We get asked many questions every day. Some are easy to answer, some are more complicated. Some we get asked more frequently than others. To assist you we’ve put together some answers to our most Frequently Asked Questions (FAQs). If you have a question that is not answered below, please give us a call. We would be only too happy to talk to you.
Wills and Estates
What is Conveyancing?
Quite simply, conveyancing is the process of transferring the legal ownership of a property from one person (the Seller or Vendor) to another (the Buyer or Purchaser). There are a number of steps that both the Vendor and Purchaser are required to take during the conveyancing process. Each state of Australia has its own conveyancing process. Purchasers from interstate should understand that your local solicitor may not be able to carry out a conveyancing transaction in New South Wales for you. Even then, there is a great deal of value in instructing a conveyancing lawyer that regularly carries out conveyancing transactions in New South Wales.
For both the Vendor and Purchaser the conveyancing process can feel long, and at times complicated. It can be an anxious time for both. First home buyers can feel a little lost and out of their depth during this time. We will do our best to explain and lead you through the process to make it as straight forward as we can for you.
Normally, the conveyancing process involves three stages:
- Post-contract pre-settlement; and
The pre-contract period is the period before the Vendor and Purchaser enter into the Contract, known as “exchange”. During this period the terms of the contract are negotiated and the Purchaser would carry out some due diligence, such as obtaining a pest and building report, and/or survey. In the period after exchange and before settlement, the conveyancing lawyers for both parties make arrangements for settlement to take place. A Purchaser’s lawyer would normally undertake further due diligence, known as testing the vendor’s title. Following settlement, the Purchaser obtains the keys from the agent, if there is one. The Purchaser’s lawyer will attend to lodging any documents with Land & Property Information necessary to transfer the ownership of the property. However, as most Purchasers borrow money to buy their home it is normal for their bank to lodge the necessary documents.
It is becoming more common for conveyancing transactions to take place electronically. In a very short space of time all conveyancing will be eConveyancing. Electronic conveyancing takes place through PEXA – Property Exchange Australia. Killen & Associates has been carrying out conveyancing transactions through PEXA since November 2016 . It is our goal for all of our staff (solicitors and paralegals) to be PEXA Certified so that we can deliver the best service we can to our clients.
So how can we as conveyancing lawyers help you? First and foremost, we will provide you with fiercely independent advice designed to solely protect your interests. As either a Vendor or a Purchaser you should understand that developers, real estate agents and the other party all have their own interests in the transaction. They do not always match your best interests. If you are planning on buying or selling a home, vacant land, or commercial property then please give us a call. There is no obligation and we’d love to speak with you.
What is the conveyancing process?
Normally, the conveyancing process involves three stages. They are:
- Post-contract (pre-settlement); and
The description of the conveyancing process below assumes that the conveyancing is proceeding on paper and is not an electronic settlement conducted through PEXA. Electronic settlement offers some efficiencies over paper based settlements but, generally the steps taken are very similar. Killen & Associates is PEXA Certified, as our all of our staff. Our preference is for an electronic settlement conducted through PEXA.
The pre-contract stage
This stage comprises everything that happens before contracts are exchanged. An exchange of contracts takes place when the representatives for both the buyer (known as the purchaser) and seller (known as the vendor) exchange identical copies of the contract signed by the purchaser and the vendor. The purchaser will keep the vendor’s signed contract and the vendor will keep the purchaser’s signed contract. Normally, until contracts are exchanged neither the purchaser or vendor are bound by the contract. The activities that take place during this stage include the following:
- The vendor’s solicitor makes all required searches and drafts the Contract for Sale and Purchase of Land (Contract).
- The vendor’s solicitor will check the Contract for compliance with the vendor disclosure legislation and make seek further information from the vendor.
- The vendor’s solicitor may advise the vendor on the real estate agent’s agency agreement.
- The vendor’s solicitor may obtain copies of any documents required to be attached to the contract including building certificates and surveys.
- The vendor’s solicitors will send a copy of the Contract to the vendor’s real estate agent when it is complete.
- When a purchaser is found the vendor’s solicitor will review the sales advice received from the agent and will send an identical copy of the Contract to the purchaser’s solicitor.
- The purchaser’s solicitor, after receiving the Contract, will review the contract and discuss it with the purchaser and will point out:
- any onerous or undesirable conditions and obtain instructions for amendments (if any) required,
- advise and take instructions on any pre-contract searches, enquiries, and inspections,
- advise as to survey and building certificate, and
- advise the purchaser about cooling-off provisions and take the purchaser’s instructions to provide a cooling-off certificate.
- The purchaser’s solicitor will obtain confirmation from the purchaser that the purchaser’s loan has been approved unconditionally.
