Like any profession, there are particular terms and phrases that are commonly used. It’s the same in the conveyancing industry – and we realise it can be confusing.
Typically, the only time you’ll need to get your head around industry terms in conveyancing is when you’re reading a property contract settlement. (But it’s not the time you’ll want to be second guessing). When you’re signing on the dotted line for the purchase or sale of a property that could be worth $1 million or more, you’ll want a clear understanding of what it is you’re signing.
To complicate matters, every country, state and territory is a bit different with legal definitions around contract law. That’s why it’s dangerous to simply google search legal and property title terms on your phone or laptop – there’s a risk you may not be getting accurate information.
Of course, when you’re a client of ours, we don’t expect you to be experts in property settlement contracts. (That’s our job and we love it). In fact, we’ve successfully managed thousands of contracts over the years. As we say to all our clients, if you’re in any doubt about
terms or definitions in your property contract settlement, we’re happy to take you through it so it all makes perfect sense.
In the meantime, we’ve put together a list of some of the commonly used industry terms, and what they mean. (it’s not an exhaustive list, nor is it a substitution for professional advice).
Annexure:
This is something that’s added to an ‘Offer and Acceptance’, usually for the inclusion of a special condition.
Caveat:
A caveat is used to warn prospective buyers that another party has registered some right or interest in the property. Details of a caveat are written on a property’s certificate of title. For example, in the case of a property subdivision, the adjoining block may require trees and shrubs
to be pruned to a maximum height of 2metres to protect the neighbour’s water views.
Conveyancing:
This refers to the process for the transfer of legal ownership of real estate, a service provided by a conveyancer or settlement agent.
Conditions/Special Conditions
Clauses can be added to an offer and acceptance as special conditions. For example, the need for repairs to be made to the property prior to the settlement date. Special conditions need to be in writing and initialled by both parties to the transaction to indicate agreement.
Chattels
Chattels refers to items in a property that can be moved and that are considered as not being part of the structure. This includes curtains, blinds, rugs and mats.
Cooling-off period In WA there is no cooling off Period
The length of time given to a prospective buyer to consider their impending property purchase. The length of time varies between the states and territories across Australia. Unlike other Australian states, WA law does not provide a statutory cooling-off period for property contracts. Likewise, there is no cooling-off period when you buy at auction in WA.
Counter offer
Sellers and buyers can negotiate the final agreed price by making a counter offer and amending the Offer and Acceptance document. Each change on the document needs to be initialled and dated. The counter offer is then presented back to the buyer. The buyer can either accept or reject the seller’s counter offer, or make further changes to it.
Deposit (Holding)
A holding deposit is an amount negotiated by the buyer and seller to demonstrate a commitment to purchase the property. The deposit is generally paid to the seller’s agent, and the agent is required by law to deposit the money into a trust account.
Final Inspection
Typically, a buyer is entitled to complete a final inspection of the property within the five days prior to the settlement date. This is to ensure the property is in the same condition it was when the offer was made, that the seller has complied with any conditions, and to check all items covered by the good working order warranty are working.
Land Registry:
Every state and territory has a government agency in charge of keeping track of land transactions and ownership information. In WA, the land registry is known as Landgate.
Lender’s Mortgage Insurance (LMI)
The premium paid by the purchaser if the loan is more than 80% of the value of the property. This insurance covers the lender if the borrower defaults on the loan.
Loan-to-Value-Ratio (LVR)
The term refers to the value of the loan as a percentage of the value of the property.
Mortgagee:
The bank or lender that is owed money under a mortgage.
Mortgagor:
A borrower who guarantees a loan with their possessions
PEXA:
PEXA is a secure, online platform that enables the digital processing of property transactions in Australia, eliminating physical paperwork and manual processes. In Mandurah, C & R Settlements were the first settlement agency to adopt this system.
Private Sale/Treaty
A Private Sale or Treaty is the most common method of selling property. It has no specified closing date for offers and is generally negotiated between a buyer and a seller with the assistance of an agent.
Restrictive Covenant
This places some type of restriction on the use of the land. For example, the land must be landscaped or buildings to be constructed only of brick.
R-Codes
R-codes refers to the residential housing density codes. This describes the average land area required for construction of a dwelling on a block of land. R-Codes are referred to by developers and local councils when considering redevelopments.
Settlement
It is an agreed date when the balance of the purchase price is paid to the seller. The buyer then receives the keys to the property and becomes the official, legal owner.
Stamp Duty
A compulsory state government charge incurred when buying property.
Under offer
A property is under offer (aka under contract) when an offer has been accepted by the seller. Once an offer is fully executed and signed it becomes a legally binding contract for sale in WA.
Valuation
A valuation is based on recent comparable sales in the area. It is conducted by a qualified valuer for a fee. Valuations are often required when you are borrowing money, sorting out a divorce settlement or finalising a deceased estate.
Vendor:
The seller of the property.
Here at C & R Settlements in Mandurah, we’re renown for our hard work, attention to detail, and going the extra mile for our clients. We’re Mandurah’s Number One independent settlement agent with over 80,000 settlements under our belt (and still going strong).
As an added bonus, when you choose C & R Settlements, you can use our free courtesy truck when it’s time to make the move. All you’ll need is a standard driver’s licence (and perhaps a few strong mates to lend a hand on moving day). Just be aware that our free courtesy truck is very popular, and bookings are essential. Just another reason to make the move to C & R Settlements in Mandurah.
For details, call us on 9581 2148. Or email mandurah@crsetts.com.au