Common Myths About the Conveyancing Process
As with all legal processes, conveyancing (the legal process of transferring property ownership) comes with many common misconceptions that can result in significant time and financial costs. You may think that you have it all under control, but the process is much more complicated than you think! Here are several preconceived notions I commonly see from new buyers and sellers, and what you can do instead.
Myth #1: “I Do Not Need a Lawyer, I Can do It Myself”
While individuals may be tempted to handle property transactions without legal representation to reduce costs, Australian property law requires specific expertise and professional qualifications. Even seemingly straightforward property matters involve complex legal requirements and potential risks.
Each matter is unique; a couple of hours of internet browsing will not equip you with the necessary skills to apply all of that knowledge to your matter.
Additionally, certain conveyancing transactions must legally be conducted through PEXA (Property Exchange Australia), which requires appropriate licensing and professional accreditation in accordance with state/territory regulations.
Myth #2: All Property Titles Are The Same
In Australia, the most common property title is the Torrens Title or ‘Freehold’, where the owner has complete ownership of both the property and the land. However, there are others including a Strata Title, where the seller owns the inside of the property but not the outside; a Leasehold Title where the property is owned by the government but leased out to another party for a certain amount of time; and more. What title your property has will differ between state and territories. Never assume you have a Torrens Title because it is the most common, always make sure to double-check.
Myth #3: All the Hard Work is Done Before Exchange
False. There is still much to be done in between exchanging contracts and settlement. Firstly, you have the cooling-off period: a period in which the buyer can withdraw from the contract, though they may forfeit 0.25% of the purchase price to the seller.
You will have a pre-settlement inspection, where the buyer conducts an inspection of the property to assess that everything is as the contract stated before moving in. Additionally, mortgage payments need to be finalised, titles need to be transferred, contracts can still be negotiated and building and pest inspections will be underway.
Myth #4: Conveyancing Fees are the Same for Each Matter
Upon finding a property lawyer, your first instinct will be to ask for the exact cost of their services. Unfortunately, a fixed fee will likely not be able to be provided. Fees will vary wildly between matters.
Due to additional considerations like land use and local regulations, rural and urban property matters are billed differently. Unexpected legal complexities will also up the price. As such, one may be tempted to find the cheapest possible property lawyer. This is not always the best idea, however, because lawyers with specialised knowledge of local laws and requirements will be pricier but also greatly reduce your risk of anything going wrong.
Myth #5: One Conveyancer Can Represent Both Buyer and Seller
This creates a conflict of interest. Each party has entirely different needs; the buyer’s gain might be the seller’s loss and vice versa. Full representation of one party requires unbiased attention towards their goals. While it may technically be possible to have the same lawyer for both parties in very limited circumstances, with informed consent and written waivers, individual advocacy is diminished when doing so. Having the same lawyer also presents privacy concerns, as safeguarding financial and negotiation details is compromised with dual representation.
Myth #6: The Conveyancing Process is Difficult to Understand
It doesn’t have to be! I make sure to simplify the process for my clients, explaining the intimidating legal jargon in a way that you will understand. It is my job to give you the best outcome possible, while also making sure you are fully informed of what is occurring in your matter.
The conveyancing process is already intricate as it is, the last thing that you need is myths clouding your judgement. If you have any questions about conveyancing that may have arisen from reading this post, please do not hesitate to contact me. I am here to help.
DISCLAIMER: This article is for informational purposes only and does not constitute legal advice.