Olsen Lawyers Conveyancing Searches GuideBen Olsen
Searches conducted during a conveyance will ensure that good title is transferred to you upon settlement. This means you will be aware of any financial or other encumbrance and can act on this before settlement. This will ensure you aren’t taking over any of the previous owners’ unpaid debts and can use the property in line with your intended purpose.
Example 1 – you purchase an existing house with a view to building a pool in the back yard, but failed to check for easements or other services. Your pool builder delivers you the bad news.
Example 2 – you purchase a unit, but failed to conduct an inspection of body corporate records, you later find out that due to issues with the common property you have to pay a special levy worth thousands of dollars.
Example 3 – you purchase a property but fail to do necessary searches, you later receive notices saying you owe outstanding rates, water and land tax (even though you just moved in).
How much do Searches cost?
On average our clients spend between $400 and $1,000 for searches in a purchase conveyance. The amount spent on searches on the property depends on the personal risk threshold of each buyer, the type of property, its geographical location and what your intentions are for the property. Please note that the amounts we charge you for searches are the actual fees charged to us by the search providers.
What Searches should I conduct?
The following are a list of standard searches that we recommend conducting at a minimum:
- Title Search (x2)
A Title Search confirms if they selling entity under the Contract matches that on title. It further reveals if any mortgages or other encumbrances are registered on the land. Certain encumbrances such as mortgages or a caveat will need to be removed before settlement. A second Title Search will be conducted on the day of settlement to verify that no encumbrance has been registered (eg a second mortgage) before settlement.
- Registered Plan Search
The registered plan will confirm if the property being purchased is correct, it will also show the boundary, size of the land and other important notations.
- Council Search (inc. rates)
An inspection of records Council Search reveals zoning and use of land, sewerage plans, flood data, council requisitions and rates position. Rates attaches to the land not the owner. Accordingly, if the seller has rates outstanding and these are not discovered by you until after settlement, you will be liable for same. We are able to make an adjustment at settlement in your favour.
- Special Water Meter reading
A special water meter reading takes the water usage reading from the date of the reading. As with land tax and rates, water usage attaches to the land and not the owner. Without obtaining a special water read most standard contracts do not allow for an adjustment for water usage and you will be liable for same from the last date water was levied to the owner, which is usually several months in arrears.
- Land Tax Certificate
This search reveals whether the previous owner owes any land tax on the property and if so, whether it has been paid. Land tax runs with the land rather than the owner, so you could be liable for any outstanding land tax owing if not dealt with before settlement.
- Personal Property Securities Register (PPSR) Search
A PPSR Search may be conducted for an individual grantor to identify whether the individual has any security interests over their personal property. This is the only way to ensure the property is passed to you without a security interest.
- Body corporate search (if purchasing a unit)
We recommend undertaking a search of body corporate records which in addition to levy information will reveal whether the body corporate is affected by defects or other matters such as disputes. We can also obtain a basic body corporate information certificate which reveals whether body corporate levies have been paid up to date.
Other Suggested Searches
- Contaminated Land Register
The Contaminated Land Register search will confirm if the land has been registered as contaminated as a result of poor environmental management or activities carried out on the land involving harmful chemicals. If your proposed purchase shows on the register, it does not exclude you from purchasing, though we would recommend that you consult with your builder or conduct further inspections.
- Queensland Department of Transport and Main Roads Search
This search confirms whether the Department of Transport and Main Roads has a land requirement for your proposed purchase, this may be, for example, a part or full resumption of your land for additional footpaths, bus stops or roads.
- Queensland Civil and Administrative Tribunal (QCAT) Search:
A QCAT Search identifies details of any previous and current applications or orders in relation to trees and fences on the Property and minor neighbourhood disputes. This is the only way to check whether the Seller’s disclosure in the Contract is correct.
Note: This is by no means an exhaustive list of searches. If you engage our services we will provide you with a more comprehensive list of property searches, and tailored advice as to those most appropriate for your purchase.
Can I terminate the Contract if my search results are unsatisfactory?
A standard REIQ Contract does not provide for a searches clause. You may elect to insert a Special ‘Due Diligence’ condition which would allow you to terminate should you not be full satisfied with the results of your searches. This condition would need to be inserted into the Contract prior to its execution and we recommend you approach Olsen Lawyers to assist with the drafting of this and any other special conditions that may be appropriate to your circumstances.
If you are unsure about how to conduct these searches, or their effects, please get in touch with Olsen Lawyers to act on your behalf in your purchase. Information current at 18 May 2018 – please note that this information is general in nature and you should contact us to discuss before acting upon same.
Contact Us here should you have any queries.