- The purchaser’s solicitor will make any pre-contract searches and enquiries in accordance with the purchaser’s instructions.
- The purchaser’s solicitor will advise the vendor’s solicitor of amendments required (if any).
- The vendor’s solicitor will consider and advise the vendor on the request for amendments of the Contract.
- Once the terms of the Contract are agreed, all searches and enquiries are returned satisfactorily, and the purchaser has received an unconditional approval for their loan the purchaser’s solicitors will advise the purchaser as to payment of the deposit.
- The solicitors for the vendor and the purchaser will make arrangements for and attend to exchange of the Contract on behalf of their clients.
The post-contract (pre-settlement) stage
The post-contract stage commenced immediately after the Contract has been exchanged. During this stage it is the goal of the vendor’s solicitor to ensure that the vendor is ready to transfer title (ownership) of the property to the purchaser at settlement. It is the goal of the purchaser’s solicitor to ensure that the purchaser is in a position to pay the purchase price at settlement and to accept the title of the property. This stage comprises of all activities required for a successful settlement, such as the following:
- The vendor’s solicitor will obtain and serve a land tax certificate on the purchaser’s solicitor.
- The purchaser’s solicitor will order any searches and make any enquiries necessary to confirm the vendor’s title to the property being sold.
- The purchaser’s solicitor will attend to obtaining a survey and building certificate if instructed to do so by the purchaser. Alternatively, the purchaser’s solicitor may make arrangements for title insurance to protect the purchaser.
- The purchaser’s solicitor will advise the purchaser on the results of all searches and enquiries and take instructions on any actions that need to be taken before settlement.
- The purchaser’s solicitor will prepare the Transfer, Notice of Sale (eNOS), and requisitions on title and forward them to the vendor’s solicitor. The Transfer is the document that is lodged with NSW Land Registry to transfer title to the purchaser. The requisitions on title are a series of questions for the vendor to answer regarding the property. The vendor’s answers to the requisitions on title become warranties to the purchaser that may be enforced against the vendor.
- The vendor’s solicitor receives the Transfer and requisitions on title from the purchaser’s solicitor and provides advice the vendor and takes instructions from the vendor in relation to the answers to the requisitions on title.
- The vendor signs the Transfer which is generally held by the vendor’s solicitor until settlement.
- The vendor’s solicitor sends the vendor’s answers to the requisitions on title to the purchaser’s solicitor.
- The purchaser’s solicitor will consider the vendors answers to the requisitions on title when they are received from the vendor’s solicitor. If the vendor’s answers to the requisitions on title reveal further questions to be answered the purchaser’s solicitor will advise the purchaser and seek instructions to make further requisitions.
- The vendor’s solicitor will take the vendor’s instructions to reply to any additional requisitions.
- During this time the purchaser’s solicitor will provide the purchaser’s lender with any information about the property that the lender requires to make the loan ready for settlement.
- Throughout this stage both solicitors will usually work with their clients’ lenders to make ready for settlement. The purchaser’s solicitor will work with the purchaser’s lender to ensure that the loan funds will be available at settlement. The vendor’s solicitor will work with the vendor’s lender to ensure that the lender will be able to provide a discharge of mortgage at settlement.
- At some point during this stage of the process the purchaser’s solicitor will arrange for the stamping of the Contract and payment of stamp duty. Most frequently, stamp duty is paid on settlement by the purchaser.
- The purchaser’s solicitor will obtain any certificates required to prepare a settlement adjustment sheet. The certificates required usually include council rates certificate that sets out information about rates and water for the property. In some areas a separate water certificate is required to obtain details of water rates and usage. In the case of strata title property, a certificate setting out details of strata levies is obtained.
- Once the purchaser’s solicitor has obtained the necessary certificate a settlement adjustment sheet is prepared and sent to the vendor’s solicitor for approval. The settlement adjustment sheet sets out the adjustments for items such as council rates, water usage and costs on the discharge of mortgage between the vendor and purchaser.
- If the vendor’s solicitor agrees with the settlement adjustments as calculated by the purchaser’s solicitor then the vendor’s solicitor will send a direction to the purchaser’s solicitor as to how the purchaser should make payment at settlement (direction to pay).
- Normally, the purchase price is divided among several cheques to be handed over at settlement. Those cheques may include a cheque to pay out the mortgage, a cheque for payment of council rates and water, a cheque for the vendor and a cheque to pay the vendor’s solicitor’s fees.
- Once the direction to pay is received by the purchaser’s solicitor a booking will be made with the purchaser’s lender to attend settlement with the cheques required in the direction to pay as well as any other cheques that the purchaser may require, such as a cheque for payment of the stamp duty.
