If you’re planning on buying or selling a property in Queensland, then understanding the ins and outs of conveyancing is essential. There’s a number of steps and documents to take note of and as it’s a crucial part of any property transaction, getting it right can make all the difference. So, let’s take a closer look at the process of conveyancing in Queensland.
- The Basics
- Purchasing a property: the process, documentation and legal issues
Documentation & legal issues
- Selling a property: the process, documentation and legal issues
The pre-sale process
The sale process
- What is e-conveyancing?
- Tips for a Smooth Conveyancing Process
- Common Conveyancing Pitfalls to Avoid
- Frequently Asked Questions
What is Conveyancing?
Conveyancing is the process of transferring the legal ownership of a property from the seller to the buyer. This process has several steps (that can differ in each state) and a number of legal procedures that need to be followed. From preparing legal documents, conducting property searches, liaising with the other party, to finally settling the transaction, there are a number of key steps to be aware of and pitfalls to avoid.
What are the Benefits of Using a Conveyancer/Solicitor?
Conveyancing can be complicated and buying a property is usually one of the biggest financial investments a person will make, so it’s helpful to have an experienced conveyancer/solicitor to help you through the process. Some benefits to using a professional conveyancer/solicitor rather than taking it on yourself include:
- Expertise: A conveyancer/solicitor has the expertise to handle the legal procedures and ensure that the transaction is completed without any hitches.
- Time-saving: A conveyancer/solicitor can help you save time by handling the paperwork and liaising with other parties on your behalf.
- Risk management: A conveyancer/solicitor can help you manage the risks associated with the transaction, such as outstanding debts, encumbrances, and legal disputes.
Unique elements of conveyancing in Queensland
There are several unique elements in the Queensland conveyancing process compared with other states. If you haven’t dealt with a Queensland property sale before, it’s good to be aware of the following:
- Cooling-off Period: In Queensland, there is a five-day cooling-off period for the sale of residential properties during which the buyer can withdraw from the contract. However, bear in mind that if you terminate under cooling off you will pay a penalty equal to 0.25% of the purchase price.
- Transfer Duty: Transfer duty is payable on all property transactions in Queensland, and the amount payable varies depending on the property’s value and whether you are purchasing the property as an investment or as your principal place of residence. Transfer duty is not a flat rate, but instead is levied in tiers in much the same way as income tax.
- Body Corporate Searches: If the property is part of a strata scheme, it is strongly recommended that you consider making your contract subject to a satisfactory Body Corporate Records Inspection to ensure that there are no outstanding levies, special levies to be struck, costly building works to be undertaken or other issues that may affect the property.
- Time is of the essence: In Queensland, unlike some other states in Australia, time is of the essence for most contract conditions. This means that if you miss a crucial date like finance, payment of deposit, pest and building inspection or settlement, it might be treated as a breach of contract. It is crucial that you are able to strictly meet the dates set out in the contract.
Purchasing a property: the process, documentation and legal issues
Before the purchase of a property, there are a number of areas to think through some of which you’ve likely already considered. These include:
- Establishing a budget: The first decision to be made is one of the most important, what is your budget? You need to understand what you can afford to spend and if you are planning on taking out a loan, this can be a good stage to seek financial advice.
- Identifying the type of property: What kind of property are you looking to buy? You will find this is a filter in your Domain and Real Estate apps and helps narrow your search.
- Researching the market: Research is a critical step. You want to understand how much the market is paying, what the supply of properties is like in the area and price range you’ve set and how fast they are disappearing off the market. Spending time researching and watching sales can be invaluable in setting your expectations and not overvaluing properties you are interested in.
Making an Offer
When you’ve found a property of interest, the next step is to make an offer. This requires:
- Contacting the agent: Contact the agent and express your interest in the property.
- Making an offer: Make an offer on the property, either verbally or in writing.
- Negotiating: Negotiate with the agent to reach a mutually acceptable price.
Conducting a Contract of Sale
Your offer has been accepted! Once an offer is accepted, the next step is to sign a contract of sale. A solicitor is helpful here as they can help ensure that the contract is fair, legally binding and meets all the necessary legal requirements.
