The settlement is the final step in the conveyance process. It is when all the legal formalities of the case will be finalized. It indicates that the transfer of the property or assets will be fully transferred to the buyer. It is also here, that the last payments to the vendor will take place. The complex nature of the events necessitate a conveyancer or solicitor be present.
Prior to the legalities taking place, the concerned parties must first book a settlement. All the participants – or their legal representatives – must then gather in the settlement room with the necessary documentation. It is only then that the concluding proceedings may begin.
There are three main documents that need to be present at the settlement. These along with the fees are to be lodged with the Land Titles Office (LTO) once the proceedings have been concluded. The first file required is called the memorandum of transfer. This is required for the transfer of the title from the vendor to the buyer. This certificate ensures that it will be the buyer’s name on the property for all intents and purposes. The second document is the memorandum of mortgage. This is when the mortgage of the buyers is listed on the property’s certificate of title. The final file is called discharge of mortgage. This is when the vendor’s mortgage is taken away from the certificate of title. Once all of these documents have been filed with the LTO, the LTO will inform all the necessary agencies of the title transfer.
Completion of Settlement
There is one more step before the events can be concluded – stamp duty. This is a tax that is levied before or during the time of the proceedings. It is calculated according to the value of the asset or property at the time of the sale.
The vendor and the buyer will be informed once the title transfer has been settled. They will then be able to exchange any keys or other important items necessary to the transfer. This is usually when the conveyance between the two or more parties has concluded.
Once the property title of has been legally transferred to the buyer, the rates and taxes are immediately applicable. This means that the buyer is now responsible for the rates and taxes placed upon the property or other assets. The charges will be lodged in the name of the new owner.
A settlement is said to ‘crash’ when it does not take place at the appointed time and place. There are several reasons for such a crash to occur. It may be due to legal reasons, a financial one, or simply due to unavoidable circumstances. When this happens, the conveyance has not been completed.
The reason that the proceedings did not go through will alter the compensations that each party will receive. For instance, if it was the fault of either the buyer or the vendor then the other party will receive remunerations. A new date will have to be set to begin the finalizations of the conveyance once more. The buyer does not have any legal claim to the assets or property until the conveyance has been confirmed.
The most important aspect to remember about a settlement is that you should always have a professional present. It may be a conveyancer or a lawyer but they do need to have knowledge about the proceedings. It is an intricate agreement and must be handled by the proper authorities.