At One80 Conveyancing, we understand that our client’s may not be familiar with some common terms used in the conveyancing process. To help you better understand what some of the common conveyancing terms mean, we’ve put together this glossary for you.
A
Adjustments:
Refers to the process of ‘splitting’ the outgoings for a property between the seller and the buyer so that a seller and buyer only pay for the outgoings for the time they were in possession of the property.
C
Caveat:
Caveat is Latin for “beware”. A caveat is a warning that someone other than the owner claims a right over or an interest in the property.
Certificate of Title:
Also known as a title deed. A certificate of title is a public document that shows the legal ownership of land/property, including any interests and restrictions on the land. These days, certificates are maintained in electronic form.
Chattel:
Is personal property that is easily moveable. Examples of chattels include fridges and washing machines.
Contract of Sale:
Is a legally binding agreement between a seller and buyer where the seller agrees to sell specific property to the buyer for an agreed sum of money on certain terms and conditions.
Cooling off Period:
In Queensland, the cooling off period is five business days. It commences from the business day the contracts are exchanged and ends at 5pm on the fifth business day. During the cooling off period, the buyer may elect to terminate the contract (without reason). A penalty of 0.25% of the purchase price applies on termination.
Covenant
Is a condition tied to the land that restricts or imposing conditions on the use of the land.
D
Deposit:
A sum of money that the buyer needs to pay to the deposit holder. The deposit holder is usually the real estate agent. The amount of the deposit is off sett against the purchase price.
Disbursements:
A sum of money (other than professional fees) that is paid on your behalf by your conveyancer to third parties. An example of a disbursement is the cost of title searches.
E
Easement:
Is registered on the certificate of title. It is an interest attached to land that gives a third party the right to use a specified part of the land for a specified purpose. An example of an easement is a right of way over a shared driveway.
Exchange of Contracts:
Exchange of contracts occurs when both the seller and the buyer have signed the contract and the contract swaps hands. When exchange of contract takes place, a legally binding agreement is formed between the seller and the buyer. Sometimes a contract may specify that certain conditions (such as payment of deposit) is required before exchange of contracts occurs.
Encumbrance:
Is an interest held over land by a person other than the owner of the land. In Queensland, you can have both a registered and unregistered encumbrance.
F
Final Inspection:
Refers to a buyer’s contractual right to conduct a final inspection of the property prior to settlement.
J
Joint Tenants:
Is a type of shared ownership of property. Each owner has an undivided interest in the property. Joint tenancy creates a right of survivorship. This means that when one owner dies, the interests of the deceased joint tenant automatically passes to the surviving joint tenant. It is common for married couples to own property as joint tenants.
M
Mortgage:
If a lender loans you money to purchase a property, the lender will register a mortgage over your property. A mortgage is a legal instrument which is used to create a security interest in real property held by a lender as security for a debt.
Mortgagor:
The person to whom the loan is made to buy the property.
Mortgagee:
The person or entity that provides the loan, usually a bank.
T
Tenants in Common:
Refers to ownership over a certain share of the property, for example, 50%. Tenants in common are co-owners of the property. There is no right of survivorship.
Transfer Duty:
Is a State tax that is levied on the purchase of a property. It is paid by the buyer.
P
Pre-approval:
Is the next best thing to an actual loan. A pre-approval means that the lender has agreed, in principle, to lend you money for the purchase of a property.
S
Settlement:
Settlement occurs when the balance of the purchase price is paid to the seller in return for title documents (allowing for the legal title in the property passes from the seller to the buyer) and keys.
Special Conditions:
These are clauses that are added to a contract to vary standard terms or introduce new terms.
If you have any questions about this article or wish to discuss its contents, please call 1300 080 569 or email [email protected]
Irfan Ebrahim
27/01/2022
DISCLAIMER: This article is provided for general information purposes only. Its content is current at the date of preparation. Changes in circumstances or policy or legislation after the time of preparation may impact the accuracy of the information provided. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice from a qualified professional based on your specific circumstances before taking any action concerning the matters discussed in this guide. One80 Conveyancing Pty Ltd will not accept liability for any reliance on this article, including but not limited to, the accuracy, currency or completeness of any information or links.
