Conveyancing is the surprisingly complex process of transferring property from one person or entity to another.
Though generally similar to residential conveyancing, commercial conveyancing tends to be even more challenging. Many additional factors need to be taken into consideration when dealing with commercial land transfers, including permitted uses, commercial leases, land tax implications, zoning, and more.
Moreover, clauses that are routinely present in residential conveyance contracts (such as a cooling down period) are notably absent from commercial conveyancing contracts, making them more difficult to discharge.
Conveyancing Timeline:
- Investigations into Property: Usually the largest and most time-consuming portion of any conveyance.
- Contract of Sale Creation: Making an arrangement for purchase based on mutual consideration.
- Payment of Fees (land tax, water consumption charges, fees, rates, governmental regulations, and etcetera)
- Negotiating with financiers and mortgagors:
- Buyers will negotiate with their financiers to make certain that their prerequisites are satisfied pre-purchase.
- Sellers will negotiate with their financiers to establish settlement terms and discharge any mortgages held against the title.
- Settlement: The final exchange of the money and documents.
Investigations into Property
Investigations into property make up the largest portion of the conveyancing process. Also known as ‘due diligence,’ property investigations can discover whether there are any claims on the property, title issues, encumbrances, and notice issues among other things that might cause issues with either a seller’s ability to successfully transfer title or a buyer’s ability to effectively take the title. As a buyer, you will want to guarantee that the property you are purchasing is devoid of any deficiencies and is not subject to any title issues.
If I am Selling, Why Should I Investigate my Own Property?
These investigations are nearly always conducted by a prudent purchaser to make sure that the property they are buying is not subject to any unforeseen encumbrances. So why should a seller be concerned with performing a title search/property investigation themselves? Because, in the unfortunate case that a property search shows the notice of noncompliance with laws or regulations, the Seller may opt-out of compliance with said law or regulation by disclosing the deficiency in the contract. If disclosed, the Buyer has the ability to assume the obligation of compliance and the Seller can avoid liability. Without conducting a property investigation, however, the Seller may not discover the property’s noncompliance until it is too late, subjecting them to liability when the Buyer’s search discovers the notice issues.
The Contract of Sale
Documents Included in the Contract of Sale: Certificate of Title; Property Plan; Zoning Certificate; Sewage Certificate, Mortgage Arrangement and/or the Discharge of Mortgage.
Essential Contract Terms:
- Parties to contract, including names and residential addresses;
- Description of the Property in question. This description must be full and sufficient to describe the property well enough for identification purposes and including precise location.
- Sale consideration clause. Simply states the details of the agreement between the parties, describing the consideration offered by each.
Why Do I Need a Conveyancing Lawyer?
Contracts of sale for Commercial Conveyances will also likely include a range of warranties made by the seller of the land to the purchaser. If these warranties are breached in any way (usually by noncompliance with legislative requirements or unpermitted use of the property) the purchaser will be granted the right of termination. A specially trained conveyancing lawyer will have the skill and experience necessary to double-check for these issues prior to contract formation, reducing the worry for both parties that the contract will not fail and the conveyance will proceed through to the end of the settlement.
If you have any queries regarding the above, please do not hesitate to contact us at Big Law Solicitors on 1800 431 592 or email us at mail@biglaw.com.au.
