive their reimbursement from the date the levies were issued, until the settlement date. The Seller will then pay these in full at settlement.
If the levies have not yet issued, an adjustment is made from the seller, providing their share to the buyer so that when they eventually issue, the buyer is able to pay the levies in full.
Land tax adjustments are usually made only on off the plan contracts or for commercial contracts. They are not normally adjusted for existing residential property.
What happens if I don’t like the property after the pre-settlement inspection?
Under the contract, you must accept the property as it is, and where is at the time you do your initial inspection of the property and also once you conduct a building and pest inspection. This is why it is very important to inspect the property when you enter into the contract, as you will be unable to tell the difference as to the state of the property once it’s time to conduct a pre-settlement inspection.
If the property is majorly damaged before settlement, then you be able to either delay the settlement date, withhold part of the seller’s settlement funds or in extreme cases where the property is unhabitable, terminate the contract and receive your deposit back. This varies on a case to case basis, so it is important to obtain legal advice prior to signing the contract and conduct your inspection of the property before entering into a contract and before settlement occurs.
When properties are purchased through auction, you usually are unable to delay settlement at all as the contract will most likely have special conditions where the property has to be accepted ‘as is’ and ‘where is’ without any leg for the buyer to stand on to claim compensation or terminate the contract.
What are rate adjustments?
As you may be aware aware, rates notices are issued by all local councils to property owners and are payable by certain dates.
Most rates are levies quarterly, but for some councils they can be levied every six months or even annually.
Under most contracts, there is a standard condition where the seller has to pay the outstanding rates in full for that particular rating period in which your settlement falls under, but then you reimburse the seller with your share from the settlement date up until the date the rating period ends.
An example is if a rating period commences on 1 January and ends on 31 March, with settlement on 15 February, you pay your share of rates to the seller from 16 January until 31 March, while the seller pays the whole rates in full from 1 January until 31 March.
What happens if I don’t like the property after the pre-settlement inspection?
Unfortunately, generally you cannot terminate a contract just because you don’t like the property after you’ve done the pre-settlement inspection, unless you have a special condition which states otherwise.
When you enter into a contract to purchase a property, you should conduct an inspection before you sign the contract for two main reasons:
- to ensure you actually like the property you are buying; and
- to check the state of everything in the property and make sure there are no new damages/appliances to the property once you do another pre-settlement inspection.
If you cannot inspect the property before you enter into a contract, then we would recommend you have a condition whereby you must inspect the property and ensure you are happy with its appearance within a certain timeframe prior to settlement so that if you are not satisfied, you may terminate the contract and have your deposit refunded.
If anything in the property is not in the same state as it was before you signed the contract, you may be able to ask for compensation, but if the issues are small then sometimes you don’t have much of a chance to be able to seek compensation and definitely not terminate the contract.
The only time you are usually able to terminate the contract when you conduct a pre-settlement inspection is when the property is damaged to the point where you are unable to live there anymore.
Can I purchase a property in Queensland if I live interstate or overseas?
You can definitely purchase a property in Queensland while living interstate or overseas. We have assisted clients all over the world thanks to majority of work being able to be done online and via email and telephone.
The process for the execution of loan documents at the moment is more difficult for persons living overseas, as you will need to be signing in the presence of a notary public or an officer of the Australian Consulate, however we can make this process easier for you by providing the relevant documents and instructions in advance before you attend your appointment.
Do we charge if the contract falls over?
We do charge if a contract does not proceed, but our fees will be based on that work we have done to date on that matter. If the work done is less than what our total quoted cost are, we will only charge for that work to date. This is because we have already put a lot of work into the matter for you, despite the unfortunate even of the termination, we have already assisted you with all the matters to date.
If a contract is completely unconditional, which means that there are no conditions whereby a buyer has to obtain satisfactory finance, building and pest reports, due diligence enquiries or anything else that would allow them to terminate based on certain due diligence they wish to make before proceeding with the purchase of a property, then it usually means a buyer cannot terminate a contract unless a seller breaches one of the standard clauses of the contract.
This can benefit the seller, as it does not allow the buyer to easily get out of the contract, however for a buyer it is very important all of these enquiries and due diligence are sorted and set in stone before entering into the contract to try and avoid any surprises down the track.
A contract usually has a cooling off period, so a buyer can have five (5) working days to terminate a contract if they decide to change their mind down the track, however if a property is purchased at auction, then there is usually no cooling off period either and there are conditions where a buyer must accept the property as it is and where it is.
Can you review a property contract before I have signed it?
Yes. We strongly recommend that all contracts are reviewed by us before you sign, whether they are sale or purchase contracts.
The reason for this is because once contracts are signed and depending on what stage we receive the fully signed contract, no changes may be able to be made to them.
The changes would be things that would benefit you more or prevent the other parties from potentially terminating the contract due to it not being prepared correctly in the first place.
We check that all required things are disclosed and that you are aware of your rights, obligations and other potential rights you may be entitled to.
Can you assist in buying or selling a property between family members?
We can assist you in buying and selling between family members or simply transferring interest held within the same property. These are sometimes required to by done by way of contract, or even by just transfer depending on the nature of the matter and how the bank or parties requires them to be carried out.
This also includes family law related transfers required by court orders or binding financial agreements.
Who notifies the authorities that I have purchased or sold a property?
When registration occurs at settlement, there is a Form 24 which is lodged with the Department of Natural Resources, Mines and Energy and it shows the contact details of the new owner. It can show the email address, residential address, postal address and number of the new owners. This form is for the various government departments such as council, water authority and other government entities to obtain the new owner details.
Can the purchaser and the seller use the same conveyancer?
If both the parties agree that the same law firm can act on behalf of both parties and provided there are no conflicts of interest, this is not an issue. Usually, we would have an agreement executed by each party confirming that should a conflict of interest arise, we will cease to act for one, or both, parties.
Building and pest inspection – do you need one?
If you are buying an existing property, then we strongly recommend a buyer have a building and pest inspection conducted by a certified building and pest inspector. You won’t know what issues there are with the property, such as structural damage, terminate damage or anything else unless you have inspections conducted.
Usually, you would do this during the building and pest inspection condition period under the contract, but if a seller doesn’t allow such condition, you would need to take the risk of proceeding regardless.
We would recommend you do not rely on the inspection done by a seller in advance in case new issues are picked up during your own inspection that you conduct.
Prior inspection – do you need one?
We strongly recommend you conduct two inspections:
- one before you enter into a contract to purchase; and
- one before you settle to ensure the property is in the same state as when you signed the contract and if any works were agreed upon to be completed prior to settlement, to check that those works have been done.
If you don’t conduct a pre-settlement inspection or an inspection before signing the contract, you won’t really have any grounds to not settle if there are any issues with the property, unless it is unhabitable of course.
Can you collect the keys to the property at settlement?
Keys are usually collected once settlement has been effected as under the contract, the seller gives the buyer the keys to the property in exchange for the settlement monies.
Unless there is a previous agreement between all parties for the buyer to move into the property or take possession before settlement, then keys are always collected after settlement or at settlement.
Usually settlement is done online, so you would most likely wait with the real estate agent (or the seller if there is no real estate agent involved), until both parties heat that settlement is effected and the handover of the keys and remotes can then be completed.