- Arrangements will be made by the solicitors for the vendor and purchaser and their lenders to attend settlement at a specified time and place on the date of settlement.
- The purchaser’s solicitor will advise the purchaser to perform a final inspection of the property before settlement takes place. Ideally, this would be on the morning of settlement.
- Immediately before settlement the purchaser’s solicitor will obtain a final search of the title for the land. The purpose of making a final search is to ensure that there have been no caveats or other dealings registered on the title that will prevent the purchaser from obtaining a good title to the property on settlement.
- If the lenders for both vendor and solicitor are ready for settlement, the purchaser’s solicitor is satisfied with the final search, and the purchaser is satisfied with the final inspection, then the representatives for both purchaser and vendor together with their lenders will attend and carry out the settlement.
The post-settlement stage
Generally, there are few items to be done following settlement. However, some conveyancing transaction have more than others. For example, a cash purchaser who had no lender will be required to lodge the Transfer and any other necessary documents with the NSW Land Registry. Normally, the activities undertaken in this phase include the following:
- The vendor’s solicitor will send the order to the agent/deposit-holder authorising the agent to pay their fees and release the balance of the deposit to the vendor.
- The purchaser’s solicitor attends to registration of the transfer, notice of sale and discharge of mortgage with NSW Land Registry. If the purchaser had a lender, the lender will normally take these steps in addition to registering a new mortgage over the land to secure the money lent to the purchaser.
- The purchaser’s solicitor will send the cheque for any outstanding rates and water usage to the relevant authorities.
- Both the vendor’s solicitor and the purchaser’s solicitor will report to their respective clients.
Wills & Estates
Do I really need a Will?
Dying without a Will is known as “dying intestate”. If you die intestate your estate will be distributed according to the rules of intestacy under the Succession Act 2006 (NSW). How your estate is divided will depend upon the family members that have survived you. Normally, your estate will go to a surviving spouse and children. Complications can arise if you have a de facto spouse. In any event, you will have no control over how your estate is distributed. In rare circumstances your estate could go to the government.
Many people do not have a Will, either because they haven’t gotten around to it, think that they are too young to need one, or maybe they don’t think that they have enough assets to warrant having one. However, even a person who is young and healthy will have assets such as a home and other personal property like money, jewellery, furnishings, and vehicles. Further, any entitlement under the Wills of loved ones could amount to hundreds of thousands of dollars at any given time.
Making a formally valid and effective Will means preparing a Will in accordance with the Succession Act that distributes the whole of your estate. The best way to achieve that is to make an appointment to have us draft a Will for you. Even if you have made your own Will, or used a Will Kit, you should seek legal advice to confirm that it is formally valid and effective and properly distributes your entire estate. If you have completed a Will but it is not formally valid or doesn’t distribute the whole of your estate, it is likely that you will be treated as though you died intestate.
What is a Power of Attorney?
A Power of Attorney is a legal document in which you appoint someone to act on your behalf to manage your assets and financial affairs. The term attorney in this sense does not mean a lawyer or solicitor. The attorney is normally a family member, or a close friend. Appointing an attorney gives that person the legal authority to act on your behalf while you are alive. Since it only operates while you are alive, a Power of Attorney does not affect your Will. Your Will only has effect on your death. A Power of Attorney is as important for life planning as making a Will. Many people prepare a Will but do not give the same consideration to appointing an attorney until it is too late.
A General Power of Attorney is only effective while you have capacity to make decisions for yourself. A General Power of Attorney is often used to appoint an attorney to carry out specific transactions. An Enduring Power of Attorney continues to be effective after you have lost capacity to make decisions for yourself. A Power of Attorney is a valuable and useful document, it allows you to appoint an attorney to act for you in a variety of circumstances such as an extended interstate or overseas trip, or for a time when you are no longer able to manage your own affairs.
What is an Enduring Guardian?
Many people focus on planning ahead for their financial and business affairs by making a Will and an Enduring Power of Attorney but do not consider what will happen if they find themselves unable to make lifestyle and medical decisions due to illness or accident.
You can appoint a guardian to make lifestyle, health and medical decisions for you when you are not capable of doing this for yourself. Your guardian may make decisions such as where you live, what services are provided to you at home and what medical treatment you receive. You can appoint a guardian by having an Appointment of Enduring Guardian prepared. The Appointment of Enduring Guardian only comes into effect if or when you lose capacity and will only be effective during the period of incapacity, therefore, it may never become operational. However, it is a good way to plan for the future, particularly for unforeseen situations.
An Appointment of Enduring Guardian and an Enduring Power of Attorney are complementary documents. They can be made separately or together giving you the choice as to who you want to have the authority to make decisions across all areas of your life, if you are unable to make these decisions for yourself.