Do it yourself conveyancing / legals Queensland
I recently purchaced a property, doing my own conveyancing.
The process is pretty straight forward, and I recommend that
anyone with a bit of commonsense to do it.
Even if you do use a lawyer, then you need to take an interest in the
process. They only make the most basic checks, and there
could be major problems with the property that you will not be made
aware of until it is too late.
I purchased a kit for $99.50, which I found to be woffly and rather
useless, missing key points. So I decided to write up some
notes here to help people.
I am not a lawyer -- no lawyer would be stupid enough to
waste their time writing up a document like this for free! So
this is not legal advice. If it all goes wrong you could
loose everything. But it is probably less likely than
if you would be struck by lightening.
Most of the time the process is smooth and easy. But if there is the slightest issue then seek qualified help, obviously.
Any errors or suggestions in this document to Anthony@Berglas.org. But I do not provide advice on conveyancing.
The basic process
- You append additional conditions to the standard REIQ
contract. Few lawyers will warn you do do this, but the
"standard" contract is far from fair, even after the government forced
the REIQ to address its worst provisions.
- A price is negotiated, sign the contract. Many
agents will exptect the buyer to make a formal written committment to
purchase before you even know if the vendor is serious. I do
not believe that this is really in the seller's interest, but it is
what is done.
- Seller pays a deposit. This should not be more
than about 2%. There is no advantage to the buyer or seller
for a huge deposit, but there is to the real estate agent who gets to
keep it if there is a default. (The agent gets it, not the
seller.) It must not be more than 10% or the sale becomes an
"installment" sale with special rules.
- Buyer does lots of searches to check if the property is OK.
Most important search is to talk to the neighbours.
- Buyer arranges finance. Tells vendor when OK.
Maybe pays additional deposit.
- Buyer sends a "Settlement Notice" to the titles office.
This locks the title for a month or two.
- Buyer fills out transfer and stamp duty forms, gives them
to vendor. Adjustments to price for rates etc. are calculated.
- At settlement, buyer's bank pays stamp duty to vendor's
solicitor, other cheques as directed by the vendor. Vendor's bank gives
buyer's bank signed, stamped transfer plus release of mortgage.
Buyer and seller themsleves do nothing, but usually need to
be there to witness the proceedings.
- Happy days.
The REIQ contract is not sacrosanct. It was written by the
real estate institute for the benefit of real estate agents.
If you need to write additional clauses for your circumstance, then the
important thing is to think it through carefully, what may go wrong,
and then use however many words it takes to write up the issue clearly.
Do not feel restricted by the space on the standard contract, add
extra pages if necessary. For example, never write something like
"Subject to internet." Instead "The buyer may terminate this
contract within 14 days if they are unable to ascertain that wired
broadband internet will be available at least 5 megabits per
These are some conditions I would reccommend for the buyer:-
Notwithstanding earlier conditions in the contract the parties agree:-Individuals
can no longer pay stamp/transfer duties directly to the govenment in
practice, and some vendor's solicitors have been known to charge a fat
fee for collecting it on the government's behalf. If the vendor
also does not have a solicitor you will need to engage one just to
process the stamp duty(!)
- The vendor's representative shall accept and process the buyer's stamp duties at no additional cost to the buyer.
the unlikely event that the purchaser cannot settle on time then the
vendor shall be compensated by 20% divided by 365 interest on the
amount outstanding for each day late. This is also payable if the
vendor chooses to terminate the contract for this reason which can only
be done if settlement is more than 14 days late.
- If the buyer
defaults on the contract then the seller may retain the deposit
but may not claim any additional damages. Seller shall give
buyer two business days notice to correct any default and the buyer
shall not be in default if they correct the issue within that period.
the buyer is not satisfied with the result of their due dilligence
enquiries then they may terminate this contract within fourteen days,
with all deposits refunded.
- The property is at the sellers risk until settlement.
Read clause 9 of the REIQ contract.
It says that if the slightest thing goes wrong the buyer loses
everything. "Time is of the essence", so be a day late with
something and too bad, so sad. Even if it is the bank's fault.
And the real estate agent keeps most of the deposit.
Fortunately most vendors are not arseholes, and so this rarely
becomes an issue. But if the vendor does not sue when they can,
then the vendor still owes the real estate agent the deposit as double
commission -- that is in the REIQ agreement between the seller and the
agent. My vendor's agent confided in me that he had had such an issue
a few years ago, and the seller made the buyer pay many thousand
dollars extra because the bank was a day late on settlement. The
bank could not be sued. Clauses 2 and 3 is much more reasonable
while still protecting the seller.
Due diligence is
essential. It means you find out all about the property you
intend to buy. And no, it is not reasonable to do all this work
before you have agreed a price with the vendor. The clause
essentially lets the buyer out of the contract for any reason, but so
does the finance clause. If the vendor objects, reduce the time
to seven days and get busy. Or in an emergency use the finance
clause but that is messy. No, the REIQ contract does not protect you., read it.
