Transfer and Creation of Rights in Land
1. The purchase and sale of rights in land depend on a system called conveyancing.
2. There are two different systems of proving title to land and investigating third party rights in that land.
3. The systems are called unregistered conveyancing and registered conveyancing.
4. There are several stages in the acquisition of rights in land.
5. The stages are:
(i) pre-contractual enquiries;
(ii) the exchange of contracts;
2.2 Pre-Contractual Enquiries
1. Until the contracts have been exchanged, the parties are not bound, although they may have agreed the terms of the contract.
2. In contracts for the sale of land the seller is also called the vendor.
3. An agreement ‘subject to contract’ does not bind the parties.
4. Either party is free to withdraw, usually without penalty, at any time up until the exchange of contracts.
5. The purchaser may be subject to gazumping, where the vendor accepts a higher price even after agreeing to sell to the purchaser. Likewise the vendor may be subject to gazundering where the purchaser forces the vendor to accept a lower price.
6. Gazumping can be very costly to purchasers who spend money on finding out information about the property they are about to purchase.