Introduction to buying

INTRODUCTION TO SELLING AND BUYING RESIDENTIAL PROPERTY

A consumer education publication by the Australian Institute of Conveyancers New South Wales Division.

INTRODUCTION

This publication is intended to be for information purposes only and does not set out the complete details of a conveyancing transaction. The information in this booklet is not intended to be legal advice and should not be taken as such. Readers should use the information to make themselves more informed of what is happening and what is required of them in a typical residential sale and or purchase of property.

Conveyancing is the transfer of ownership of property from one person to another.

The Conveyancers Licensing Act 1995 states that “conveyancing work is legal work carried out in connection with any transaction that creates, varies, transfers or extinguishes a legal or equitable interest in any real or personal property”

There are many legal requirements in a conveyancing transaction and there are many pitfalls for the unwary. This is why it is recommended that you take advantage of the expertise and knowledge, of a qualified conveyancer to handle your sale and or purchase.

For most people the sale or purchase of real estate is the most expensive transaction they will make in their lives. Some people may buy and sell property many times and for others in may be a once in a lifetime transaction.

The laws relating to conveyancing are changing all the time and this is one of the reasons a qualified up to date professional should be chosen to handle your transaction.

Conveyancers are licensed by the Department of Fair Trading and must have completed a two-year course specifically written for conveyancers and approved by the Department of Fair Trading. Apart from this academic qualification they must have had, at a minimum, two years of practical training working in a conveyancing business before they can be issued with an unrestricted licence. This requirement is so that a conveyancer can work in just one area of law, conveyancing.

To obtain a licence, conveyancers must have in place a current policy of Professional Indemnity insurance, this is to protect you, the consumer, against any mistake or error the conveyancer may make in your transaction. You will be completely compensated if anything goes wrong with your transaction when you use a conveyancer. This, in itself, is a re-assurance that you are dealing with a professional in their field of law.

To be assured that a qualified conveyancer is assisting you, you should always insist that you deal only with a member of the Australian Institute of Conveyancers New South Wales Division.

Members of the Australian Institute of Conveyancers NSW Division are known as a ‘CPC’ (Certified Practising Conveyancer). To be a CPC the conveyancer must hold a current licence and comply with the strict requirements of membership. They will be required to have completed a course of continuing education each and every year they hold a licence and must participate in the Institute’s Risk Management Program.

Always use a CPC and you will know that you are dealing with a qualified, up to date, conveyancer who has the full backing and support of the Australian Institute of Conveyancers NSW Division.

Peace of mind when you are transacting one of the most important transactions of your life is a comforting thing to have. Always use a CPC.

The title to land is recorded at the office of Land and Property Information. There are several different types of title to land in New South Wales and the main types are described below;Torrens Title is the most common type of title to land and is administered by the Real Property Act. Once registered as the proprietor, or owner, of the property you have a title guaranteed by the NSW Government. Ownership is evidenced by a certificate of title, however, it must be realised that the certificate of title issued to you following your purchase of the land is only a record of what is registered on the folio kept by Land and Property Information. The record at Land and Property Information is the true record of ownership. It is possible for dealings with the land to be registered on the folio that are not shown on the certificate of title issued to you.

If you have a mortgage your lender or mortgagee holds the certificate of title.

Strata Title is a form of Torrens Title and relates to properties that form part of a strata plan. These properties are usually units, villas and townhouses. When you own a strata property you actually own the airspace within the building. The building and common areas are owned by the owners corporation of which all lot owners are part. It is the owners corporation that manages the plan and each owner contributes levies to cover the cost of maintaining the property and surrounds.

Community Title is the name given to land contained in a community plan. This type of subdivision of land enables the owners within the plan to share or have the use of community land set aside for parks, playgrounds, swimming pools, or whatever community facilities are available within the plan. This type of development may incorporate a block of units? freestanding houses, shops and other development such as a golf course etc. It is a very flexible way of developing land and small communities. Each owner contributes levies for the cost of maintaining the communal property.

Old System Title is the name given to the ownership of land bqfore the introduction of the Torrens Title. There are still some Old System Title properties in New South Wales although as they are dealt with they are generally converted to Torrens Title. Old system Title is the dearest title to deal with, as it is a complicated system of recording ownership. Title consists of a chain of documents that evidence each transaction that has taken place with that property. Each document has to be retained as evidence of that transaction so that a search of those documents can evidence an unbroken chain of title for a period of 30 years. This could mean that there are many documents to check and each document must be correct and convey the proper title each time. Any error in any document can mean a break in the title. This is a cumbersome and expensive way to transfer title of property and thankfully as time goes by there is less and less properties under this title.

Qualified title is the name given to the title to property that has been converted from Old Systems Title to Torrens Title. This is a form of Torrens Title but is issued with a caution noted on it that the title to the property prior to the conversion to Torrens Title is not guaranteed by the Government. Land and Property Information will have checked survey and boundary matters but not the Old system Title.

When dealing with qualified title your CPC will check the title prior to the conversion as with Old Systems Title.

The qualification can be lifted after one of two events occurs;

> A period of 12 years has passed since the conversion

> Six years has passed since a transaction has taken place for a consideration, (the transaction was for a sale or mortgage, not a gift or inheritance)

Limited Title is the name given to the title of property that has not had survey or boundary matters checked by Land and Property Information. When Old System Title is converted to Torrens Title there may not be a plan registered showing the boundaries having been surveyed. The description of the boundaries is by a metes and bounds description only. This limitation can remain forever and does not affect any dealing with the property or if the owner prefers he can have a plan of survey lodged with Land & Property Information and have the limitation removed.

Title search is done at the Land & Property Information. The search will consist of;

> a copy of the computer folio which details the names of the owners, any mortgages, any covenants, caveats etc.

> a copy of the plan, whether it be a deposited plan, strata plan or community plan which will show if any restrictions on user have been registered, any easements that effect the property and general survey details such as measurements of the property.

> A copy of all dealings, covenants, restrictions, easements etc.