Investing in property can be a daunting process. There are many steps that need to be fulfilled legally to make it happen. One of the professionals involved in this process is a Property Solicitor.
We contacted an experienced Property Solicitor, and Principal of Blaak & Huynh Lawyers, Rachelle Huynh. She gave us a great overview about what she does, what’s involved in the conveyancing process, industry challenges – and a few useful tips that can help make the buying process less stressful.
Please give us an overview of your role as a property solicitor.
My role includes a few common jobs:
- Review, advise and/or prepare contract of sale for land or established dwelling
- Review & advise on construction contracts
- Provide advice on litigation arising out of a breach of contract
- Advise and prepare retail leases, commercial leases and residential tenancy agreements.
- Advise on loan agreements for a borrower
- Also act for a Lender therefore I also prepare loan agreements for lenders who take security over a property
- Wills and Probate, in particular transferring a probate estate to a beneficiary
What happens during the conveyancing process when a person buys an investment property?
The Conveyance process is the legal process of transferring legal ownership on title from one person or entity to another.
The process involves:
- Contract of sale
- Preparation of stamp duty forms and land title documents
- Due diligence:
- Done when a contract is unconditional and a call to settlement is made
- Involves property searches to make sure there are no restrictions over the parcel of land (this includes but not limited to council, water and land tax searches)
- Any issues are passed onto the Vendor’s solicitor so they can fix them
- We work with the lender to prepare settlement documents
- We get ready for settlement when the lender is ready to settle
There has been some big changes in your industry recently, like Pexa and GST payments – can you tell us about those?
The main change would be the shift to a paperless system.
Pexa has been the main change these past 12 months. It’s been extra tricky for our firm because we do conveyancing across jurisdictions: some States link Pexa with stamp duty online, while some States still have manual stamp duty.
The GST provision is not as dramatic – it’s only an additional step we must take to ensure developers are paying their GST.
Tells us more about the GST changes: 1/ What are the change? 2/ What do people buying a new property need to know? 3/ How do you take care of it?
People who buy new residential premises or potential residential land need to hold back an amount of the contract price and pay it directly to the ATO. This amount is taken from the Vendor’s settlement proceeds – so it doesn’t financially affect the buyer.
In addition, the amount of GST on the contract of sale will not change.
We ensure the Vendor meets its obligation by letting our office know in writing if they need to pay GST. We will take care of the payment at settlement if it’s needed.
In all instances the GST is the responsibility of the property developer.
The purpose of getting the buyer to take out the GST and pay it is to make sure the developer won’t ‘take the money and run’ once they receive their settlement money.
What challenges are you facing in the conveyancing industry at the moment?
Security issues with online transactions. This has come up because of the fraudulent activities happening with other firms and real estate agents.
We are constantly in touch with our IT consultant to ensure our cyber security is up to date and at the highest level so our emails or system won’t be hacked.
Are there any tips you’d like to share for property investors?
- Use the services of a well-established sales agent. A good company can always get help in a challenging situation – so they will take care of your interests from start to the end.
- Choose a property provided by a reputable builder/developer.
- If buying an investment property, choose a solicitor who is experienced in investment properties – not just regular mum and dad conveyancing.
As you’ve found out, property solicitors play a huge role in making sure a purchase goes through smoothly. There are a few changes in the industry such as the shift to a paperless system and GST changes.
Whoever you use, be sure your property solicitor is up to scratch with these changes – choosing one who has experience in investment properties.
I hope you enjoyed this segment. Please contact me if you have any questions for Rachelle. I’ll pass them onto her.