What's the difference between a conveyancer and a lawyer, and do I really need one?

GUEST OBSERVATION

Conveyancing is the process of transferring ownership of land from one person to another, under the terms of a contract for the sale of that land.

That's it!

Every Australian state has different law, forms, regulations, fees, time requirements, protections, jargon and government departments as part of the conveyancing process.

But basically each state follows the same steps - just the details changes.

Whether you are buying or selling, there is a contract that sets out the terms of the sale. The buyer and seller have obligations and rights under the contract. The conveyancer's job is to make sure you do what you are supposed to do when you are supposed to do it.

Queensland and ACT

Unlike the other Australian states and territories where there are conveyancing companies owned and run by licensed conveyancers, it is illegal in Queensland and the ACT to have conveyancing companies owned by licensed conveyancers. All paid conveyancing work in QLD and the ACT must be done by a law firm. That is the law!

Many law firms in Queensland and the ACT have set up conveyancing companies that are in fact law firms and are treated as law firms. These companies must therefore comply with the rules and regulations of a Legal Profession Act which is administered by the relevant law society. Licensed conveyancers and para-legals can be employed in these law firms run as conveyancing companies, but all work must be supervised by a solicitor.

The bottom line is that in Queensland and the ACT it doesn’t matter at all if you go with a conveyancing company or a law firm, because there is no difference between them. The solicitor/law firm must hold a current practising certificate as well as having professional indemnity insurance.

All Other States and Territories

In NSW, Victoria, South Australia, Western Australia, Northern Territory and Tasmania, entities that provide a conveyancing service may be law firms or licensed conveyancers.

Like law firms, licensed conveyancers are able to prepare your documents and offer advice within the scope of the laws regarding conveyancing. They will provide you the services necessary to complete your property transaction including title searches, liaison with financial institutions, contract advice, preparing legal documents, stamping, calculating rates and taxes as well as preparing for and attending settlements.

Licensed conveyancers cannot give legal advice outside the area of conveyancing.

The Australian Institute of Conveyancers (AIC) has divisions in all of these states and territories. They are the peak body representing conveyancing in Australia. Conveyancing entities may apply to become a certified practising conveyancer recognised by the AIC. Certified practising conveyancers would work to the best practice standards as governed by the AIC.

How to Pick Your Legal Advisor

You have the right to do your own conveyancing. However, you won’t have a legal practitioner’s or conveyancer’s professional indemnity insurance to protect you if you do something wrong. And you won’t know if something is about to go wrong if you don’t have the knowledge to foresee any issues that may arise and which you should have protected yourself against.

While only Queensland and ACT require a solicitor/law firm to do paid conveyancing, you still have the choice of using a solicitor to complete your conveyance in all other states and territories.

All law firms must comply with the minimum professional standards of their state and territory law society and every licensed conveyancing company will have their own standards. Each must comply with their own rules and recommendations and any legislative regulations. The ethical standards of law firms are higher than those of conveyancers, and the penalties for non-compliance are greater.

Some things to take in consideration…

• Business people don’t give away anything that is valuable, especially their time. Be wary of anyone who works for nothing. Would you work for nothing?
• The best legal advisor will charge reasonable prices because they know how valuable their time and experience is. Experience is earned the hard way and valued. Generally the inexperienced need to provide an inducement to attract business.
• Be careful of giveaways that are being used to lure you in, especially if the company is the cheapest to start with or promise to undercut the rest. Quality will always beat quantity.
• Beware of businesses that offer a low cost first and foremost. These tend to have a high turnover of clients to compensate for their low fees and that means you won’t get as much service as a company that isn’t doing a high turnover and promotes service over cost. Look for service at a reasonable cost. Reasonable means in relation to the experience being offered.
• Conveyancing is a service industry and this is what you are paying for. There will be times in the conveyancing process where you will want immediate service and that’s a guarantee, but can you be sure you will get it when you want it on your terms, given the conveyancer may be snowed under with a high turnover of files?
• If you're paying a low fee don’t expect as much personalised service. Often you get the bare necessities. More often than not you won’t get answers to questions or explanations and they will probably not want to meet with you as this will take up their time. Essentially, they will try to spend the least amount of time on your conveyancing transaction as possible because time is money and the more transactions they can do, the more money they can make.

