Tips For Managing Property Conveyancing Risks
Are you about to buy a house or block of land? If so, it’s worth thinking about conveyancing risk management.
Depending on where you live in Australia you might be required to work with a conveyancer or solicitor, or you might choose to do so as part of the settlement process.
Property conveyancing deals with the steps required to transfer a property from one owner to another – and handling a lot of the admin. Conveyancing can include:
- Preparing and finessing the contract of sale, including important clauses
- Calculating fees, taxes and rates up to and after the settlement date
- Handling details for payments like stamp duty, transfer fees and other fees
- Checking for any issues with the property that might infringe on council regulations
- Managing the settlement process, and
- Ensuring a compliant transfer of ownership.
In such a highly technical area, mistakes and unexpected surprises can happen. So how can you avoid the potential financial or legal costs of inadequate conveyancing risk management?
Luckily, there are a few simple steps you can take:
Choosing the right conveyancer
Using a reputable conveyancer or solicitor can make a property transaction far smoother. A competent professional should pay attention to the finer details to ensure nothing is missed, and have an eagle eye for discrepancies that could cause problems down the track.
In most of Australia you can find a registered, licensed and certified conveyancer through the Australian Institute of Conveyancers (AIC) in your state or territory.
Solicitors operate nationally with the Law Society in your state a good place to start. For example, in Queensland you can check with the Queensland Law Society and in the ACT you can check with the ACT Law Society.
There can be errors with even the best conveyancer
Even when using a solicitor or qualified conveyancer risk can still be a factor. Simple errors can happen because of time pressures or due to circumstances outside of your conveyancer’s control. Here are some of the other steps you can take for better risk management in conveyancing.
Conducting thorough property research
The more people doing due diligence on a property, the better. When you’re buying property you may wish to personally research key aspects such as:
- Checking with local council about zoning
- Reviewing building and plumbing plans for the property, as well as any survey reports
- Booking in building and pest inspections (and potentially ensuring the contract is conditional upon the results), and
- Environmental searches such as a flood risk assessment.
If you are buying a strata property, consider asking the strata company for the strata plan and strata records to familiarise yourself with any potential risks or liabilities.
Reviewing legal documentation
Your conveyancer should carefully review your contract of sale and other legal documentation on your behalf – but it’s also important to do so yourself. Take some time to carefully review your contract, any extra clauses, title deeds, property surveys and any applicable lease agreements.
If you have questions, get expert advice from your conveyancer or solicitor to assist with clarity and compliance.
Effective communication and documentation
Clear, well-documented communications can help to minimise the risks of things going wrong with the conveyancing process, and provide a paper trail if things do go awry.
There are a few ways that property buyers and conveyancers can maintain clear communication, such as:
- Keeping documentation and records in one platform or channel
- Raising any discrepancies or questions in writing
- Following up any phone calls with an email or letter outlining the discussion, and
- Using secure digital platforms and version control for document exchange.
Taking out title insurance
Taking out title insurance can be one of the simplest conveyancing risk solutions in addition to the steps above. Title insurance can provide financial and legal protection against a range of property ownership risks if you weren’t aware of them at settlement.
You could potentially make a claim in unexpected situations like:
- Building works or renovations that a previous owner carried out without the required council approval
- Boundary issues and structures that weren’t built within the true boundary of your property
- Encroaching structures built on your property without your consent or knowledge
- Planning or zoning laws that stop you from using or living in your property
- Wrongly calculated rates or land taxes, and
- Fraud that results in your land being sold to another owner, or a fraudulent mortgage taken against your land.
Taking out a title insurance policy can give you someone to turn to if any of these things happen once you take ownership of the property. The importance of title insurance can quickly become apparent if you end up on the hook for costly demolition, rebuilding, extra fees or loss through fraud. In fact, many conveyancers will recommend title insurance as a form of conveyancing risk protection.
With clear communication, due diligence and the right insurance cover, you can minimise the chances of fallout from conveyancing errors or surprises.
If you’re looking for conveyancing risk management insurance for your property purchase, you can get a quote or request title insurance cover across Australia with First Title. Contact our team today to get started.
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