The main steps here include:
- Reviewing the contract: Review the contract, you can do this on your own or seek legal advice. We are always happy to look over contracts and provide advice to give you peace of mind. Where necessary, we can negotiate changes on your behalf as well as draft special conditions.
- Signing the contract: Sign the contract of sale, along with the seller.
- Paying the deposit: Pay the deposit as specified in the contract of sale. This is an essential term and a deposit not paid by a due date will enable the seller to terminate the Contract.
Conditions of Contract
Please ensure you book your Pest and Building Inspection, make application for your finance, undertake a Body Corporate Records Inspection (if applicable) and provide instructions in relation to the outcome of these items by the due date.
Doing a Pre-Settlement Inspection
Prior to settlement you are given the right to complete a pre-settlement inspection.This is essential to ensure the property is in the same condition as when you made the offer. During this inspection, make note of any defects or issues that may need to be addressed before settlement.
Finalising the Purchase
The last stage of the process, it’s time to finalise the purchase. This requires settling the transaction by paying the remaining balance and transferring the legal ownership of the property to you.
What is the Average Timeframe for Conveyancing?
The average timeframe for conveyancing in Queensland can vary depending on the complexity of the transaction. Generally, most contracts will be signed with a 30 or 45 day settlement period from the time the contract is signed to settlement. However, it’s essential to be aware that delays can occur due to various factors, such as issues with the property, outstanding debts, legal disputes, and other issues.
Documentation & legal issues
What documents are needed during the sale process?
Several documents are needed during the sale process to ensure a smooth and legal transaction. Your solicitor can help with all of these, including:
- Contract of Sale: This contract was mentioned during the buying process above and refers to a document which sets out the terms and conditions of the sale, including the purchase price, deposit, settlement date, and any special conditions.
- Disclosure Statement: This is required if there is a Body Corporate. This is a document that outlines basic information relating to the body corporate like your liability for body corporate costs like contributions to the sinking fund and administration fund. The Disclosure Statement also provides details in relation to the Body Corporate’s insurance and any known defects or issues with the property that the seller is required to disclose to the buyer.
- Title Search: This search reveals the legal ownership of the property and any registered encumbrances or interests that may affect the transaction.
- Transfer Form: This document transfers the legal ownership of the property from the seller to the buyer.
- Property Searches: We will obtain property searches on your behalf relating to things like outstanding rates and water bills, whether the land is contaminated or whether the Department of Transport and Main Roads have indicated that they have requirements for the land.
Obtaining a Certificate of Title
A Certificate of Title no longer has any legal status in Queensland. In 2019 Queensland passed a law which removed the requirement to present a Certificate of Title in order to transfer a property. This law also means that existing Certificates of Title or Title Deeds have no effect.
However, the buyer or their solicitor must conduct a title search through the Queensland Titles Registry. The search will show if there are any encumbrances, interests, or other issues that may affect the transaction.
Potential legal issues that could arise during conveyancing
Several legal issues could arise during conveyancing, which could delay or even prevent the transaction from proceeding. The benefit of having an experienced solicitor to help with conveyancing is shown here are they can help you navigate any rocky territory. Some of the most common legal issues include:
- Title Defects: If there is an issue with the title, such as outstanding debts (noted as Mortgages, Writs or Caveats), Administrative Advices, Owner Builder notifications, the transaction may be delayed or in some instances, canceled.
- Contract Breach: If either party breaches the terms of the contract, such as failing to pay the deposit or settle on the agreed date, legal action may be taken.
- Disputes: Disputes can arise between the buyer and seller, such as issues with the property condition or the contract terms.
- Easements: An easement is a right granted to someone to use a property for a specific purpose, such as accessing a shared driveway. If there is an easement on the property, it could affect the buyer’s intended use of the property.
- Boundary Disputes: Boundary disputes can arise if there is uncertainty or disagreement about the exact location of the property’s boundaries. This could result in delays to the transaction and potentially even legal action.