Don’t be taken in by ads for conveyancing companies when they:

• Say they are your saviour from chaos.
• Try and convince you that conveyancing is complicated, confusing, intricate, involved and carrying huge financial and time risks if the slightest thing goes wrong.
• Claim to be good guys.
• Are giving away something not usually given away and then try and make it sound like those who don’t follow their lead are the bad guys.
• Put down their competition by calling them dishonest, or accuse them of cutting corners. Truthful advertising talks about positives in self, not negatives in others.
• Tell you it’s all a bit dramatic and frightening and intend to scare you into using them – these tactics are aimed at first home buyers especially.
• Leave you feeling afraid or intimidated by the unknown because you don’t know anything, or very little, about conveyancing.

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Should I use a Lawyer or Conveyancer?

Conveyancers and lawyers are doing the same job - are they the same? No.

Conveyancers often charge less than lawyers because they are offering a lower service, e.g. they aren't qualified to give advice other than on conveyancing.

Lawyers provide full legal services at a comparable cost with conveyancers - therefore their service is generally better value for money.

A bigger business isn’t necessarily a better one

Low cost conveyancers will likely have substantially more files and clients than the more expensive ones. And they will need more clients turning over to keep the business open. As a result, the attention to detail is reduced as will be the time that they can devote to your case and to you.

A lawyer relies on his reputation which is based on his broad legal experience. They will have fewer clients and can give a more personalised service.

Qualifications

A conveyancer will have completed a conveyancing course and can do conveyancing work only.

Lawyers have university law degrees and are trained in conveyancing, property law, contract law, tax law, equity law, trade practices law, consumer law, local government law, family law, company law, the law of who gets your land after you die and other areas of law. These areas may be relevant to your conveyance, e.g. if the house you're selling is part of a deceased estate, the lawyer can advise on the will and tax implications.

Access to greater advice

Conveyancers aren't property law experts. They can't give you legal advice on consumer law protection, tax advice, and family law implications on how to buy the land so that you and your family are most protected or to have the best advantage.

A lawyer can give you more comprehensive advice.

Duty to refer

Conveyancer should refer you to a lawyer where legal advice is required e.g. the legal issues are too complex for a conveyancer.

Lawyers have access to their Law Society for advice or barristers or fellow lawyers in their own business or the profession generally. Usually, lawyers already have the information because of their qualifications.

Professional Indemnity Insurance

Conveyancing entities must have this insurance in place to become registered but you should always ask if their insurance is current.A conveyancer carries insurance for doing "conveyancing work", not anything else they do.

Do you know where conveyancing work starts and finishes and if the conveyancer is giving you legal advice they aren't allowed to? This means that you may have no claim where something goes wrong and you won’t know that until after your claim has been declined, or you've paid a lawyer to investigate what went wrong.

It is compulsory for a lawyer to have this insurance. It covers everything they do. lawyers cannot be issued their annual practicing certificates unless they have this insurance.

Professional standards

Conveyancers are only required to work within the law. There is no requirement to work to any standard - legal or management wise.

All lawyers must work within the law. They must also work to the compulsory levels dictated by the Legal Profession Act, the Regulations of the Law Society and their Professional Indemnity Insurers who create protocols of behaviour, management, service and accountability, so their standard of work and accountability is higher. Failing to work to the standard can lead to being disqualified by a supervisory body set up by Parliament. Consumer recourse against a lawyer is stronger and more regulated .

Conveyancer v lawyer - Which one should you use?

Use a conveyancer if:

• You are a first home buyer with limited funds and the transaction is low risk.
• If a house sale looks to be a relatively simple, conveyancers may be cheaper, and service should be the main consideration over expertise in the legal field. The question is how do you know if the selling your property will be simple?
• If you are on a tight budget and don’t expect personalised service.

Use a lawyer when:

• The property is of ‘high value’ as there is more risk.
• In very large real estate deals, or in complicated sales, it could be safer to go with a Lawyer as their legal experience, depth and breadth of knowledge delves into other applicable legal realms you may find yourself in need of help with.

If you want more one-on-one attention and the transaction is expected to be a difficult one.

Stephen Jensen is a senior solicitor with Monkey Conveyancing.