Conveyancing Terms and Property Jargon

Noted here are some commonly used terms in the conveyancing process

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Body Corporate

The collective ownership of the common areas in a block of apartments or multi-dwelling complex. It is responsible for the administration and upkeep of the areas shared by all owners.

Caveat

A note on a title than an interest in the land or property is claimed by a third party.

A caveat prevents the Registrar Of Titles from registering another interest against the title without first giving notice to the person who lodged the caveat. Generally speaking, once a caveat has been lodged against a property, nothing else can be lodged against the property without the consent of the person who lodged the caveat.

The Registrar of Titles will notify the caveator of any dealing lodged for registration where the dealing:

- does not satisfy the interest of thecaveator;

- is not allowed for in the caveat; or

- is excepted under Section 90(1) of the Transfer of Land Act 1958.

The caveator then has 30 days to either:

- consent to registration of the dealing; or

- legally restrain the Registrar of Titles from registering the dealing.

Who can lodge a caveat?

When a purchaser signs a contract to purchase real estate, the purchaser acquires what is known as a "caveatable interest". This means that the purchaser is entitled to register a caveat to protect that interest.

People who can lodge caveats

• A creditor who wants to prevent the vendor from disposing of the property. A creditor may have a written agreement with the vendor by which the creditor is permitted to lodge a caveat to secure a loan. Alternatively, the creditor may have a court order allowing for the lodging of a caveat.
• Someone who has signed a contract to buy the same property. This often happens by mistake, where two estate agents sell the same property to different purchasers. The first to lodge a caveat will have priority as purchaser, while the other may only have a right to compensation for the inconvenience.
• Other rights. There are numerous other rights that may give rise to a "caveatable interest".

Only a person who has a caveatable interest is entitled to lodge a caveat.

A lawyer will first ascertain whether a caveatable interest actually exists, whether there are any contractual prohibitions on the lodging of a caveat, and whether further registrations to be made on the caveator's behalf may be affected (a carelessly lodged caveat could prevent a purchaser's own Transfer of Land from being registered or cause a lender to refuse to provide funds on settlement day).

Certificate of Occupancy

As the name implies, the Certificate of Occupancy certifies that a home can be lived in. It is a requirement of most local government or shire councils that an occupancy certificate be issued prior to the purchaser of a home taking occupation.

The Certificate of Occupancy contains information required by the local government, so it can arrange or review inspections of building work as completed, and to provide health and other services such as waste collection.

It is usually the owner's responsibility to obtain the certificate, however in Victoria this certificate is required by the builder before demanding final payment.

Ordinarily, the building contract is completed, and final payment due, when the building work is done (apart from maintenance matters or any minor defects), and this stage may be reached even if no Certificate of Occupancy has yet been issued. If a Certificate of Occupancy is later refused because of defective building work, the builder is required to return to the site and remedy this work. Home Owner Warranty insurance will normally apply.

Certificate of Title

Document which shows the location of the property, the size of the land, who owns the property and whether there are any limitations on the title such as mortgages, easements or encumbrances

Consideration

The price paid by the buyer for the purchase of the real estate.

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Cooling off period

The legal right of a buyer to withdraw from a contract within a set time frame without penalty, subject to certain conditions.

Contract Note

A document given to a prospective buyer who is making an offer. It is legally binding when signed by both parties.

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Contract of Sale

A legal document prepared by the seller that outlines the details of the sale. It is legally binding when signed by both parties.

Covenant

An agreement that creates an obligation on the titleholder of a property to refrain from doing something. Eg. build above a certain height.

Conveyance

A deed which transfers legal ownership of a property from the seller to the buyer.

Easement

A right to use the property of another person for a specific purpose. Most commonly used for access to utility or sewer lines.

Disbursements

Disbursements are the out-of-pocket costs associated with a matter, as opposed to the legal costs charged for the service being provided. For example, in a conveyancing matter the legal costs include the preparation of legal documents and the processing of documents associated with the transfer of ownership. Disbursements may among other things include the amount paid to the Land Titles Office for the title search, and amounts paid to rating authorities for rate and planning certificates etc.

Encroachment

The use of or intrusion onto another person's property. Eg. Fence

Encumbrance

Any obstruction or obstacle related to the use of transfer of land. eg. easements, mortgages, caveats.

First Refusal (right of)

The right granted to a person to have the first privilege to buy or lease real estate, or the right to meet any other offer made.

Exchange

A formal legal process that creates a binding contract for the sale of property. The vendor and the purchaser each sign a copy of the sale contract and then exchange these documents.

Gazumping

Where the vendor agrees to sell a property, but then sells it to another party on more favourable terms.

Hammer Price

Purchase price paid when land or property is sold at auction.

Ingress

The entry point to a property.

Mortgage

Written contract giving the lender of finance certain rights over a specific property. It is a legal document in which the property is pledged as a security for repayment of money borrowed.

Private Treaty

A sale negotiated directly between parties or their agents.

Rescind

To terminate a contract of sale.

Settlement

The date on which the title is transferred to the purchaser and the resulting financial adjustments and payments are made.

Survey

Measurement and depiction on paper of the boundaries and the location of the improvements on the land.

Valuation

An estimate of the value of a property at a point in time.

Zoning

Permissible use of an area of land as stipulate by the local council.

Source (some contents): Lawyers Real Estate

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