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The Conveyancing Process
What is conveyancing and how can our lawyers help?
Conveyancing is the legal process of transferring ownership of property when buying or selling residential or commercial real estate.
Our conveyancing lawyers assist with all legal aspects of the transaction, providing clear, practical advice throughout the process.
General guide to the conveyancing process in Queensland
Set out below is a general guide to the conveyancing process in Queensland when buying or selling residential property.
Property negotiation
Conveyancing is regulated by state legislation, and the process of buying or selling residential property differs across jurisdictions. In Queensland, there are specific requirements designed to protect both sellers and purchasers. Early compliance with these requirements helps ensure that:
- Sellers do not enter into contracts that impose obligations they cannot fulfil or expose them to termination or damages
- Buyers understand the limitations of standard contracts and the risks associated with properties that may have defects
Each stage of a conveyancing transaction requires careful attention to compliance requirements. This is essential to achieve a smooth and timely settlement. If issues arise in relation to the contract terms or conditions, we can advise on your rights and assist in resolving them.
Our conveyancing lawyers can assist throughout the negotiation stage and across the entire conveyancing process, providing clear and practical advice at each step.
Pre-contract advice
When buying or selling residential property, our conveyancing lawyers recommend obtaining pre-contract advice before signing any documents. Pre-contract legal advice allows you to consider:
- What matters should be investigated before deciding to buy or sell
- What obligations must be fulfilled before selling
- What special conditions should be included in the contract to protect your interests
- Timeframes required by lenders and financiers
- Requirements for pest and building inspections
In Queensland, once a contract is signed, both parties are generally bound by its terms. Obtaining pre-contract advice from an experienced property lawyer helps ensure you understand your rights and obligations before entering into a binding agreement. While contracts may appear straightforward, legal advice can identify risks and issues that may not be apparent during initial negotiations.
Pre-contract advice for a buyer
As a buyer, it is important to obtain legal advice before signing a contract. If advice is not obtained beforehand, it should be sought as soon as possible after signing. Agents may include special conditions that limit a buyer’s right to terminate, particularly in relation to building and pest conditions.
Common contract changes
Agents may amend standard conditions to restrict termination rights, for example by limiting termination to structural damage or active termite infestation. This may require a buyer to proceed to settlement even where significant issues are identified.
Contracts may also restrict termination where there are unapproved structures or improvements on the property, and the cost of rectifying these issues can be substantial.
Avoiding issues with early advice
These risks can be reduced by obtaining legal advice before signing the contract. If a contract is signed without advice, the buyer’s options may be limited to exercising rights within the statutory cooling-off period.
For this reason, it is preferable to seek advice as early as possible, ideally before entering into the contract.
Time is of the essence
In Queensland contracts, time is of the essence. This means each party must strictly comply with contractual deadlines. For example, settlement must occur by the specified time on the settlement date.
Failure to comply may allow the other party to terminate the contract or seek to enforce it, including claiming compensation.
Coordinating settlement, particularly where finance arrangements are involved, can be complex. Our conveyancing lawyers can assist in managing this process to help ensure a smooth settlement.
Cooling-off period
Many residential property contracts are subject to a statutory cooling-off period under the Property Occupations Act 2014. Termination during this period may involve a penalty. It is important to obtain legal advice before signing a contract, even where a cooling-off period applies. Not all transactions are covered, and the cooling-off period may be waived or shortened.
Legal advice should be obtained before waiving or shortening the cooling-off period. This is particularly relevant where contracts are entered into at auction, as these generally do not include a cooling-off period.
Inspections
Building and pest inspections
Contracts in Queensland may include conditions requiring buyers to obtain a building and pest inspection by a specified date. It is important to allow sufficient time for these inspections and to engage a qualified inspector.
Reviewing the inspection report
Once the inspection report is received, it should be carefully reviewed to assess the condition of the property. If the results are satisfactory, the buyer’s lawyer must notify the seller’s lawyers by the date specified in the contract.
Addressing defects and report concerns
Even where a report is satisfactory, defects may become apparent after completion. Inspection reports often include disclaimers and limitations that may affect a buyer’s ability to rely on them.
Any concerns identified in the report should be addressed promptly, and recommendations for further investigation should be considered where appropriate.
Options if inspection results are unsatisfactory
Unless the contract provides otherwise, if inspection results are unsatisfactory, the buyer may have the option to terminate the contract or negotiate amended terms with the seller.
Special conditions may restrict a buyer’s termination rights. It is important to understand the effect of these provisions before agreeing to them, as they may require the buyer to proceed with the transaction despite identified defects.
Swimming pool inspections
Where a property includes a swimming pool, a licensed inspector must be engaged to assess compliance with safety requirements. The inspection considers construction standards and applicable safety regulations, including fencing and access requirements. Inspectors must be licensed by the Pool Safety Council.
