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4 conveyancing risks and how to manage them

So you’re about to settle on a new house or property. What types of conveyancing risks can arise throughout the settlement process, and more importantly – what can you do to minimise and manage these risks? Read on for a quick and helpful guide, whether you’re a seasoned property owner or a first home buyer.

What are the responsibilities of a conveyancer?

A professional conveyancer is qualified to draw up the legal documentation that is required for any real estate transaction in Australia. If you’re selling a property, your conveyancer may be preparing the Contract of Sale for the transaction. If you’re buying property, your conveyancer can help you to understand and also negotiate on the terms of sale. Given that you’ll ultimately be responsible for any debt or negative interest that applies to the property as the new owner, a professional conveyancer can also help you to conduct due diligence on costs and conditions involved in the settlement.

Do I need a conveyancer or can I do it myself?

In some states you will need to use a conveyancer to settle on a property, while in others it may not be mandatory. However, handling the documentation and settlement of your property can be a highly complex process. Using a qualified and experienced conveyancing professional can help to protect your rights as the property owner and minimise the risks of fines, breaches of contract and extra costs.

What types of risks can arise with conveyancing? 

While not overly common, there are several conveyancing risks that could cause significant dramas and costs if they do occur:
1. The conveyancer failing to take into account outstanding rates, land tax or strata levies, either by their own actions or if incorrectly informed by the appropriate authority. Title insurance can help to cover this risk.
2.    Important clauses being left out of a Contract of Sale, which could have lasting repercussions for the property owner.
3.    Human error such as poor version control or missing disbursements, which may be more likely through manual settlement than e-conveyancing.
4.    Cases of conveyancing fraud or mortgage fraud, often occurring through electronic channels such as emails. While these platforms have increased their security lately, it’s certainly worth being diligent.

How can someone manage or mitigate conveyancing risks?

There are some simple and effective ways to minimise the chance of these conveyancing risks affecting you as you purchase a property:
•    Doing your research when choosing a conveyancer. Do they have good reviews? Have other people had an easy and reliable experience with this provider?
•    Asking a new conveyancer about their processes and practice. For example, using modern software can be an important aspect of risk management strategies for conveyancing practitioners, as this can reduce human error.
•    Consider title insurance to cover against a wide range of conveyancing risks and other property ownership risks. For example, in a successful claim you could be covered if rates, land tax or strata levies were incorrectly calculated by your conveyancer.
•    Providing all of the information to your conveyancer as they need it and maintaining clear and timely communication, which is likely to support effective risk management for conveyancers.

You can be confident that in the overwhelming majority of cases, property settlement is a relatively straightforward and accurate process. Where it’s not, the strategies above can help to minimise fallout.

Title insurance can provide cost-effective peace of mind for your property purchase. Gain a quick quote, or request cover today for your upcoming property purchase.