Conveyancing and Property Law - Why Each Conveyance Is Not The Same

Date: September 27, 2007

Authors: LAC Lawyers

The area of law known as conveyancing is as old and interesting as our legal system itself. In fact so much of our law has its origins in and connections with land and a person's rights associated with land ownership.

Therefore it's a wonder that this area of the law has been trivialized in recent times. Conveyancing, the process of conveying or transferring an interest in land, draws on or involves various areas of the law ranging from land law, contract law, and equity, to tort law, commercial transactions, taxation, and local government and planning law.

Each piece of land is unique. In this respect the courts recognize this by being prepared to make orders which would ordinarily not be made in any other context such as in the sale of goods. 

So too, each conveyance of land is unique and distinct as the land which is being conveyed. With each conveyance human inclinations and vagaries are overlaid, making for a complex recipe. Because each transaction is unique, the adage of 'one size fits all' certainly could not be further from the truth when it comes to conveyancing. 

Here are a few examples of some situations which can be encountered in conveyancing:

  1. The purchase of a vacant block of land from the vendor direct (without any introduction by any estate agent) may seem straightforward enough until the purchaser learns that the vendor is a developer which is in the process of carrying out an extensive subdivision and wants the deposit money released to itself immediately upon exchange of contracts. Do you agree to a release of the deposit? What if the vendor goes broke after the release of the deposit money?
  2. The purchase of an inner city home unit in Sydney at an attractive price at auction may also appear to be a simple transaction, until the purchaser (after bidding successfully at the auction) discovers she has agreed to buy a company title property. With company title properties, you are not buying real estate but rather, a parcel of shares, the ownership of which allows the occupation of a part of the real estate, usually a flat/ home unit. Consequently the whole process of conveying a company title unit is very different from the conveyance of true real estate such as a strata title unit. Additionally many lenders will not lend on the security of company title property, making the process fraught with risk because getting loan finance is more difficult.
  3. Again, the purchase of a suburban house may seem trouble-free until, shortly before completion of the purchase when the purchasers undertake an inspection of the property to check that everything is in order, the purchasers discover a heap of rubbish left on the property. What do the purchasers do in this case? Have the purchasers any recourse?
  4. The sale of a number of new strata title home units together in one parcel can present its own conundrum. Is the sale subject to GST? Is it any different if only half the number of units owned by the vendor are being sold?

These are real-life situations and represent only a fraction of the wide range of different circumstances which can be encountered in conveyancing transactions.

In case no. (1) the purchaser insisted that the deposit be retained by the vendor's solicitor in a trust account. This was just as well as the developer vendor went 'belly up' and the purchaser was able to get back its deposit.

In case no. (2) the purchaser was able to get a loan from a bank which was one that was prepared to lend on the security of company title property and take a mortgage over the shares.

And in case no. (3) the purchasers were able to insist on the removal of the pile of rubbish as the sale was on the basis of vacant possession being given by the vendor. In the end, because the purchasers were reluctant to delay the completion of the transaction, a compromise was reached whereby the vendors allowed a sum of money to be deducted from the final balance of the purchase price to cover the cost of a rubbish skip so the purchasers could attend to the rubbish removal.

Conveyancing in recent times, at least in New South Wales, has not become simpler, but on the contrary, more convoluted. In short what has made it so is the greater complexity of the various aspects of law referred to above which have been introduced to address challenging issues, such as the environment, we face today.

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