Buying a property is one of the biggest financial decisions most people will make. While the excitement of purchasing a new home can be significant, it is important to understand the legal risks involved before signing a contract.
Conveyancing is the legal process of transferring ownership of a property from one person to another. A thorough conveyancing process helps ensure the buyer receives good and marketable title to the property and understands any restrictions, interests or potential issues affecting the property before settlement.
At Somerville Laundry Lomax, our property lawyers assist buyers and sellers throughout the conveyancing process, helping identify potential issues and ensuring your interests are protected.
Why Are Property Searches Important When Buying a House?
Many buyers assume that the seller must disclose everything about a property before it is purchased. However, sellers are not always required to disclose every issue, restriction or future impact affecting the property.
This means the responsibility often falls on the buyer to complete appropriate searches and enquiries before committing to the purchase.
Property searches can help identify matters such as:
- Planning restrictions or future developments affecting the property;
- Heritage listings or environmental restrictions;
- Easements or rights affecting the use of the land;
- Outstanding notices or government requirements;
- Restrictions on how the property can be used or developed.
Completing the right searches before signing or becoming committed to a contract can help you make an informed decision and avoid unexpected problems after settlement.
What Are Encumbrances on a Property Title?
A property title search can reveal whether there are any registered interests or restrictions affecting the property. These are commonly known as encumbrances.
Examples of encumbrances include:
- Mortgages: Any existing mortgage registered on the title must generally be removed before settlement so the buyer receives clear title.
- Easements: These may allow another party, such as a council or utility provider, to use part of the property for services such as electricity, sewerage or drainage.
- Restrictive covenants: These may limit how the property can be used, developed or altered.
Understanding these issues before purchasing a property can prevent costly surprises in the future.
Should You Get a Contract Reviewed Before Buying Property?
Before signing a contract, it is important to have the agreement reviewed by an experienced conveyancing lawyer.
A legal review can help identify:
- Unusual or unfavourable special conditions;
- Issues revealed in property searches;
- Potential risks associated with the property;
- Clauses that may affect your rights as a buyer.
Once a contract has been signed, it may be difficult to negotiate changes. In many cases, additional protections need to be included before exchange.
Common Conveyancing Traps When Buying a Property
Buying Without Completing Appropriate Searches
Failing to complete relevant searches can leave buyers unaware of restrictions, future developments or issues affecting the property.
While title insurance may provide some protection in certain circumstances, it should not replace proper legal advice and appropriate conveyancing searches.
Not Including Special Conditions in the Contract
Special conditions can provide additional protection for buyers where specific issues need to be addressed.
For example, a contract may include conditions relating to:
- A satisfactory building and pest inspection;
- Completion of repairs before settlement;
- Approval of finance;
- Satisfactory review of property searches.
Without appropriate conditions, buyers may have limited options if problems are discovered after signing the contract.
Building and Pest Issues
A building and pest inspection can identify problems that may not be obvious during a property inspection.
Issues such as structural defects, termite damage or significant repair requirements can have a major impact on the value and suitability of a property.
Where issues are identified before exchange, a buyer may be able to negotiate changes to the contract, request repairs or reconsider proceeding with the purchase.
Why Legal Advice Matters Before Signing a Property Contract
Buying a property involves significant financial and legal commitments. Obtaining advice before signing a contract can help you understand your rights, identify risks and avoid costly mistakes.
Our experienced conveyancing lawyers can assist with property purchases, contract reviews, searches and settlement matters.
Get Advice About Your Property Purchase
If you are buying or selling property and need assistance with conveyancing, contact Somerville Laundry Lomax for advice tailored to your circumstances.
You can contact our team through our contact page.
This article provides general information only and is not intended to be legal advice. You should obtain professional advice before entering into a property transaction.