If the pool complies with the relevant standards, the seller will provide a Form 23 Pool Safety Certificate. If it does not comply, the seller must provide a Notice of No Pool Safety Certificate.
Buyers have rights under the contract, and sellers are subject to specific obligations in relation to pool safety compliance.
Our conveyancing lawyers can advise on contractual rights and obligations relating to swimming pool compliance.
Finance
Where a contract is subject to finance, the buyer must take reasonable steps to obtain finance approval by the finance date. This generally includes submitting an application promptly and actively progressing it.
If the buyer does not take reasonable steps to obtain approval, they may lose the right to rely on the finance condition to terminate the contract. The seller may also request evidence of the buyer’s efforts to obtain finance.
The seller must receive written notice by 5 pm on the finance date confirming whether finance is approved, waived or not approved. If notice is not given, the contract may continue on foot.
Both parties may retain rights to terminate the contract depending on the terms of the finance condition and whether it is waived.
Searches
A range of searches may be undertaken before buying or selling property. Our conveyancing lawyers recommend that appropriate searches are completed before entering into a contract.
For sellers, searches can help identify potential issues before committing to contractual obligations, reducing the risk of complications later in the transaction.
For buyers, searches are critical and may reveal issues affecting the property that could give rise to rights of termination or compensation if identified before settlement. Examples include:
- Unregistered easements affecting the use or development of the property
- Potential requirements from authorities, such as road widening proposals
- Outstanding notices requiring the removal of unauthorised structures or improvements
- Amounts owing in respect of the property, including body corporate levies, rates and land tax
Our conveyancing lawyers can advise on appropriate searches for a particular property and explain their relevance. Costs will depend on the searches selected.
Pre-settlement inspection
Under most standard contracts, the buyer is entitled to conduct a pre-settlement inspection of the property. This inspection allows the buyer to confirm the condition of the property and check that agreed inclusions are present.
If the inspection identifies any issues, we can advise on your contractual rights and obligations before settlement.
Adjustments and preparation for settlement
The contract price may be subject to adjustments. Typically, the seller is responsible for outgoings up to the settlement date, with the buyer responsible thereafter. These adjustments may include rates, land tax and body corporate levies, apportioned between the parties.
We also coordinate settlement with the seller’s mortgagee and the buyer’s financier, where applicable. Each party must complete their respective certification and approval processes before settlement can proceed.
Delays in these processes can affect the settlement timetable. Failure to settle on time may result in contractual consequences, including termination or financial penalties.
Settlement
At settlement, the following steps will usually occur:
- The seller’s financier provides a discharge of any mortgage in exchange for payment of the outstanding loan
- The seller provides a transfer of the property to the buyer
- The purchase price is paid by the buyer and/or the buyer’s financier
- The buyer’s financier lodges the transfer, any discharge of mortgage and its own mortgage for registration
If settlement does not occur on the scheduled date, a party may be in breach of the contract. This may result in termination of the contract or claims for damages or specific performance.
Given these risks, it is important that both buyers and sellers obtain legal advice from experienced conveyancing lawyers who understand not only the process but also the contractual obligations involved.
New GST remittance rules affecting property sales
On 29 March 2018, the Government introduced changes to strengthen compliance with GST obligations in property transactions. These changes affect property settlements and form part of a revised GST framework.
From 1 July 2018, purchasers of newly constructed residential properties and potential residential land, including new subdivisions, are generally required to withhold an amount for GST and remit it directly to the Australian Taxation Office.
Why the changes
The updated regime shifts the obligation to remit GST from developers to purchasers at settlement. This change is intended to reduce the risk of GST not being remitted to the Australian Taxation Office.
It also addresses concerns about developers claiming input tax credits while failing to properly account for GST on taxable sales of residential property.
What is the rate of withholding?
The withholding rate depends on whether the margin scheme applies to the transaction. If the margin scheme does not apply, the rate is 1/11th of the GST-inclusive purchase price specified in the contract.
If the margin scheme applies, the withholding rate is currently 7% of the GST-inclusive purchase price. The legislation allows this rate to be adjusted, subject to a maximum of 9%.
Withholding obligations for purchasers
Purchasers of new residential premises and potential residential land, including subdivisions and house and land packages, are generally required to pay the withholding amount directly to the Australian Taxation Office at settlement. In some cases, payment may be made by providing a cheque to the developer payable to the Australian Taxation Office at settlement.
The withholding amount is calculated independently of the supplier’s actual GST liability for the transaction.
The purchaser must remit the withholding amount to the Australian Taxation Office on or before the date when consideration, excluding the deposit, is first provided. In most cases, this will be the settlement date. Where the price is paid by instalments, the withholding amount is generally payable on or before the date of the first instalment of the balance purchase price.
If there is a difference between the withheld amount and the actual GST liability, the supplier must seek a refund of any excess from the Australian Taxation Office.
