The Fundamentals of Conveyancing Law

Conveyancing Explained

Conveyancing law is an area of legal practice that deals with the legal processes involved in the transfer of property ownership. In the context of real estate transactions, conveyancing covers everything from the initial offer until completion of the sale. The term itself originates from the word "convey" which means to transfer ownership or move ownership from one person to another. While many assume that conveyancing is a straightforward process, there are a multitude of surprising aspects involved.
The key purpose of conveyancing law is to ensure that property transfers are carried out legally. The documents often include contracts, title and mortgage documents, exemptions, as well as land transfers. Conveyancers, who typically oversee the conveyancing process, have an important role in ensuring that all legal requirements are fulfilled.
One example of how a conveyancer ensures compliance throughout the conveyancing law process is the issuing of a title insurance policy. This policy acts as a guarantee on the property’s title for as long as the lender or owner holds on to it. There are several different types of title insurance policies and they are distinct from homeowner’s insurance policies. For the most part, a title insurance policy covers against defects that may not be discovered during the standard title search. If any issues arise that are not covered by a title insurance policy, then a title insurance claim can be filed.
Among other things, the conveyancer will also handle searches. A search simply refers to a request for information. Conveyancers utilize them at several points throughout the process to gather information about the property . In most conveyancing scenarios, there will be a local authority search conducted. This requires the party who submitted the search application to receive the search from the local authorities.
As the processes unfold, a solicitor or conveyancer has the responsibility of drafting the transfer deed. It is their job to make sure that the deed is then submitted to the person from whom the purchase is being made. It is not uncommon for the seller to possess a deed to the property that dates back to a previous purchase. However, it is still the duty of the solicitor or conveyancer to draft a new deed granted to the current buyer. Conveyancers might also be required to draft additional documentation, such as the Land Registry forms. These forms usually contain details about the property, such as its rights, boundaries, covenants, and easements.
Apart from those concerned with real estate, people often associate conveyancing law purely with residential property transactions. However, this branch of law also involves commercial properties. In fact, carrying out commercial conveyancing is oftentimes more complex than its residential counterpart. This is because the financial and legal aspects of a commercial transaction typically involve more substantial risks. This also means that a high level of due diligence is required throughout the entire process. So, while many associate conveyancing with buying and selling property, the role of a conveyancer often involves a much bigger picture.
In essence, conveyancing law plays a major role in ensuring property transfers are smooth and seamless as it covers the entire process from signing a contract to closing a real estate transaction.

Role of the Conveyancing Attorney

An individual who buys or sells a piece of property will most likely need the services of a solicitor to handle tasks needed to achieve completion of the sale. These tasks fall under a branch in law known as conveyancing.
Conveyancing within the field of real estate law is the transferring of ownership of legal title of a property from the seller to the buyer. Certainty of ownership is crucial when a buyer is looking at a piece of property, and that is where a conveyancing lawyer comes in.
A buyer looking to purchase a piece of property can contact a conveyancing lawyer to make arrangements for their assistance throughout all legal dealings. An agent from the legal practice will meet with the client, review the details of the property that is being bought or sold, and then quote a set fee for their service.
Since the lawyer’s fees are a fixed figure, the client isn’t met with any surprise costs when it comes time to receive notification on the completion of the sale. The lawyer will inform the client to arrange payment with their financial institution; once payment is received, the lawyer will release the purchase price and the title of ownership.
The job of a conveyancing lawyer includes ensuring that the client isn’t expected to pay more than they should be, and making use of the relevant laws in real estate sales to protect their clients’ interests.
A lawyer has a duty to the Law Society of their province to take due care and act responsibly in order to ensure that the client pays a fair price for a piece of property.
The government is also known to take legal action against lawyers who fail to provide the correct services to their clients, making it evident how important it is that both parties are aware of the extent of the obligations entailed.
For a client to receive all services that are relevant to the sale of the property, the lawyer must be aware of the details regarding the deal. They need to be privy to any promises made by the seller, such as whether the property will come with added amenities or coverage for repairs should damage be sustained by the end of the deal.
A conveyancing lawyer will keep their client informed of the status of the transfer, and most importantly they will ensure that the client knows when they’re not getting the full value of the property. If the lawyer can see that the price is excessive, then they may advise the client not to go through with the purchase.
It’s possible for the lawyer to investigate the valuation on their client’s behalf. Through their investigation the lawyer may learn of information that leads them to believe the valuation is fair, or that the client was misled. Should the latter be true then the lawyer can take steps to remedy the situation.
Should their client not agree to the retainer fee upfront, then they can pay a deposit to secure the services so long as the lawyer uses the funds to actually complete the work that was agreed on.
Any money that is paid into a lawyer’s trust account should not be touched by the lawyer unless they have a written authority signed by the client upholding their request. A lawyer can never use trust funds to pay their own accounts.

