Top Tier Legal Firms - Major Error at Settlement

Discussion in 'Legal Issues' started by RPI, 24th Jan, 2017.

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  1. Perthguy

    Perthguy Well-Known Member

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    Depends on the sale. In the example I gave, if the settlement agent had done a title search a few hours before settlement, then settlement would have failed because there was a caveat that would have prevented settlement. A few hours was not enough time to lift the caveat. It took about a week.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes good point, but it is not standard practice to keep doing title searches weekly because of the cost.
     
  3. Perthguy

    Perthguy Well-Known Member

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    In Perth, the buyers settlement agent does a title search before preparing the Transfer of Land document, which needs to be prepared with enough time for the buyer to sign and for the seller to sign? I forget. Anyway, the document should be prepared using the most current Title information available, which is why the buyers settlement agent completes the title search. That's how we found out about the new caveat in my case, which was lodged on the title after offer and acceptance. However, there is a risk that there could have been another caveat lodged between preparation of the Transfer of Land form and settlement. In that case you would hope the sellers settlement agent is competent and runs a title search just before settlement to make sure there are no new caveats.

    I think maybe title alerts can be set up in Perth. They might be worth it to prevent what I discussed above. It would be worth investigating for sure.

    What if I had leased the property but settlement failed because no one picked up the additional caveat? It would certainly inconvenience the tenant and potentially leave them without accommodation for several days. Not a good impression to create for your new tenant!
     
  4. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    In QLD you have to.

    What if someone lodges a caveat prior to settlement, or the vendor transferred the property to someone else
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You don't own the property till settlement (or until title is transferrred really) so you can't really enter into a lease before then, other than a lease subject to you becoming the owner.

    Don't forget there are many reasons why a property may not even occur even though you have a valid contract.
     
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  6. dabbler

    dabbler Well-Known Member

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    Re caveats, no point in doing search weekly anyway, because it could take years to remove it !

    Regarding new tenant, as Terry says, can't offer a lease till you own, but I was looking at one recently where the person was a landlord, so was negotiating to have them sign up tenant that I would inherit, then does not matter when settlement is.
     
  7. Perthguy

    Perthguy Well-Known Member

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    Depending on the purchase, Title Watch (for Western Australia) could be worth considering.

    TitleWatch is an online title monitoring service that sends automatic email notifications when an action is detected on a Certificate of Title. It can help prevent identity fraud happening to you with immediate and quarterly updates on title changes to ownership details, mortgages, leases and caveats.

    TitleWatch gives you immediate alerts to tell you about changes to your Certificate of Title

    TitleWatch is useful for monitoring any Certificate of Title, not just your own.

    TitleWatch - Landgate

    $29.95 seems a reasonable amount for this service. I don't how much the equivalent is in other states.

    Or check in your state to see if they offer a similar service.
     
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  8. Perthguy

    Perthguy Well-Known Member

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    I don't think it's true that I can't offer a lease until I own a property. I can enter a lease subject to becoming the owner. I raised the tenancy issue because I know people sign up tenants to move in the day after settlement to make sure there is no period of vacancy. Personally I would not do this. I would want to spend a couple of days cleaning and repairing minor issues before my new tenant moves in.

    In terms of having the current owner sign up the tenant and them passing them over to you, you would have to check the tenancy agreement is assignable. I am not sure that they usually are. If I even buy a house with an existing tenant, I sign them up to a new tenancy agreement. There are certain things that need to be done: bond lodgement, property condition report etc. The bond transfers easily but I don't think the others do. It is better for the previous owner to do an outgoing property condition report and the new owner preparing a fresh property condition report from the start of the new tenancy. That's how I do it anyway.
     
  9. dabbler

    dabbler Well-Known Member

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    Yeah, you def inherit the tenant/lease if buying tenanted, new agency agreement reqd, and would need to let tenant know owner is changing as place is in process of sale if signing them up on a new lease.

    Property condition is done with new lease, but that is where parties may not want to go through, as current owner also takes the tenant risk, as your tenant could damage the place and it could become an argument over who pays etc

    You can't rent out a place you do not own, only the owner could do that, you could organise to start a lease on day 1, that is my understanding.

    Always a way to do things, as long as all the parties agree & it is not illegal as per the thread on extra inspections.
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    you can, but it has to be subject to you becoming the owner.
     
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  11. larrylarry

    larrylarry Well-Known Member

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    In NSW contract of sale includes the most recent title search. A new title search will be obtained prior to settlement because there could be a caveat lodged in that time. To remove caveat you will have to go through the required process and it can't be removed by a click of a button.
     
  12. Perthguy

    Perthguy Well-Known Member

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    For our purchase it only took a couple of weeks to remove three caveats from the title.
     
  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The time will vary depend on who lodged them and why. Where they are friendly caveators it should be easy, but where they are not friendly - such as exspouses, disputes about the property etc - it can be impossible to get them removed.
     
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  14. dabbler

    dabbler Well-Known Member

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    Caveats can be abused or used for various reasons. They do not automatically come off because that is what is wanted, I won't write a whole lot here as it may do more harm than good.
     
  15. Plutus

    Plutus Well-Known Member

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    Mostly I'm baffled as to why anyone would want to pay top tier $x,xxx - $xx,xxx / day rates for what is from the sounds of it, a relatively cheap commercial property.

    If you're buying a $200,000,000+ CBD tower, yeah it makes total sense to go top tier because odds are you're going to be dealing with buyers and sellers from multiple countries, so a top tier that already has magic circle connections and can coordinate an international deal makes sense.

    If you take a deal worth peanuts to big firms, its not going to get dealt with by the quality staff.
     
  16. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

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    In Victoria, you can set up a title alert for three or six months. You get emailed as soon as there's any dealing with the title, including caveats and mortgage activity. My firm uses InfoTrack to undertake the alerts.