April 16, 2024
Conveyancing Searches You Need When You’re Buying Property
If you’re buying property, your conveyancing solicitor will recommend undertaking searches on the property you are purchasing, and will run them on your behalf.
Searches are a critical part of the conveyancing process for home buyers, as they reveal important information about the property, such as whether there are any debts owing, or any third parties who have a registered interest over the property.
How Much Do Searches Cost?
At Keylaw, we run your searches as part of our fixed fee arrangement, but you will need to pay the relevant government agencies for the searches. This money is paid to us, and we pay it out on your behalf.
The cost of searches will depend on what local council area the property is located in, and whether it is part of a community titles scheme (i.e., whether it is a house, or a unit, apartment, or duplex).
The searches needed for a property purchase also depend on the particulars of the property you are buying and how you are planning to use it. For example, further searches would be recommended if you are planning to develop the land.
What Searches Will I Need?
Below is a guide to some of the more common property searches. As we have said above, different searches may be recommended depending on your situation. For a more detailed breakdown of the searches that may be required on a property you are purchasing, please reach out to our office for a personalised quote.
Title Search
The title search shows the full name of the registered owner or owners of the property, and all registered mortgages, caveats and claims against the property by third parties. It will also show any registered easements and other registered encumbrances.
An initial title search is done early in the conveyancing process, and another is done right before settlement to ensure no encumbrances have been registered in the meantime, and clear title is passed to the new owners when the sale is finalised.
Land Tax Clearance Search
A Land Tax Search is a critical search which reveals whether or not there is any land tax owing on the property.
Because the obligation to pay land tax goes with the land, if the property settles with an unpaid land tax bill, the new owners will inherit that liability. In our decades of practice, we have seen land tax debts of tens of thousands, and even hundreds of thousands of dollars, so it is very important to ensure you are not inheriting land tax debt from the previous owners.
Easements And Encumbrances
Easements and other encumbrances effect your rights to deal with the land, and may grant rights to other parties to access your property. A search can reveal easements and encumbrances burdening the land, and what the easement is for; eg for drainage, sewerage or right of way.
Council Searches
Rates Search
A full rates certificate is recommended to ensure there are no outstanding rates owing on the property. If any rates aren’t paid at settlement, the new owner will take responsibility for them.
It is reasonably common for large amounts to be owning and so this information is important to have prior to settlement.
Special Water Meter Reading
Water meter reading is important for the same reason as the rates search.
If there is money owing on a water bill at settlement, the new owners will take responsibility for paying it.
A special water meter reading also allows for buyers to receive an adjustment for the average daily consumption of the Seller from the previous billable read to the day of settlement.
What About A Flood Search?
It is common for buyers to be concerned about whether the property they are purchasing has been flooded in the past.
Most local councils offer a free search that will indicate whether or not the property is known to have been flooded. For example, see the Brisbane City Council Flood Awareness Map.
However, it is important to note that the accuracy and thoroughness of these reports varies, and it is unlikely that councils could be held liable if the information in them is incomplete or inaccurate. If you are concerned about flooding, it is best to have a hydraulic engineer prepare a report.
Body Corporate Levies & Insurance Certificate
If you are purchasing property in a community titles scheme, your conveyancer will recommend a search to ensure there are no outstanding levies owing on the property.
You will also require an insurance certificate. This certificate shows that the new owner is protected against claims related to the community title. Most lenders will require a copy of this certificate ahead of settlement before they will advance funds.
The information revealed in the above searches is in addition to what you should have received in the body corporate disclosure statement prior to contract. We also recommend buyers do their own research by inspecting the body corporate records.
Other Searches
There are many other searches that may be required depending on your circumstances. These include;
ASIC Search
If the seller is a company, a search should be performed of the company to ensure it is not bankrupt, and to ascertain the names of the Directors so your conveyancer can check that the contract was validly executed.
Personal Property Securities Register
The Personal Property Securities Register (“PPSR”) is a register of security interests in personal property. A search of this register will show whether any improvements to the land or chattels sold with the land have a security interest against them. This is important because property sold subject to a security interest registered on the PPSR can be repossessed to satisfy the previous owner’s debt.
Conclusion
The above is only a guideline to some of the more common and recommended searches performed as part of the conveyancing process. There are many other searches available, and many of them will be important to you depending on the property you are looking at purchasing.
More Questions?
When you contact Keylaw, we will give you an obligation-free quote including the searches that will likely be required on the property you are buying.
If you have questions about property searches or any other aspect of conveyancing, contact one of our friendly, expert conveyancing solicitors today.
The above is not legal advice and is general information only.