Conveyancing Steps

Once you have selected your conveyancing solicitor, it is simply a case of sitting back and letting them do their job. The usual steps they will take are as follows:

Initially, make sure you have the title deeds relating to the property and that they are in order. You then complete an instruction form for your solicitor together with a signed undertaking. This is basically a promise that you will give your solicitor all the necessary information that they request and you understand that they will act on your instructions.
After receiving your authorisation, your solicitor will send the contract of sale to the purchaser’s solicitor and when it is received, this will be acknowledged in writing by the purchaser’s solicitor.
All agreed items are inserted into the contract of sale and returned to the purchaser’s solicitor, advising them of any short period of notice required for vacant possession of the property. This process will continue until the purchasers solicitor is satisfied with the contract of sale and has a complete chain of documents showing how ownership of the property passed from the original seller to the present seller of the property.
A formal contract is prepared and signed by all parties involved in the sale.
The contract identifies both the seller and the purchaser, and states the selling price, description and address of the property, payment terms, and any other special conditions or attachments, and is then executed.
The stamp duty on the contract must be paid and proof of payment is often required by financial institutions.
After all parties have signed the contract, it will be handed over to your solicitor to register your interest in the property.
It is then up to your solicitor to draw up and forward your new mortgage to the appropriate party.
The contract of sale is then lodged with the Department of Lands through the land titles office together with a transfer of land and documents showing they have been signed by two witnesses.
Any stamp duties must also be established and provided to the relevant people.
The property will then be handed over to the purchaser, upon the receipt of funds.
After the property has been transferred into the new owner’s name, everyone involved in the sale will be notified and the buyer’s bank will also be informed about the title.
All outstanding suppliers for the old property will then be written off and paid, and any surplus funds are forwarded to the old owners.

Above all, your solicitor has a general duty not to mislead anyone during the transaction and is only acting on their written instructions. Your solicitor must therefore not act unless they are reasonably satisfied of the accuracy of the information provided and disclosed.

Fees and Charges in the Conveyancing Process

Fees and Costs
The typical fees in conveyancing are as follows:
These are only the approximate costs of conveyancing. The normal practice is to have the client (or the party paying for the conveyancing) pay for the disbursements used on their behalf. If you use a law firm for our conveyancing, it will normally ask you for a deposit to cover the costs it may incur and charges it may incur on your behalf, managed through the use of an Accountable Office.
If you are buying or selling a residential property, the seller will usually pay for the search fees and the land title office fees due to the fact that the seller has the more ‘goings on’ then the buyer (in the transfer of land tables are contained in the Property Law Act 1969 (WA)). If you wish to get your own building or pest inspection, it is wise to inform your solicitor so that the costs of them can be included in the initial deposit provided to them.
One other fee you may need to pay relates to Stamp Duty. This is a tax paid to the State Government and the amount varies depending on the price range of the property and whether the purchaser is a first home owner.

Common Conveyancing Problems

Despite the best-laid plans, however, there are times when things simply don’t go according to hope. In particular, a couple of key issues can sometimes arise, including:

1. Pre-Contract Problems

One issue commonly faced by buyers is finding themselves a little over eager – perhaps they’ve been shown a stunning property and it’s everything they’re looking for, but financial realizations later reveal that they are unable to go ahead with the purchase, or at least at the price they’d hoped for. If you think you will be unable to complete the purchase, then it’s always best to pull out as early as possible.
Sometimes, however, a problem arises due to something involving the vendor or their own situation. There’s no obligation for a potential buyer to inform their conveyancer of any problems or issues with their search – honesty is not a precondition of the purchase/submission process. Buyers should therefore take particular care in responding to pre-contract spurious claims that the converse is the case and that they have some sort of overriding obligation to inform their lawyer of the existence of any issues – without conclusive proof of the need to do so, this simply isn’t the case.
For those of you that do face issues, if the deal isn’t going to go through you must be prepared to inform the solicitors of both yourself and the vendor as soon as possible, it is your responsibility as the buyer to ensure completion of the impediment-free process – anything less and you run the risk of losing your deposit, along with the right to make any claims against the party responsible.

2. Exchange Issues

When a sale goes ahead, it is contractually binding on both parties. Buyers may have to face an unexpected expense that arose after contract, or perhaps even a price increase from the vendor, although the latter situation is rarer in practice . If any such event occurs, buyers seeking to go ahead can find themselves at risk of being unable to fund the purchase (through changes in the country’s mortgage regime, for example), whilst sellers may seek to extricate themselves by arguing that the deal will be unfavourable or too expensive to complete.
To protect against such eventualities, it is essential to insure yourself against any increase in price before you sign. For example, if you’re purchasing a property worth £200,000, you’ll need to ask conveyancer whether there will be any change to the stamp duty payable on the next price threshold (nearly £400,000) and whether there are any clauses within the sales agreement that will be affected – failing to do so can cost you, the buyer, a lot of money, and put the whole process as risk if it suddenly becomes in doubt/more expensive soon after signing. To avoid this, if you are worried about this happening, you should make the vendor aware of your fears and obtain assurance that the property will remain at its current price until you’ve had a chance to obtain a quote for changing filters, etc.

