The process of buying and selling houses can be a complicated one, and there are a number of terms and concepts that you need to understand in order to make the most out of your real estate transactions.
Conveyance is a key part of the process, and understanding how conveyancing works will help to ensure that you don’t get caught up in any legal jargon or technicalities.
But just what does convey mean in real estate, and why is it such a key part of the process? We put together all you need to know about the significance of conveyancing in real estate, and the key stages of the process.
What's Ahead...
What Is Conveyancing?
The term “conveyancing” refers to the entire process of legally transferring ownership of property from one owner to another – when two parties engage in the sale of a property, be that a house or commercial property, they will transfer ownership of that property through a conveyance.
Conveyancing is a term that is most commonly associated with real estate transactions, though other types of conveyancing also apply.
What Does Convey Mean In Real Estate?
A conveyancer is an individual who specializes in the legal aspects of real estate transactions.
They are often called upon by both buyers and sellers during the course of their work, so they have a unique insight into the ins and outs of the process.
A conveyancer will typically take on the role of acting as an intermediary between the buyer and seller and ensuring that everything goes smoothly throughout the transaction.
The conveyance will be executed via a conveyancing instrument, which is a written document that details the exact conditions under which the property is being transferred.
This includes things like the price paid for the property, the date of the sale, the names of the parties involved, and the obligations and responsibilities of the two parties.
It will also include information regarding the title deeds and mortgages, and any other documents that may be required.
Types Of Conveyances
There are many different types of conveyances that can be used in real estate transactions.
These vary depending on the type of property being sold, the location where the property is located, and the circumstances of the sale. Some of the main types of conveyances include:
- Sale Deed
This is the simplest form of conveyance, and is usually used for residential properties. It simply transfers the title deed (the legal documentation) from one party to another.
- Leasehold Deed
This is a more complex version of the sale deed and is used for commercial properties.
It allows the lessee to continue living in the property until the end of the lease period, but at the same time gives them the right to purchase the property at the end of the lease.
- Contract Deed
This is similar to a leasehold deed, except that it only applies to properties that are not already owned by someone else.
- Mortgage Deed
This is used for properties that are mortgaged and is essentially a contract between the mortgagee and the borrower. The lender has the right to repossess the property if the loan isn’t repaid.
- Partnership Deed
This is usually used for partnerships and is basically a contract between the partners.
- Trust Deed
This is very similar to a partnership deed, except that it’s used for trusts instead of partnerships.
- Inheritance Deed
This is normally used for estates, and is essentially a legal agreement between the executor of the estate and the beneficiaries.
- Inheritance Tax Deed
This type of conveyance is used for estates that are subject to inheritance tax. It’s essentially a contract between the executors of the estate and the government.
The Legality Of Conveyances
In addition to the details outlined above, conveyancing also helps to ensure that the buyer is informed and made fully aware of all details of the property before deciding on whether to buy it.
This ensures that there aren’t any surprises later down the line.
The buyer is legally required to be informed of any restrictions on the property, such as mortgage liens, and a conveyance, therefore, assures the buyer that the deed and title of the property are clean.
The Steps Of Conveyances
There are several steps involved in the process of conveying a property. They include:
- Obtain Permits And Licenses
The first step in the process is to obtain the necessary permits and licenses. This involves obtaining building permits, planning permission, and any other relevant licenses.
- Prepare The Property
Once the permits have been obtained, the next step is to prepare the property.
This means cleaning up the property, removing any rubbish, and preparing the interior so that it meets the standards set out by the local authority.
- Draft The Contract
After the property has been prepared, the next step is drafting the contract.
This includes writing up the terms and conditions of the sale, including the price, date of transfer, and other important information.
- Sign The Contract
Once everything has been agreed upon, the final step is signing the contract. This is done with both parties present, and they sign their names on the document.
- Exchange Funds
Once the contract has been signed, the funds must be exchanged, and this can take anywhere from one day to a few weeks depending on how many people are involved.
- Transfer Title
At the end of the exchange of funds, the seller will hand over the keys to the property, and the buyer will then need to arrange for the title deeds to be transferred.
This is done through the Land Registry, which is an independent organization that records land ownership.
The Land Registry is responsible for recording all transactions involving real estate, and it keeps track of who owns what piece of land.
Final Thoughts
As you can see, conveyancing is a complicated process, and you must ensure that your purchase goes smoothly.
If you’re buying a house, you’ll probably need to use a solicitor to help you through the process – this will help to guarantee that everything runs smoothly.
Paul Martinez is the founder of BendingDestiny.com. He is an expert in the areas of finance, real estate, and eCommerce.
Join him on BendingDestiny.com to learn how to improve your financial life and excel in these areas. Before starting this blog, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.