Having a professional conveyancer undertake conveyancing searches is a key part of buying or selling a property. It ensures all of the legal matters are taken care of appropriately and the sales process can occur as smoothly as possible. Conveyancing involves carrying out searches, title transfer, and settlement adjustments, all of which address the legal ownership of the property. The conveyancing searches that are conducted will tell you important details about the property and can affect the final settlement price. After the conveyancing searches have been completed, the settlement adjustment will determine what the seller and buyer need to pay. In this article, we’ll explain common conveyancing searches and settlement adjustments in Queensland.
Title Search
A title search is an essential part of the conveyancing process. The Certificate of Title is a record of land ownership, which includes interests and restrictions on the land. Your conveyancer will conduct a title search to see the Certificate of Title, which will show who owns the land if there is an easement on the property, the covenant on the title, caveats, and any mortgages on the property.
- Landowners – the title lists all landowners, including multiple owners, and what type of ownership (tenants in common or joint tenants)
- Easements – if someone else, who doesn’t own the property, has a right to use it for any reason, this will show up in a land title search
- Covenants – covenants limit what can be built on the land, as well as where it can be built and what materials can be used
- Caveats – a caveat warns that there is someone else with interest in the property
- Mortgages – a title search will show an existing mortgage on the property because the lender will own the Certificate of Title, not the property owner
Land Tax
A land tax search reveals if there is any outstanding land tax on the property. If there is any overdue tax, this could be passed onto the buyer if the current owner doesn’t pay it off before the sale is completed. A land tax search is necessary when the owner of the property owns multiple properties or if you are buying off-plan.
Rate Searches
A council rate search shows how much the rates on the property cost per 3 months or 6 months, as well as whether the seller is up to date with payments. If there is anything outstanding, it will need to be paid by the seller and will be included in the settlement adjustment.
Water Meter Reading
A water meter reading can be used to ensure payment for water usage can be adjusted at settlement too. A meter reading will be taken by a council representative as close to settlement as possible.
Other Conveyancing Searches
While the above searches include ‘non-negotiable’ searches that should be undertaken with every property sale, there are a few other searches that the buyer can opt to take or only apply to specific purchases. For example, if the property has a pool a search can be conducted through the ‘Pool Safety Register’, or if the property is a unit or part of a strata title, a Body Corporate search can be conducted. Other searches can include flood, contaminated land, and building record searches. These types of searches ensure the interests of the buyer are taken care of and in some cases can have cause to terminate the sale if certain conditions aren’t met.
Settlement Adjustment
Settlement adjustments ensure that the costs relating to the property are fairly split between the seller and the buyer. They make sure that both the seller and buyer only pay for costs relating to when they own the property and not when the title is in someone else’s name.
Settlements adjustments can be carried out after the buyer’s conveyancing searches list has been completed. The results of the searches are given to the seller’s representative and they then prepare a settlement statement. The cost for each charge relating to the land is calculated for the settlement period and the total cost is split proportionally between the buyer and seller. This is settled by adjusting the purchase price.
If the seller has paid land charges for the time when the buyer will owe the property, the buyer reimburses the seller by adding the amount to the purchase price. If the buyer has paid land charges for a period when the seller owned the property, the amount will be taken off the property’s purchase price.
Buyers and sellers usually agree to work on the basis that outstanding bills are paid in full on settlement. For this reason, most adjustments are by the buyer in favour of the seller. This doesn’t include land tax if the buyer will be living in the property as it generally doesn’t apply to owner-occupiers.
Settlement adjustments may include rent (if the property is tenanted), rates adjustment, water and sewerage access, and body corporate adjustments (for any levy payments required). Special Water Meter Read may also be conducted by the water provider or local council to determine usage compared to the last search reading. It’s important to note that personal utilities such as energy and internet are not included in settlement adjustments
Whether you are buying a home or selling a home, it is useful to understand what searches are involved and how settlement adjustments work. With many searches available, it can seem a little overwhelming when deciding what to proceed with. Conveyancing fees calculators can help you discover what searches are needed in your region. However, having an experienced conveyancer to take care of it all for you will save you both time and money, they will also help you understand the results. Victor Legal helps to take the stress out of the process and ensure everything is taken care of.