3. Completion Issues

Some buyers find their circumstances change substantially after contracts are signed. Issues such as partner/relative illness or even death can jeopardize the process, as well as a reduction in salary/wage that means affordability is now a problem. Once again, communicating with your solicitor is crucial to minimize the risk of losing the deposit money you’ve put down, though there is no way of guaranteeing against such a threat.
The above are just 3 common examples of problems that can occur during a conveyancing process – having legal representation you can trust always helps ease the completion of any potential hurdles prior to the exchange of funds for deeds. For more information, seek advice from a legal professional who specializes in the area of conveyancing.

Selecting an Approved Conveyancing Lawyer

For many, the most important aspect when selecting a conveyancing lawyer is to ensure they are competent in their field. Not all lawyers possess the same skills and knowledge and it is crucial to find a lawyer with substantial experience in the field you require assistance. When hiring a conveyancing lawyer, find out from them how long they have been practicing for, and whether this has included experience with your particular circumstances.
Likewise, you should find out what other clients have said about the firm or individuals employed by the firm of your choice. While it is likely that the firm will show you only the best of their client recommendations, valuable information can be gleaned if one searches online. Websites such as Yelp are a great resource for finding out what other clients have to say about a certain business. Online reviews tend to be more honest and less biased than word of mouth recommendations. Look to see whether the respondents to any surveys or those leaving reviews are satisfied with the service they received and whether they would recommend the lawyer or law firm of your choice.
It is often beneficial to visit the conveyancer’s offices and speak to them directly. This might sound simple, but it can also be important to visit or call the lawyer’s office at various times of the day to ensure you are getting the best service. You may wish to call the lawyer during lunch hours or close to the end of the work day to ensure that you receive the same cordial service. You should also review the written communications you receive: are they clearly worded and well-drafted? This can be an indicator of whether the lawyer has a good grasp of language and English conventions, or whether they are perhaps in too much of a rush to focus on their work.

Digital Conveyancing

Buyers and sellers are increasingly relying on technology to navigate the often challenging real estate transaction process. From selling a property to conducting a title search, businesses are utilizing technology to minimize office visits and improve services. With the rise of online transaction platforms, mobile apps, and virtual office tours, buyers and sellers can transact without ever having to step foot in an agent’s office.
Additionally, buyers and sellers now have a plethora of online tools at their disposal that allow them to assess the value of a prospective property, and possibly make an offer based on that valuation. An app like Homesnap uses pictures from the Multiple Listing Service (MLS) to provide real estate information on a property and its surroundings. Users can find the price, size, and details of a home when they point their phone cameras at a building. Once a home is identified, users can use the app to contact an agent who can connect them with other useful tools.
Tenure status apps gives users inferences about what kind of property they can expect in a given area whether it is freehold or leasehold. Property price applications consider a user’s budget and other preferences to find the best match for their criteria.
Information websites such as Zillow and Trulia offer a different experience. Their primary goal is to collect and identify high quality properties from various listings. By entering a few details, users can determine if there is a suitable property that meets their needs in their preferred area. Sellers and buyers can utilize these online resources to educate themselves on purchase options, services, and even discover mortgage calculators.
While many of the above tools aid buyers, sellers are also provided with online platforms to enhance their sales transactions. For example, online listing platforms reach buyers through various outlets and increase the visibility of a home. These listing platforms use interactive maps and info-graphics to further entice buyers.
Yet, while buyers, sellers and managing agents may rely on the latest technologies to ease their transactions, many related activities still require the assistance of lawyers. For instance, title searches are still crucial to sales transactions and a skilled lawyer is needed to ensure nothing has been overlooked. While e-documents and electronic signatures may make transactions immediate, the expertise and availability of good legal advice should not be displaced.

Future Directions of Conveyancing Law

Emerging trends and predicted developments in conveyancing law are likely to include a continued focus on transparency and protection for consumers. In particular, the idea that the conveyancing process should be quicker and simpler may gather pace, strengthening the argument for e-conveyancing or electronic conveyancing, which has been gradually emerging over the last few years. E-conveyancing involves the provision of all documentation for a property transaction in electronic format, removing the need for paper copies, physical signatures and wet signatures. In particular, legislation such as the Commonwealth Electronic Conveyancing National Law aims to shift the conveyancing process away from reliance on paper titles and cheques, in order to improve efficiency and reduce transaction costs. In reality however, e-conveyancing has not yet hit mainstream consolidation, due primarily to the relatively slow uptake by banks and home mortgage borrowers. It can be expected that this will change over time, as increasing numbers of people turn to online banking , and the processes for managing client data and information will inevitably move towards greater digitalisation. At the same time, it is likely that the growth and influence of proptech firms will begin to impact on the work of conveyancers. Proptech firms have been emerging sporadically in Australia throughout the last 5 years or so, with apps and websites aiming to meet specific needs within the property industry, such as property search or mortgage broking. Overall however, these have largely been personal start-ups that have had limited influence on the conveyancing market to date. Nevertheless, in the UK, the "instant online conveyancing" services, and online estate agency firms have had a much larger impact on the real estate market, using technology to cut out the majority of the bureaucratic and administrative work that typifies most property transactions. Given the significant amounts currently spent by Australians on legal fees for property transactions, it is easy to see the business case for the introduction of e-conveyancing in Australia, and the recent sharp increase in proptech start-ups suggests that this is already in progress.