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Common conveyancing terms

Buying a property – particularly your first home – can be quite confusing, and it helps to be fully informed about some terminology you are unlikely to be familiar with. The terms and phrases outlined below are some of the more common ones that you will come across in the conveyancing process.

Please let us know if there’s something you don’t understand, as we are always happy to answer any of your questions!

Adjustments: This refers to the method used to calculate how property outgoings (e.g. shire rates) will be divided between the buyer and the seller. This process helps ensure that both parties are only responsible for paying these for the time that they are in possession of the property.

Agent (also known as Land Agent or Real Estate Agent): Acts on behalf of sellers to arrange the sale of properties, including houses, buildings, factories, shops, farms, vacant land and businesses.

Boundary: Based on a plan of survey, or alternatively a plan or sketch compiled from a survey, which defines the boundaries of the property as at the date it was prepared.

Certificate of title: A certificate of title is a legal document that sets forth the particulars of the title and the owners (or registered proprietors) of a property. It provides proof of ownership, and may also include historical information about encumbrances on the property in question, making it an important part of the documentation when preparing a property for sale.

Common property: The areas of a registered strata plan that are for shared use and access by all owners (e.g. hallways, green spaces and driveways in unit blocks).

Community Titles Scheme: The term given to developments containing multiple dwellings. This can be a house in a gated estate, a townhouse, or an apartment in a high rise. The Title for a property within a Community Titles Scheme has the same rights as the Title for a property on an individual block of land, except for the inclusion of common areas (such as a pool, gym, or shared car park).

Contract of Sale (also known as an Offer and Acceptance): This is a formal, legally-binding agreement between the buyer and the seller for the sale of property, and provides for all of the agreed aspects, property details, rights and obligations between the two parties. It sets out the specific terms from which the seller will sell the property to the buyer, and in most cases this is first drawn up by the seller’s real estate agent.

Conveyancer: A conveyancer is a professional who has the qualifications necessary to represent another party during the transfer of property, and can assist you with the conveyancing process. Depending on which state or territory you are in, the duties and responsibilities of a conveyancer can be quite different. Some conveyancers can provide holistic property advice, while others will work purely with documentation and legal matters.

Conveyancing: In simple terms, this is the formal legal process of transferring title on a property from one party to another – in most cases, this will include a buyer and a seller. Depending on the type of property and the state in which it takes place, this can involve a variety of different processes.

Cooling-off period: Depending on the conditions placed upon the sale of a property, there may be a cooling-off period allowed for the buyer. This is a set number of days during which the buyer can back out of the purchase process. The length of this period will depend on the state or territory you are in. However, there is often a penalty for doing so, and some sale types (such as an auction) may not have such a period.

Deposit: The buyer must put down a certain amount of money in order to secure the property purchase. The standard deposit is up to 10% of the purchase price (however, this amount can vary) and it can be paid in two parts; as an initial deposit and a balance deposit.

Disbursements: These are additional costs that may be charged by your conveyancer that are incurred as part of the conveyancing process. These are often paid to third parties on your behalf as part of the conveyancing process, such as fees to Councils and Government Departments. They can include title searches, certificate fees, registering the title transfer, registering the mortgage or even something as simple as photocopying. Non-legal fees may include survey reports, building inspections, valuation fees and so on.

Discharge of Mortgage: When you are selling a property that has a mortgage on it, you must arrange with your lender for the discharge of this mortgage. This is done by contacting your lender, who will arrange for a Release of Mortgage document to be prepared and made available to the buyer at settlement, in return for the funds required to pay out and discharge your mortgage.

Easement: An easement is a covenant that burdens or benefits a parcel land. Easements can affect what you can or cannot do with the land, and are listed on a property's title. For example, someone other than the property owner may have a right to use the property for a specific purpose, such as for shared paths and driveways.

Encumbrance: A formal burden or charge over a property listed on the Title; such as a mortgage, easement, or lease.

Exchange of contracts: When purchasing a property, the contract for sale becomes active once you exchange contracts with the seller. Exchange involves swapping your signed version of the contract with the seller’s signed identical version and indicates the commencement of the agreement to buy/sell the property (which ends at completion or settlement of the agreement). The deposit is required to be paid before exchange of contracts can take place.

Finance Due Date: The date upon which the buyer is required to have obtained finance approval for the property. If you are taking out a mortgage for the purchase, then this will be a condition of the Contract of Sale.

First Home Owners Grant: At times the State Government offers grants to first home buyers to assist them in purchasing a property. The grant amount and eligibility vary and your conveyancer will provide the most up-to-date information to you.

Fittings: Items such as backyard ornaments, lighting or wardrobes which can be removed without damaging the property.

Fixtures: Items such as basins, toilets, baths, built-in wardrobes and kitchen stoves that are attached to the property, and ownership moves from the seller to the buyer with the property.

Joint tenants: Joint tenants means that each tenant (for example a husband and wife) own the whole of the property together or jointly. This involves a right of survivorship, that is, the interest of a deceased joint tenant passes to the surviving joint tenant, so that in the example of the husband and wife, the surviving spouse then owns the whole of the property on their own.

Mortgage: A mortgage is another name for a loan, and is used to define a loan for the purchase of a property. The mortgage will be registered on the Title to the property, and shows the interest of the body that has lent money to the owner of the property for its purchase.

Office of State Revenue: The Western Australian government department that assesses stamp or transfer duty, and accepts payment of it as part of the transaction in the purchase of property.

Owners corporation: The owners corporation is the body made up of all the owners in a strata scheme.

PEXA: PEXA (which stands for Property Exchange Australia) is a software system currently being implemented across Australia that will allow for property transactions to be conducted wholly online.

Requisitions on title: A set of questions about a property the buyer asks the seller after the contract has been signed, usually with the help of a solicitor.

Requisitions and Enquiries: The purchaser usually has questions which can be posed to the seller in relation to the property. These are included under the category of requisitions and enquiries, with many sale contracts including a clause which excludes the purchasers from this right.

Settlement: Settlement occurs near the conclusion of the conveyancing process, when the remaining balance of the purchase price is paid to the seller and the documents required to legally transfer of ownership are registered (or sent for registration). This can be performed physically, but in WA is more commonly done electronically via the PEXA system.

Seller: The person selling the property. Also referred to as a Vendor.

Stamp duty (also known as Transfer Duty): All Territories and States in Australia have some type of stamp duty levy, with few exceptions. The costs vary depending on value of the transfer and state that the property is located in, and is paid by the buyer of the land when the property is transferred into his or her name.

Strata title: Each unit in a block or multi-unit complex is individually owned by the resident.

Tenants in common: A form of joint ownership of a property when each person owns a share of the property, equally or unequally. It is different to joint tenants as each tenant owns are particular portion of the property (e.g. 40%, 50%, 60% etc) and may be able to transfer their portion only or give to a particular person through their Will. The right of survivorship does not apply to tenants in common as it does for joint tenants.

Torrens title: A system of title by registration adopted by each state/territory in Australia.

Transfer: This legal document shows the property’s title particulars for the property that is going to be transferred between two parties. It will also show the property’s current registered owner and any encumbrances.

Unencumbered: Used to describe a title to a property that is free of any encumbrances, such as a mortgage, caveat or writ.

Vacant Possession: The purchasing of a property that will be vacant at settlement, with no tenant or any other person living in it.

Valuation: An estimate of the value of a property by a registered valuer.

Vendor: The person selling the property. Also referred to as a Seller.

Zoning: The permissible uses of an area of land as stipulated by the Local Council.
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