- Planning and Building Approvals: If the property has been renovated or extended, the buyer needs to ensure that all necessary planning and building approvals have been obtained. Failure to do so could result in significant legal and financial implications.
- Encumbrances: An encumbrance is a legal claim on the property, such as a mortgage or a caveat. The buyer needs to be aware of any encumbrances on the property that could affect the transaction.
- Caveats: A caveat is a notice lodged on the title to prevent any further dealings with the property. If there is a caveat on the property, it could delay or even prevent the transaction from proceeding. The buyer needs to investigate the reason for the caveat and take appropriate action to remove it if necessary.
- Covenants: Covenants create a restriction over the property. These could be related to the type of house that can be built, restrictions on clearing vegetation, restrictions on keeping of pets etc.
What to do about transfer duty
Transfer duty, also known as stamp duty, is a tax payable on the transfer of property ownership. In Queensland, the amount of transfer duty payable depends on the purchase price of the property. The buyer is responsible for paying the transfer duty, which must be paid on the earlier of 60 days from the date that the contract goes unconditional, or at settlement. It’s essential to seek legal advice to determine the correct amount of transfer duty payable, whether any concessions are available and to ensure that it is paid on time to avoid interest and potential penalties.
What to do if a contract is breached
If either party breaches the terms of the contract, legal action may be taken. This could involve enforcing the contract’s terms, claiming damages, or terminating the contract. It’s essential to seek legal advice as soon as possible if a breach occurs to understand the options available and protect your legal rights.
Selling a property: the process, documentation and legal issues
The pre-sale process
What are my obligations of disclosure to advise an agent when selling?
When you decide to sell your property, you will likely want to engage the services of a real estate agent. It is important to be upfront and honest with your agent about any issues with your property.
You have an obligation to disclose any known issues that may affect the value or desirability of the property. This can include issues such as termite damage, plumbing or electrical problems, or disputes with neighbors. Failure to disclose these issues could result in legal action against you.
What if I have a tenant in my property?
You might choose to sell the property either tenanted, or with ‘vacant possession’.
If you sell the property with a tenant then you must disclose the terms of that tenancy to the Buyer in the contract. This includes things like the rent paid each week and the length of the lease.
If you note in the contract that you are selling with vacant possession then you must ensure that there is no one living in the property at settlement.
If you have a tenant in your property and want to sell with vacant possession then you must provide them with a Notice to Leave.
This notice must be given in accordance with the Residential Tenancies and Rooming Accommodation Act 2008 (Qld). You must also ensure that the tenant is given appropriate notice before any open homes or inspections take place. It is important to communicate with your tenant and make arrangements to ensure that the sale process is as smooth as possible.
Further, if you are selling with vacant possession then you are responsible for ensuring that the tenant has actually vacated the property before settlement.
If you have any questions about tenancy matters feel free to contact the friendly team at Paramount Legal.
Do I have to obtain an ATO Clearance Certificate?
As a seller, you are required to obtain an ATO Clearance Certificate if the sale price is $750,000 or more. The certificate confirms that you are not a foreign resident and that the buyer is not required to withhold any amount under the foreign resident capital gains withholding regime.
If you do not obtain this certificate, the buyer may be required to withhold 12.5% of the purchase price.
How/when do I notify my bank that I have sold?
If you have a mortgage on the property, you must notify your bank or lender that you have sold the property and complete the bank or lender’s Release Authority. This will provide them with the relevant authority to allow them to calculate the final payout figure, which includes any outstanding balance, interest, and fees.
This will also ensure that your bank is ready to release your mortgage at settlement in exchange for a payout of your outstanding home loan balance.
You may also need to provide notice of your intention to sell if you have a fixed-term loan, as you may be charged a break fee if you sell before the end of the term.
Providing vacant possession?
If you have indicated on the contract that the property is being sold with vacant possession then the property must be completely empty of all occupants and belongings. If there is a tenant in the property, you must ensure that they have vacated before settlement. It is important to communicate with the tenant and provide notice of the required move-out date to ensure that vacant possession is provided on settlement day.