Notification obligations for developers
Under the GST withholding regime, developers must provide written notice to the purchaser at least 14 days before settlement. The notice must state whether the property is new residential premises or potential residential land and include the supplier’s ABN.
If the notice incorrectly states that withholding is not required, the purchaser may rely on that notice to avoid administrative penalties for failing to withhold.
A failure to provide the required notice may result in penalties, currently 100 penalty units for individuals and 500 penalty units for companies.
The notice requirement applies to the sale of all residential property, not only new residential premises or potential residential land.
When does the new regime take effect?
The regime applies to contracts entered into on or after 1 July 2018. It may also apply to earlier contracts where settlement occurs on or after 1 July 2020.
The effect on developers
The GST withholding regime may create cash flow impacts for developers, as they no longer receive the GST component of the purchase price at settlement.
Contact our conveyancing lawyers on the Gold Coast
For advice on buying or selling property, contact our conveyancing team on 07 5574 0623 or sallyc@qbmlaw.com.au. Early involvement can assist in ensuring a smooth transaction through to settlement.
Conveyancing Areas Of Practice
Preparation of contract when selling residential property
When selling residential property, the real estate agent engaged to market the property will often prepare the contract of sale. The contract terms should accurately reflect what has been agreed between the parties.
Disclosure of property interests
When preparing the contract, it is important to disclose any encumbrances, covenants, tenancies, environmental issues or owner-builder works affecting the property. This information should be provided to the agent for inclusion in the contract. Any chattels or improvements to be retained by the seller should also be clearly identified.
Compliance with disclosure laws
Disclosure obligations are governed by legislation and apply to the documents provided to the buyer when entering into a contract. If required information is not included, the buyer may have a right to terminate the contract prior to settlement. For example, certain local laws may affect compliance requirements.
Ensuring seller protection
Our conveyancing lawyers work with you and the agent to protect your interests and ensure all required disclosures are properly addressed in the contract
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From pre-contract advice to settlement, QBM Lawyers guides you through every stage of the conveyancing process to protect your interests and avoid costly mistakes.
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Frequently Asked Questions
The conveyancing process involves transferring ownership of property from seller to buyer. It includes contract preparation or review, satisfaction of conditions (such as finance and inspections), searches, and settlement.
It is best to obtain legal advice before signing a contract. Early advice helps identify risks, ensure appropriate conditions are included, and avoid issues that may limit your rights later.
Once a contract is signed, both parties are generally bound by its terms. The process then involves satisfying conditions such as finance approval and inspections, completing searches, and preparing for settlement.
The cooling-off period allows a buyer to terminate a residential contract within a specified timeframe, usually for a penalty. Not all contracts include a cooling-off period, and it may be waived or shortened.
Searches may include checks for easements, outstanding rates, planning issues, and other matters affecting the property. These searches help identify risks before settlement.
At settlement, the balance of the purchase price is paid, the transfer documents are lodged, and ownership of the property passes to the buyer. Any existing mortgage is discharged, and new finance arrangements are finalised.
Frequently Asked Questions
The conveyancing process involves transferring ownership of property from seller to buyer. It includes contract preparation or review, satisfaction of conditions (such as finance and inspections), searches, and settlement.
It is best to obtain legal advice before signing a contract. Early advice helps identify risks, ensure appropriate conditions are included, and avoid issues that may limit your rights later.
Once a contract is signed, both parties are generally bound by its terms. The process then involves satisfying conditions such as finance approval and inspections, completing searches, and preparing for settlement.
The cooling-off period allows a buyer to terminate a residential contract within a specified timeframe, usually for a penalty. Not all contracts include a cooling-off period, and it may be waived or shortened.
Searches may include checks for easements, outstanding rates, planning issues, and other matters affecting the property. These searches help identify risks before settlement.
At settlement, the balance of the purchase price is paid, the transfer documents are lodged, and ownership of the property passes to the buyer. Any existing mortgage is discharged, and new finance arrangements are finalised.
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©2024 QBM Lawyers. All Rights Reserved
©2024 QBM Lawyers. All Rights Reserved
For over 40 years, QBM Lawyers has delivered effective legal solutions for clients across the Gold Coast.
We understand our clients’ goals, recognise the challenges they face, and provide clear, practical advice to support their commercial objectives.
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- PO Box 6344, Gold Coast Mail Centre, Bundall QLD 9726
- Level 5, Evandale Place, 142 Bundall Road, Bundall, QLD, Australia
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- Building and Construction Litigation
- Gold Coast Building Lawyers
- Excluded Individual/Licence Cancellation
Liability limited by a scheme approved under Professional Standards Legislation.
©2024 QBM Lawyers. All Rights Reserved
- Building and Construction Litigation
- Gold Coast Building Lawyers
- Excluded Individual/Licence Cancellation
Liability limited by a scheme approved under Professional Standards Legislation.
©2024 QBM Lawyers. All Rights Reserved