Conveyancing is the process of transferring legal title between two different parties. The phrase also refers to the granting of a mortgage or lien that covers real property.
Conveyancing Definition
Verb
The transfer of legal ownership of reap property from one party to another.
Conveyancing Generally
The formal process of conveyancing was designed to protect the buyer. It insures the buyer is on notice of any restrictions that come with the land purpose and allows them to secure the chain of title to the property. Most jurisdictions also require the registration of land sales. This system allows buyers to rely on public records when doing their due diligence regarding the property title.
The process of conveyancing varies between countries and jurisdictions. However, it typically consists of two phases:
- Exchanging Contracts
- Closing
Each land transfer is governed by the laws of the jurisdiction that holds the real property. One thing every jurisdiction has in common is the requirement that a land sale is formalized in writing. However, the manner in which the contracts are finalized can vary greatly from one country to another.
United States
In the U.S., each state has its own laws regarding conveyancing of real property. The process of finalizing the real property contracts is known as “closing.” While the closing process is often handled remotely in other countries, in America many closings are done in paper. At closing, paperwork is signed and exchanged, and the process end with the seller handing the keys over to the buyer.
In order to protect against title issues, Americans commonly purchase title insurance title insurance. Even so, insurance merely compensates a buyer but cannot clear up any defect in the title. The length of the closing process varies. Often, closing is set at 90 days. However, the process is flexible depending on the needs of the parties.
Australia
Conveyancing is frequently referred to in Australia as a transfer. Regardless of the nomenclature, the conveyancing process usually involves a solicitor or licensed conveyancer. Australian law allows for buyers to handle the process on their own, but it is generally discouraged due to the complexity.
Most provinces have a “cooling off” period during the purchase of residential property. During this cooling off period, a buyer is entitled to cancel the contract after the agreements have been signed. The cooling off period is five days in Queensland and New South Wales, while South Australia only allows for two days. Most provinces require a small percentage of the purchase price to be paid to the seller to compensate them for their wasgted time.
On average, the conveyance process can take between 4 and 6 weeks. Typically, the cost of using a conveyancer in Australia depends on the value of the property but includes the cost for title searches.
England and Wales
The conveyancing definition in England and Wales is similar to Australia. Like Australia, the process is usually handled by a solicitor or licensed conveyancer. Given the lengthy property records history, self-help conveyancing in England can be extremely time-consuming. The costs are typically not prohibitive given the large number of available conveyancers.
In England and Wales, the contracts are not final when signed. Instead, the contracts must be exchanged before they are legally binding. This is a double edged sword, as both parties have the option to back out of necessary. However, it also leaves both parties in a vulnerable state that could lead to a great deal of wasted time.
Conveyancing in England and Wales typically takes much longer than in Australia. On average, the process can last between 10 and 12 weeks.