The sale process
The contract of sale is a legally binding document that sets out the terms of the sale. In Queensland the contract is usually prepared by the selling agent but you might choose to engage a solicitor to read the contract before you sign it to ensure that it’s legally valid and meets all the necessary requirements.
Marketing the property
A big part of selling your property is making as many potential buyers as possible aware of it. One of the selling points of enlisting a real estate agent is their ability to market the property to the largest possible audience. This can include things like professional photography and videography, listing it on real estate websites and holding open house inspections.
Accepting an offer
When a buyer makes an offer on your property, you have the option to accept, reject, or negotiate the offer. If you accept the offer, you’ll need to sign the contract of sale and the buyer will be required to pay a deposit. Hooray!
Signing a contract (different in QLD to NSW)
In Queensland, the process of signing a contract is different from other states such as New South Wales. In Queensland, the contract is signed by the seller first, and then provided to the buyer for their signature. It’s the reverse in NSW.
Settlement is the final stage of the sale process. It involves the transfer of ownership from the seller to the buyer and the payment of the balance of the purchase price. Settlement is typically conducted by a settlement agent or solicitor who will ensure that all legal and financial requirements are met before the settlement is completed.
What is e-conveyancing?
When it comes to buying or selling a property in Queensland, the conveyancing process can be complex and time-consuming. However, in recent years, the rise of electronic conveyancing (eConveyancing) has streamlined the process and made it easier and more efficient for buyers and sellers.
eConveyancing is a secure, digital way of conducting conveyancing transactions, including the exchange of contracts, settlement and lodgement of title documents. It replaces the traditional paper-based system with a faster, more secure, and more convenient online platform.
Here what you need to know about eConveyancing in Queensland:
The Platform: In Queensland, the main electronic platform used for eConveyancing is called PEXA (Property Exchange Australia). PEXA is a secure online platform that allows conveyancing professionals to manage all aspects of the conveyancing process electronically.
The Benefits: One of the main advantages of eConveyancing is speed. Paper documents are removed and transactions can be processed in real-time, which means that settlements can be completed faster than with traditional conveyancing methods. Additionally, eConveyancing is more secure and less prone to errors, thanks to the use of digital signatures and the secure PEXA platform.
The Process: The eConveyancing process in Queensland involves the following steps:
- Verification of identity: All parties to the transaction, including the buyer, seller, and their representatives, must be verified before they can use the PEXA platform.
- Contract preparation: The buyer’s conveyancer will create a contract for sale, which will be sent to the seller’s conveyancer for review and approval.
- Signing the contract: Once the contract has been agreed upon, it can be signed electronically using DocuSign or a similar platform.
- Settlement: On settlement day, funds are transferred electronically through PEXA, and the title of the property is transferred from the seller to the buyer.
- Lodgement: Finally, the transfer of title and any mortgage documents are lodged electronically with the Titles Registry.
The Future: The use of eConveyancing is rapidly expanding throughout Australia, and in Queensland it is now mandatory for many transactions.
If you have any questions about eConveyancing reach out to our team of experts in property law.
Tips for a Smooth Conveyancing Process
Tip #1: Choose the Right Conveyancer/Solicitor
The right conveyancer can make a world of difference in the conveyancing process. A good conveyancer will help guide you through the process, provide you with the necessary documentation, and ensure that everything is done legally and correctly. When choosing a conveyancer, consider their experience, reputation, and fees. Don’t be afraid to ask for references or to shop around for the best conveyancer for your needs!
Tip #2: Be Prepared
Before starting the conveyancing process, make sure you have all the necessary documentation and information ready that you can. Depending if you are buying or selling this includes things like the title search, a survey plan, and a contract of sale. It’s also a good idea to obtain pre-approval for any necessary loans, such as a mortgage. Being prepared can help expedite the process and prevent unnecessary delays.
Tip #3: Stay in Communication
Clear communication between all parties involved in the conveyancing process is crucial. Make sure you keep in regular contact with your conveyancer, real estate agent, and lender to ensure that everything is on track. If any issues or delays arise, it’s important to address them as soon as possible to avoid further complications.
