Conveyancing Table of Contents
In this chapter1. Inquiries (a) Pre-contract Inquiries To prepare the contract the vendor's solicitor requires:- * a title search, including a plan and details of any easements, covenants or other encumbrance on the title. * a certificate under s. 149 from the local council. * a drainage diagram, showing the sewerage connections to the property, also showing most mains or easements in favour of the water or sewerage authority. * a survey and s. 172 if available. The purchaser's solicitor's investigations prior to exchange depends on the nature of the property and what certificates are included in the contract. The primary purpose of making inquiries is to ascertain whether or not the property is subject to any statutory charge, or to affection by a town planning scheme or proclamation restrictive to its user, or by a proposal for its resumption or partial resumption, or to any other affection. In some instances the obtaining of a certificate affords a statutory protection to a purchaser. The purchaser's solicitors investigations prior to exchange of contracts depends on the nature of the property (e.g.. vacant land) and whether the draft contract provides the necessary certificates. One of the purposes of the warranties given by the vendor pursuant to the Conveyancing (Vendor Disclosure & Warranty) Regulation, 1986 is to remove the need to undertake detailed searches prior to exchange. However a vendor is not obliged to disclose to the purchaser patent defects i.e.. defects in the property and structures or buildings which reasonable examination ought to reveal. Matters such as the structural soundness of any buildings, existing defects, deterioration and pest infestation all come within this rule. The purchaser should be aware of this and if he requires inspections and reports by architects, builders, structural engineers or a pest controller, he should obtain these reports before exchange. This may have the effect of delaying exchange. (b) Inquiries and Investigations after Exchange The purchaser's solicitor shortly after exchange makes written inquiries for certificates from several statutory authorities. The main inquiries are:- Urban. * Title search - regarding details of the registered proprietor, title description, encumbrances on the title, bankruptcy and causes, writs and orders. * Local Council - s. 149 certificate as to zoning, any outstanding notices or orders affecting the property. s. 603 certificate regarding payment of rates and charges. * Water, sewerage and drainage authority - regarding rates and charges, sewerage and drainage diagram showing nature and position of connections and mains and outstanding notices, charges, sewerage and drainage diagram showing nature and position of connections and mains and outstanding notices. * Land Tax Office - s. 47 certificate regarding any charge on the property for land tax. * Roads & Traffic Authority - whether any proposal affects the property. * Department of Housing - whether any proposal affects the property. * Electricity Commission - whether any proposal affects the property. * Public Transport Commission - whether any proposal affects the property. * Department of Education - whether any proposal affects the property. * Energy Authority - whether any proposal affects the property. * Health Commission - whether any proposal affects the property. * Heritage Council - whether any conservation orders or proposal affects the property. * Mines Subsidence Board - whether any restriction affects the property. Rural * Rural Lands Protection Board - regarding charges affecting the property. * Lands Department - regarding road permits and rates. * Soil Conservation Service - regarding any restrictions or notices. * Prickly-pear Board - regarding any restrictions or notices. * Department of Mineral Resources - regarding any restrictions or notices. * Western Lands Commission - regarding rates under Wild Dog Destruction Act, 1921. * Water Resources Commission - regarding rates and permits. * Local County Council - regarding rates for noxious weeds, water and electricity supply. * Forestry Commission - proposals to dedicate a forest. * Telecom Australia - any outstanding charges for installation of lines. * District Veterinary Offices - to enquire as to the existence of proclaimed quarantine or protection areas and notices to fence. * Department of Labour & Industry - regarding notices in respect of shearer's quarters. * National Parks & Wildlife - regarding proposals. The above is not an exhaustive list of the enquiries to be made. Additional inquiries may be necessary on occasions. (c) Surveys A survey serves a number of purposes:- * to identify the land in the title with that described in the contract. * to identify the situation of the land with that in the contract. * to disclose whether or not the requirements of Ordinance 70 have been complies with. * to disclose any encroachment by or onto the property. * to disclose whether any building covenant or restriction as to user has been complied with or any easement exists. A survey is costly and the purchaser's solicitor should obtain specific instructions either to have a survey made or dispensed with. On many occasions the incoming mortgagee will require an up to date survey in any case. It is not uncommon for a purchaser's solicitor to obtain a copy of an old survey and have it updated at a reduced cost. A vendor is bound to disclose to a purchaser any defects in the title to the subject land which are within the vendor's knowledge, and if there is a survey in existence he must have knowledge of any defect which it may disclose. Therefore if a survey report is available it is good practice to annex a copy of it to the contract so as to disclose what it contains. Most councils insist on receiving a copy of a survey with an application for a certificates under s. 172 of the Local Government Act, 1993. This is to identify the land and establish distances of eaves and gutters from the boundaries of the property. 