To put it simply, conveyancing is the legal aspect of transferring property from one party to another. A typical conveyancing transaction contains two stages: the entering into an agreement and completion (whereby legal ownership passes).
If you are considering purchasing or selling a property you should contact your lawyer to discuss what conditions should be included in the Agreement for Sale and Purchase and what your obligations are under the Agreement.
Once all the conditions are met the contract will become unconditional and it’s at this stage that all the ‘behind the scenes’ work starts. Of course there are often other factors that need to be taken into account such as Kiwisaver contributions, trust or company ownership, rental properties and GST issues, all these require additional consideration and your lawyer will discuss these matters with you as they arise, but ultimately all conveyancing follow the same steps.
Once we have received notification from our client that all the conditions have been met we notify the Vendor’s solicitor and real estate agent (if any). It is generally at this point that any deposit payable under the contract is paid to either the real estate agent, or in their absence, the Vendor’s lawyer.
A Notice of Sale is prepared. This lists the main terms of the agreement and the change of ownership and is sent to the Vendor’s lawyer who will forward it onto the local Councils on settlement.
If a bank loan is required the bank sends us loan documents along with its instructions to secure the lending, usually by way of a mortgage and/or guarantees. We go over these documents with the client, have them signed and return them back to the bank with instructions to pay the loan advance to us on settlement.
The office of Land Information New Zealand (LINZ) is where the transfer of ownership of property is recorded. It is effected by way of an edealing which is electronically created jointly with the Vendor’s solicitor. From this edealing an Authority and Instruction form is created and is signed by the client, authorising us to transfer the property to them as the new owner and register a mortgage over the property (if required).
A final statement is prepared. This shows the balance to be paid to the Vendor’s solicitor on settlement and what money is required to fund the purchase.
On settlement we receive the loan advance from the bank and/or any funds paid by the client, the total balance is paid to the Vendor’s solicitor, who in turn will release the transfer of ownership through the edealing system and we then register the change of ownership and mortgage on the title. A copy of this title will be sent to both the client and the bank.
Once we receive notification that the contract is unconditional any deposit payable under the agreement will be paid by the Purchaser. If there is a real estate agent, they will hold the deposit for 10 working days, deduct their commission and pay us the balance. If the deposit does not cover their commission they will send us an invoice for us to pay the shortfall from the sale funds.
Any bank or chargeholder on the title is contacted advising them of the sale and requesting a release of caveat and/or discharge of mortgage and any other security documents for which the property acts as security.
A settlement statement is prepared and sent to the Purchaser’s solicitor. The statement takes in account any deposit paid and apportionments in relation to rates, leases or rental payments. This is the figure the Purchaser to required pay through their solicitor on settlement.
An edealing authority is prepared and signed by the client authorising us to discharge any mortgages and/or any other charges and transfer the title to the new owners.
A final statement is prepared. This shows the purchase funds coming in and any outgoings to be paid on settlement e.g loan repayments, payments of rates, real estate agents commission etc.
On settlement we receive the bank’s loan repayment figure. Once we receive the purchase funds we discharge any mortgage or caveat from the title and release the transfer of ownership to the Purchaser, any loans are repaid along with any other obligations required to be paid by the Vendor. The local Councils are notified of the change of ownership.