Tip #4: Understand the Process
It’s essential to understand the conveyancing process, so you know what to expect and what’s required of you. Reading through this article is a good start, however if you can’t remember everything that’s ok! Our team can help guide you through the process.
Common Conveyancing Pitfalls to Avoid
Pitfall 1: Not Doing Proper Due Diligence
ailing to do proper due diligence before purchasing a property can lead to a host of issues down the line. This includes things like hidden defects, unpaid taxes, or legal disputes over the property. Make sure you undertake a pre-purchase inspection, review the contract of sale carefully and verify any claims made by the seller before finalising the purchase.
Pitfall #2: Not Understanding the Contract
The contract of sale is a legally binding document so it’s essential to understand what you’re signing. Failing to do so can lead to costly mistakes or legal issues. Make sure you review the contract carefully, seek legal advice and ask any questions you may have before signing.
Pitfall #3: Not Getting Finance in Order
Obtaining finance is a crucial part of the conveyancing process, and failing to get it in order can lead to delays or even cause the sale to fall through. Make sure you obtain pre-approval for any necessary loans, have all the necessary documentation ready, and keep in regular contact with your lender.
Frequently Asked Questions
At what point do you get a conveyancer?
It’s a good idea to engage a solicitor as early as possible in the buying or selling process. They can advise you on your legal obligations and ensure that the transaction runs smoothly. In Queensland we do not have a scheme for registered conveyancers in the same vein as New South Wales. Instead, we have a number of paralegals that work closely with our experienced Solicitors to ensure that the conveyancing process is completed smoothly.
Can I do my own conveyancing?
In Queensland, you are not required to engage a solicitor to handle the conveyancing process. However, it’s not a process to take on lightly. There are a number of complex legal steps, and it’s easy to make mistakes. Engaging a professional can help ensure that the transaction goes smoothly and that your rights and obligations are protected.
How long does conveyancing take?
The length of the conveyancing process can vary depending on a range of factors, including the complexity of the transaction and the responsiveness of the parties involved. On average, the process often takes around 6-8 weeks.
Is it better to use a solicitor or conveyancer?
When it comes to the conveyancing process, you might have wondered whether you should undertake the process yourself, or hire a conveyancer or solicitor to handle the process. So what’s the difference?
In Queensland you cannot engage a registered conveyancer to complete your property transaction. Some Australian states, such as New South Wales, have a scheme to allow registered conveyancers to complete property transactions. Queensland does not allow this.
In Queensland, you should ensure that you engage a firm of Solicitors who are a member of the Queensland Law Society.
Solicitors are legal professionals who have completed a law degree and are admitted to practice as solicitors. They have a broad understanding of the law and can provide a wide range of legal services, including representation in court. They are able to provide a comprehensive and personalized service that is tailored to your specific needs.
You will find that our Solicitors at Paramount Legal are assisted by a number of very experienced Paralegals who will assist with your conveyancing.
Do you pay a conveyancer/solicitor upfront?
This depends entirely on the solicitor or conveyancer you are looking to hire. It’s important to discuss the fee structure with your conveyancer or solicitor before engaging them, to ensure that you are comfortable with the arrangement.
Do I have to pay a conveyancer if the sale falls through?
In most cases, conveyancers and solicitors will charge a fee for their services regardless of whether the sale goes ahead. However, some may offer a reduced fee or a refund in certain circumstances. It’s important to discuss the fee structure with your conveyancer or solicitor before engaging them.
Can conveyancing be done without a solicitor?
In Queensland, you are not required to engage a solicitor to handle the conveyancing process. However, it’s important to note that conveyancing involves a number of complex legal issues, and it’s easy to make mistakes. Engaging a professional can help ensure that the transaction goes smoothly and that your rights and obligations are protected.
Should I get my lawyer to read the sale contract before I sign it?
It’s always a good idea to have a legal professional review any legal documents before you sign them. At Paramount Legal we are always happy to review the sale contract and advise you on any issues or concerns we identify. This can help you avoid any potential legal pitfalls down the line.