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Buying a property can be an exciting but overwhelming journey, especially when you’re facing a barrage of legal terms and jargon during the conveyancing process. Conveyancing, the legal transfer of property ownership, involves a host of complex terms that can leave home buyers scratching their heads. In this guide, Red Door Conveyancing has compiled a glossary of commonly used legal terms in Conveyancing Victoria and provided simple explanations to help you better understand the process.
Legal Jargon for Homebuyers | Conveyancing Victoria
1. Conveyancer
A conveyancer is a licensed professional who specialises in facilitating the legal transfer of property ownership from one party to another. Conveyancers assist you with various aspects of property transactions, including preparing legal documents, conducting title searches, handling the exchange of contracts, and ensuring that all necessary legal requirements are met during the property transfer process.
2. Contract of Sale
A contract of sale, often referred to as a “sales contract” or “purchase agreement,” is a legally binding document that outlines the terms and conditions of a property sale transaction. It includes details such as the parties involved, the property’s description, the sale price, deposit amount, settlement date, and any special conditions or contingencies that must be met before the sale is finalised.
3. Section 32 Statement
Also known as a “Vendor’s Statement” or “Disclosure Statement,” a Section 32 Statement is a legal document provided by the seller (vendor) to the potential buyer before a property sale. This document contains important information about the property, such as its title details, zoning, planning restrictions, rates, and any known defects or issues. It is intended to provide the buyer with relevant information to make an informed decision about purchasing the property.
4. Caveat
A caveat is a legal notice lodged on a property’s title to indicate that a specific interest or claim exists over the property. It serves as a warning to potential buyers or other interested parties that there is a legal dispute, claim, or interest that affects the property’s ownership or use. For example, a person who believes they have a right to the property might lodge a caveat to protect their interest until the dispute is resolved.
5. Easement
An easement is a legal right that allows one party (the beneficiary) to use a specific portion of another party’s property (the servient tenement) for a specific purpose. Common types of easements include rights of way (allowing access), drainage easements (for water management), and utility easements (for power lines or pipelines). Easements can be created by agreement or through necessity, and they are registered on the property’s title.
6. Encumbrance
Encumbrance in some ways regarded as an umbrella term here, an encumbrance refers to a claim that another party has over a property that is not held by the owner. Typically, this implies some form of debt or obligation that is owed on the property to a third party, the most typical example in this case being a bank’s financial security over a home in the case of a mortgage.
Similar claims to the property in this article constitute forms of encumbrances that lie outside of monetary basis. Easements, for example, would qualify as non-financial encumbrances here, being much more qualitatively dependent on the parties involved, assets being augmented, and the nature of their use.
Red Door Conveyancing | Conveyancing Victoria
If you’re a first time home buyer and still a bit confused and would like to get professional help, get in touch with your local conveyancers, Red Door conveyancing today! We have branches in Melbourne, Berwick, Melton, Sunbury, and Pakenham.
