Conveyancing, like most established processes, has many commonly used terms that are sometimes confusing to clients. Below is a conveyancing glossary containing a comprehensive list of conveyancing terms and explanations of what they mean and examples to help illustrate further.
See Real Estate Agent.
The majority of property owners these days do not have a paper certificate of title for their property. Such a document is no longer necessary in Queensland because of the centralised land registry system which records all property ownership details on a central database.
If a paper certificate of title has been issued for a property, then it will need to be provided to the Titles Registry when lodging a document for registration in relation to the property. For this reason, some people, especially those with unencumbered properties (e.g. no mortgage), prefer to have a certificate of title issued as a protection against unauthorised dealings with their property.
It is common for a paper certificate of title to be kept in a lawyer's safe custody as a means of safekeeping.
A current title search of a property will show whether a paper certificate of title has been issued.
If the paper certificate of title has been lost or destroyed then it is an arduous process to replace or dispense with the requirement for its production. For this reason, many people consider a paper certificate of title to be an inconvenience.
This is the term given to developments containing multiple dwellings. Commonly a body corporate will administer the CTS. This can be a house in a gated estate, a townhouse, or an apartment in a high-rise building. The title for a property within a CTS 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, and the applicability of rules governing the use of the property through the by-laws.
A contract whose settlement is conditional upon certain events occurring. The most usual conditions are the finance condition and the building and pest inspection condition, both of which are in favour of the buyer. This contrasts with an unconditional contract.
In conveyancing, the contract is the legal document that sets out the terms and conditions of the sale of the property. It assigns rights and obligations to the parties and apportions risk between them.
While there is no one standard contract, in Queensland, the majority of conveyances use a standard form contract prepared by the Real Estate Institute of Queensland in consultation with the Queensland Law Society. There are other 'standard form' contracts that are sometimes used and in some cases, such as off the plan sales, a specific contract drafted by the seller's lawyer will be used.
Conveyancing is the legal process that transfers the title of a property between the seller and the buyer. It starts when the contract is signed (or in some cases prior to signing the contract) and continues through until settlement when the title of the property is transferred in exchange for the purchase price.
A cooling-off period of 5 days applies to contract for the sale of residential property in Queensland. It will start the day the buyer or the buyer's lawyer receives a copy of the contract that has been signed by both parties. The cooling-off period ends at 5pm on the final day of the cooling-off period.
When a contract is received on a weekend or public holiday, the cooling-off period begins on the next business day.
A cooling-off period does not apply to a contract:
- for a sale by auction
- for a follow-up sale after an unsuccessful action (before 5pm on the second business day) in which the buyer was a registered bidder
- that is an option contract or a sale contract formed as the result of an option contract
- if the buyer is a publicly listed corporation (or its subsidiary)
- the State or a statutory body
- if 3 or more lots are being bought at the same time (whether or not they are in the same contract)
If the buyer chooses to terminate the contract during the cooling-off period, it must given written notice before the period ends. A penalty of 0.25% of the purchase price may be deducted from any deposit held and the balance deposit must be refunded to the buyer within 14 days.
If the parties agree, it is possible to waive or shorten the cooling-off period.
The deposit is an amount agreed and documented in the contract that the buyer must pay prior to settlement of the conveyance. In most cases, the deposit is between 5% and 10% of the purchase price and is payable upon the buyer signing the contract.
It is quite common for the deposit to be split into two parts. The first, smaller amount, payable upon signing the contract, and the second larger amount, payable upon the contract becoming unconditional.
If the conveyance settles or the buyer defaults, the deposit will usually be paid to the seller. If the contract is terminated under one of the conditions or the seller defaults, then the deposit is usually refunded to the buyer.
The deposit is usually held in a trust account. In most cases this is the real estate agent's trust account but it can also be a lawyer's trust account.
Any interest earned on the deposit will be dealt with in the terms of the contract. In most cases, the interest goes to the party who receives the deposit at the conclusion of the conveyance.
In Queensland, parties should be careful when considering a deposit that is greater than 10% of the purchase price as it may trigger unintended consequences and result in the contract being classified as an instalment contract. Legal advice should be obtained before signing a contract with a greater than 10% deposit.
If the seller of a property has a mortgage on it, arrangements must be made by the seller for the mortgage to be removed from the title. This is done by the seller lodging a discharge of mortgage request with their mortgagee. Adequate time should be given for the mortgagee to process the discharge request and prepare for settlement.
In our experience, this is one of the most common causes of settlement delay by the seller.
A right of use that is listed on a property's title. An easement can benefit a property in cases where the owner of that property has some right of use over another property, or it can burden a property in cases where other people can exercise a right of use over that property.
Examples of common easements includes shared paths and driveways, and infrastructure such as electricity lines and water pipes. In some cases, some infrastructure does not have an easement on the title and therefore inspection of government authorities' plans may be necessary to identify the presence of such items.
A burden or charge over a property that is usually listed on the title. Common examples include a mortgage, easement or lease.
Most conveyancing contracts will state that the buyer will take the property free from all encumbrances.