2. Notices of Sale Section 603 of the Local Government Act, 1993 requires that both vendor and purchaser give notice to the council of the transfer of land in respect of which rates have been levied, within one month of the date of transfer. The vendor remains liable as the ratepayer until the council receives the notice of sale or transfer. A similar obligation to notify the Valuer-General's Office is imposed by s. 71 of the Valuation of Land Act, 1916. The important information for the council is the details of the new owner and address for the service of rate notices. For the Valuer General the important information is the purchase price and date of the contract for sale. After settlement both the vendor's and the purchaser's solicitors should give notice of transfer to the relevant authorities and formally the usual practice was that each solicitor would sign and post separate notices. Notices should also be forwarded to the County Council responsible for electricity supply, Pastures Protection Board and the Water Resources Commission if necessary. The Land Titles Office has now taken over the responsibility of notifying the relevant authorities and requires a prescribed form of Notice of Sale to be lodged with transfers before they will be registered. It is also important to keep in mind that notices of sale are also required to be given when the ownership of a property changes hands as a result of a death, an inter-family transfer or a family law property settlement. 3. Registration Documents When a new mortgagee lends money to the purchaser the repayment of which is secured by a new mortgage, the practice is to leave it to the new mortgagee's solicitor to attend to registration of the documents. But when a purchaser pays cash for the property and does not obtain a loan secured by mortgage, the duty of lodging documents for registration rests with the purchaser's solicitor. Registration of a dealing with land under the Real Property Act, 1900 is effected by lodging the dealing at the Land Titles Office, together with the relevant certificate of title or grant, unless this has been lodged or produced at the Land Titles Office. Speedy lodgment for registration is important because when a person becomes registered as proprietor of an interest in land he immediately acquires (in the absence of fraud and the exceptions contained in s. 42) an indefeasible title. One copy of a transfer is required on lodgment for registration, but two copies must be presented of mortgages, charges and leases. The registration fee for a transfer is currently $ 50.00. Transfers for land under Crown lands Acts are lodged with the Registrar- General's Office where they are forwarded to the Crown Titles Section of that office for registration. It is the execution of the transfer that affects the assurance, not its registration, though registration is required to record the transaction in the Department of Lands records. For old system title, registration is effected under the provisions of the Registration of Deeds Act, 1899. Priority is accorded to registered deeds according to the time of their registration but registration does not effect the validity of a deed. It is the deed which effects the assurance, not the registration of it. A registration copy of the deed is prepared and verified by oath as a true copy. Both the registration copy and the deed have a form of receipt endorsed on them. When the registration copy and deed are taken to the General Registry of Deeds the receipts are completed. 4. Completion or settlement Settlement in the absence of any other arrangement, should take place at the office where the documents of title are held. When an existing mortgage is to be discharged that office will probably be the office of that mortgagee's solicitor. Where the property is unencumbered that office will probably be the office of the vendor's solicitor. On occasions when the vendor's and purchaser's solicitors are geographically distant settlement may be effected using an agent. Wherever the venue, it will have been previously arranged. At settlement the usual procedure is to deal with documents first and, when these are satisfactory, with money afterwards. Take the case where there is a vendor's mortgage to be discharged or a new mortgage to be given by the purchaser. The vendor's mortgagee's solicitor or representative will produce to the vendor's solicitor:- * the certificate of title or other documents of title. * the mortgage which is to be discharged. * the discharge of that mortgage. * a survey report. * an insurance policy. * section 149 certificate and other search papers. The vendor's solicitor would be concerned to ensure that the discharge of mortgage was in order so that the vendor was released from further liability, that the insurance policy was assigned to the vendor so that it could be cancelled and refund of premium obtained, and that he obtained all documents of title which the purchaser's solicitor would require. When the vendor's solicitor had satisfied himself that all documents were in order, he would pass them to the purchaser's solicitor. The purchaser's solicitor would then check these documents to ensure that, with the assurance, his client would obtain a good title to the subject property. The vendor's solicitor would also hand to the purchaser's solicitor the duly executed instrument of assurance, which the purchaser's solicitor would check for due execution and attestation. When the purchaser's solicitor was satisfied with all documents received from the vendor's solicitor, he would pass these on to the new mortgagee's solicitor, who would probably already have the duly executed mortgage documents, survey report, s. 149 certificate, new insurance policy and other documents which he required. Commonly the mortgagee's solicitors have already been furnished with the originals of the purchaser's searches. When the new mortgagee's solicitor had checked the documents given to him, and was satisfied, he would hand to the purchaser's solicitor the bank cheque which he had been authorised to draw. The purchaser's solicitor would examine the bank cheque to ensure that it complied with the authority given, and would pas it on to the vendor's solicitor together with any additional bank cheque which had to be furnished as shown on the settlement statement. The vendor's solicitor would then pass on to the discharging mortgagee's solicitor a cheque or cheques sufficient to discharge that mortgage, and would retain the cheque or cheques for any balance. The purchaser's solicitor would then usually obtain from the vendor's solicitor the keys to the property, and often a form of application for cancellation or removal of telephone service signed by the vendor. If there were any outstanding rates the incoming mortgagee would normally require that they be fully paid on settlement. The purchaser's solicitor would also hand to the vendor's solicitor the authority to the agent to account for the deposit. In view of the need to check all documents received before paying over moneys, it must be emphasised that a purchaser's solicitor should never settle by post or through the Document Exchange, even though on rare occasions, exchange of contracts may be effected through either of these mediums.
