Tuesday, 10 October 2023
What happens when you want to buy a house, a unit, a block of land or other form of real estate? How can your conveyancing lawyer help you?
This information has been prepared as a general guide to help you understand how a conveyancing lawyer can help with a real estate transaction. There are many reasons why a real estate transaction might be different or more complex than the process referred to in this fact sheet and the ACT Law Society does not intend for this fact sheet to be a substitute for legal advice.
What is a conveyance?
When lawyers talk about conveyancing in the ACT, they are typically referring to the process of transferring a legal interest in real estate from one party to another. The process depends on the nature of the real estate and the nature of the interest to be transferred. In most cases, conveyancing involves transferring a Crown leasehold interest in a block of land (including the house built on that land) from one party to another.
What to expect from your conveyancing lawyer
There are numerous things your conveyancing lawyer can help you with. It is common for conveyancing lawyers to offer clients a fixed fee for a settled scope of work. The first thing you should do is discuss what your conveyancing lawyer will do for you and what else you might need to arrange.
A typical scope of work for an ACT property purchase includes the following. However, your lawyer will take your instructions, so you should discuss adding or removing tasks to suit your requirements.
Before exchange of contracts for sale
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Undertaking a 'Verification of Identity' (VOI) to confirm your identity. This will usually involve viewing and taking copies of identification documents such as a passport, drivers licence and Medicare card.
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Confirming your instructions to act for you using a 'Client Authorisation Form' (CAF).
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Providing a costs agreement about the provision of legal services.
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Due diligence: This is the research process to find out relevant information about the property you propose purchasing. ACT conveyancing contracts generally contain most of the relevant information and your lawyer can tell you about additional options if you have specific concerns.
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Advice on contract: One of your lawyer's main tasks is to advise you of your rights and obligations under the proposed contract for sale. Your lawyer will also negotiate the terms of the contract for sale with the seller's lawyer, if required.
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Finance approval: Commonly, your lawyer will recommend that you obtain unconditional loan approval for the finance required for your purchase before entering into the contract for sale.
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Auctions: If you are looking at purchasing a property at auction, your lawyer can review the contract before the auction to advise you on the risks of purchasing at auction, as well as more specific issues relating to the property.
Exchange of contracts for sale (the point in time when the seller and the buyer agree to be bound by the terms of the contract for sale)
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Arranging for you to sign the contract for sale once you are ready to proceed.
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Advising you of the amount of deposit payable at exchange, and who you need to pay it to.
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Arranging the exchange of contracts for sale with seller's lawyer.
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Advising all interested parties once the contracts for sale have been exchanged.
After exchange of contracts for sale: Arranging completion or settlement
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Obtaining general rates, water rates and water consumption (if applicable) searches to ensure any outstanding amounts are paid on settlement.
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Liaising with your lender and the seller's lawyer to arrange an appropriate time for settlement.
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Liaising with the seller's lawyer on the calculation of settlement figures.
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Providing you with the final settlement figures and calculating the funds required for settlement.
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Attending to the settlement and advising you once it has been completed (the transfer of the property will be registered on the ACT Land Titles Register after settlement).
After settlement
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Sending rates cheques/payments to the relevant authorities.
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Providing you with all relevant documents to keep for your records.
Your responsibilities
Your conveyancing lawyer's role is to arrange for the transfer of the relevant property to you, on terms that are acceptable to you. There are many matters which your conveyancing lawyer will not advise you on.
For example, your conveyancing lawyer will generally not advise you on the physical state of the property you are buying. The contract for sale will generally include a building, pest and compliance report. You should satisfy yourself about the content of that report and the state of the property generally by undertaking further investigation if required. This may include, for example:
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obtaining soil classification and geotech reports, and
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contacting ‘Before You Dig’ to check if there are any underground services that may run through the property and which may not be shown in the attachments to the contract for sale.
As noted above, you should discuss what your conveyancing lawyer will do for you and what else you might need to arrange.
What if I am buying a unit?
In the ACT, the title associated with a parcel of land that is subdivided into townhouses or units is generally a ‘unit title’. For unit title property a units plan divides a parcel of land into units and common property. Individual units in a units plan are controlled by the owners corporation, which is comprised of all the current unit owners. The common property is the part of the land and/or buildings in the units plan which does not form part of any unit, but is owned and controlled by the owners corporation (e.g. – lifts, stairways, passages, driveways, carparks and gardens).
The conveyancing process for buying a unit is very similar to any other type of property. However, you may also wish to seek advice from your lawyer on:
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the nature of the unit title subdivision
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the role and functions of the owners corporation
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the obligations and rights of the unit owners, and
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the ongoing costs associated with owning a unit.
Other things to look out for
The following types of property purchase may require additional or specialised advice:
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vacant land or an 'off-the-plan' property
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a company title scheme
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retirement villages
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commercial property, and
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rural property.
What will it cost?
Your conveyancing lawyer will give you an estimate of professional legal fees on request, including anticipated disbursements (out of pocket expenses) and GST payable by you.
In most cases, legal fees for conveyancing are paid at the time of settlement. However, in some cases, such as 'off-the-plan' purchases, your lawyer may require periodic payment of the agreed fee.
There is no fixed scale for conveyancing costs in the ACT. Therefore, you should agree on the amount of the costs, or the basis on which you will be charged, when you instruct your conveyancing lawyer to act for you.
In most cases you will also be liable to pay stamp duty on the purchase of property to the ACT Revenue Office. The ACT Revenue Office will contact you (either through your conveyancing lawyer or directly) after settlement about payment of stamp duty. Your lawyer can advise you of the amount of stamp duty payable (or you may find this out from the ACT Revenue Office website, which has a stamp duty calculator).
Useful links
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Find a lawyer – an ACT Law Society database of lawyers, which can be filtered by practice area, location, language spoken or other attributes.
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ACT Revenue Office – for information on stamp duty, duty concessions/exemptions, general rates, land tax and more.
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Access Canberra Land Titles Office – for ACT Land Titles forms, as well as general information relating to the Land Titles system including electronic conveyancing.