For most people their biggest investment in their lives is buying their family home or an investment property. You would think that this process would be treated seriously by most people and they would want to know that the property they are buying is not affected by any significant legal issues and protect the value of your investment.
Sadly, many people (including real estate agents) take the view that when you are buying and selling real estate, it is only “paperwork” and that you should get this done as cheaply as possible. This has led to a proliferation of low cost “conveyancers” who purport to act in your best interests for a very low price. Most of these conveyancers or conveyancing companies engage unqualified clerks to do the work under the “supervision” of a principal who is a lawyer. In NSW, there are licensed conveyancers who are entitled to practice in their own right for conveyancing work. Usually they are cheaper than using a lawyer but not always.
The old adage that you get what you pay for is particularly relevant to buying and selling property. People will pay several thousand dollars for their insurance on their car or house but baulk at paying legal fees of $1,000 when they are purchasing a house worth $1 million! The costs that lawyers charge for conveyancing have been commoditised heavily over the years and the market is very competitive. Most lawyers continue to perform conveyancing as a service to their existing clients and even if they are lucky enough to charge $1,000 or thereabouts for their fees, they often perform the work at a loss.
It is our strong belief that clients should always use lawyers whenever they are buying or selling property. In Queensland the ramifications of not complying with contracts for either the sale or purchase of a property are quite cut throat and you could potentially lose hundreds of thousands of dollars through being involved in litigation if the process is not handled correctly. There are also important searches and other legal issues which affect the value of properties which need to be carefully investigated. Many of the cheap conveyancers who work in this area do not perform the proper searches, nor do they have any local knowledge of proposed developments or other government acquisitions which may affect the property concerned. Proper advice needs to be given in relation to any easements or other encumbrances that affect the property and quite often this can only be done properly by a lawyer.
There seems to be a belief that because a house has been bought and sold many times there is nothing wrong with the title. Nothing could be further from the truth. It could simply be that no one with the appropriate training and knowledge has looked carefully at the title to the property.
Lawyers must have compulsory professional indemnity insurance as part of their conditions for a Practising Certificate. If a lawyer makes a mistake in relation to your conveyance you will always have recourse to this compulsory insurance. It’s like having an insurance policy if anything goes wrong. Licenced conveyancers in NSW are not covered by indemnity insurance for acting in QLD matter.
All consumers intending to buy or sell property should seriously consider who they use as their legal representatives for this very important task. Another area of great concern is the fact that many conveyancers (and even some lawyers) regularly act for both parties in a transaction. Not only is this an obvious conflict of interest for any lawyer or conveyancer, in many cases there is a “double penalty” for their indemnity insurance excess. This could mean that the lawyer or conveyancer is not actually covered for the act of negligence and may not have the funds to payout any claim that is required.
We may be biased but we think that you should stick with your lawyer on the most important investment in your lives!
Should you require any help in buying or selling your home, please contact our Property and Commercial Department on 07 5536 9777 or email firstname.lastname@example.org.