What is so special about this day? Do I need to attend? What actually happens there?
Settlement is the meeting of parties of a conveyancing transaction, where the Vendor’s conveyancer hands over the documents to enable the purchaser to become the owner of the property in exchange for the funds agreed to in the contract.
It is the role of the conveyancers to ensure that all parties required at settlement are present and are aware of what is required from them. This includes:
- When the purchaser is borrowing mortgage funds, the purchaser’s mortgagee is present with the funds required for the completion of the purchase;
- When a vendor has a mortgage to discharge, their mortgagee is present with the Certificate of Title they are holding as security and the discharge of mortgage document.
The date of the settlement depends on the wording of the contract. Most contracts specify the date, for example, “1st day of February 2013” or, “Within (14) days after the date on which the last of the conditions set out in the Contract and Schedule has been satisfied”.
Settlements occur at the Lands Titles Office settlement room in Adelaide. The time is arranged by negotiation, but generally they occur between 11.00am and 1.00pm.
- The Vendor’s Conveyancer;
- If the Vendor has any mortgages, court orders or caveats registered over their title, their representative will attend with the discharge documents in return for the required funds;
- The Purchaser’s Conveyancer;
- Any incoming mortgagee, exchanging their loan funds for the property title and transfer documents being supplied to the Purchaser by the Vendor.
Other than the exchange of the above documents, there are also a number of miscellaneous documents that can be handed over or produced at settlement. These documents are usually for the information of the Purchaser. For example:
- Where the property is tenanted, the original lease, inspection sheets and bond transfer form;
- Where GST is payable by the purchaser, a tax invoice would be required for taxation purposes;
- Withdrawal / satisfaction of any Charge where the Vendor is a company.
As soon as settlement is completed, a receipt for the documents is scanned and lodged with the Lands Titles Office to effect the transfer of the title to the new owner. The registration process usually then takes 3 to 6 weeks to complete.
Once the dealing has been registered, the duplicate Certificate of Title will be returned to the party entitled to receive it. If a mortgagee was involved, the Lender receives the title and holds it as security for the life of the mortgage. If there is no mortgagee involved, the conveyancer who lodged the documents with the Lands Titles Office will receive the title, and contact the Purchaser for collection or posting the title by Registered Post.
It is at this point that we contact our client to advise that settlement has been completed. Purchasers are then able to collect the keys from the Real Estate Agent’s office.
For further information please contact Anna on 8362 6400 or email Anna Pantelios. Join our mailing list to receive updates and advice on current issues.