If the vendor (or more likely their agent) refuses these conditions be wary. If you need to use the finance clause
due to a problem that you discover with the property, then be careful.
Do not be blatent, find some plausible reason why the
finance is not acceptable. E.g. you had not considered what would
happen if interest rates rose. Try to do it within the five day
cooling off period. And seek urgent but sensible legal advice.
an idiot clause in the REIQ contract that the buyer must take out
insurance immediately. Of course the seller never cancells their
insurance, so it ends up doubly insured. Clause 5 fixes that.
the seller I would add some small daily fee to the buyer if they fail
to get finance. They should know, and you want them to tell you
SearchesThe term "searches" normally refers to a
few very formal ones that cost money and give you some sort of
certificate. But the buyer should do broader searches than that.
For example, main roads will give you a certificate saying that
they do not want to resume any of your land. But nothing will be
said about the fact that they will bulldoze the house next door to build a super
The most important search is to talk the neighbours.
Find out about the new super highway or crime that eminates from
the hostle two doors way. Talk to lots of neighbours, on all sides.
next best thing to do is go into council and ask them about the area.
They have lots of maps and can tell you many things, such as
where the sewer lines go.
Here are a few searches that may or may not be relevant.
that with the standard contract there is very little the buyer can do
if more subtle problems are found. Clause 7 is very weak. That is
why a due dilligence clause is needed, and searches need to be done
within that period.
- Building inspection. Get this done early.
and registered plan. This confirms that you are buying what you
think you are buying. I used the RPData site to do the search.
I found the CITEC confirm site almost unusable.
Rates. The buyer may end up paying for them if they are in
arreas. Or simply ask the vendor for a recent rate notice and
save a few dollars. A local authority may also have requisitions
about the property.
- Land Tax. Likewise you do not want to be paying somebody else's tax.
Land -- EPA. If there is any doubt. Strangely vacant blocks
nearby are a warning sign, search them as well, extra fee.
(The EPA will not tell you if you live next door to a toxic waste
- Vendor Bankrupcy. If there is any doubt.
- Water and Sewerage. For rural any issues with dams.
- Vegitation protection orders. Can be State (dept environmnet) or Council, they do not talk to each other.
- Body Corporate. Adjudicators to check no claims, Records Inspection to make sure all is good.
- Main Roads. If near a main road.
- Energex (if they might build on your property)
- Qld Transport/Rail if near a railway line.
- Town Planning
- Building Approvals -- is it approved?
- Formal Survey -- if an older subdivision and boundaries are near
houses. At least get a tape measure and do an informal survey.
(Survey maps can be corrected to match existing fence lines but
it is messy.)
- Flood. Find out what you can.
- Broadband. Check that it really is available. Some inner city
houses do not have broadband for various bad reasons. And the NBN has
prevented any problems being fixed. There is nothing you can do about
no internet except wait for however many years or decades it takes for
the NBN to reach you. No conveyencer will do this for you. Nor will
anyone really be able to tell you.
- Dial before you dig. Call them and they will eventually tell you some of the things that are burried underneath.
FormsCheck that the title is *exactly* the
same as the contract, e.g. with the spelling of the names. For
all following forms use whatever is on the Title, not the contract.
On the title search, if it says that "The certificate of
Title Issued: Yes" then there is a physical title document that is
needed at settlement. This is rare, as most titles have been
"converted" to electronic. Why would you need the paper title
given they have been done away with, you may ask. What mystical
procedure is required to "convert" a title? Don't ask, the titles
office is not about common sense, it is about rules, procedures and
As a buyer, having done a title search, you first
submit a settlement notice to lock the title. Download, and
carefully follow the instructions on the form, take care with spellings
etc. "Title Reference" means the title number, not your
Then the transfer. Fill it out carefully,
instructions provided. It may be rejected if there is the
slightest error, or if, heaven forbid, it has been folded. The
titles office enjoys slapping requisition fees ($40) for the slightest
issue. Property information -- the buyer's address is where rates notices will go, can use a post office box.
Make sure that you know who the vendor is. The
Transfer the buyer receives at settlement just has a signature and
stamp, could be anybody. Ask to see good ID, and get a
photo copy of it. Possibly via their agent or solicitor and
witnessed by that agent or solicitor. This is not normally done,
which would make it very easy to sell somebody else's property!
Just send the titles office a stamped transfer and they process
it without question.
Joint Tennants -- If one of you dies the other
automatically owns the property. Independent from dealing with
the estate. The normal situation for husband/wife main home.
Tennants in Common -- You own shares as specified.
You cannot change this later without paying the government a fat fee, stamp duty.
are all specified in the contract, just read it. Basically the buyer pays per
rata. Very straight forward and not very important as the money
You then arrange settlement with the two banks, normally at the seller's bank.
the property is rented, then the tennants have rights. Basically,
if there is a fixed term contract then you cannot force them out early.
But the buyer gets the rent after settlement.
- Be very careful if GST may be involved. E.g. if was or will be a commercial property. No GST for residential.