How do I transfer the house after a Family Law settlement?

Transferring a Property persuant to the Orders
The Orders themselves do not effect the transfer of the property - it needs to be done by the lodgement of Transfer documents with the Titles Office. Generally, the party receiving the property will be responsible for:

• The preparation and lodgement of the Transfer;
• The refinance of any mortgage over the property into their sole name;
• Legal or bank costs associated with the transfer.

The process to transfer a property pursuant to Orders can take approximately 1 to 3 months, mostly dependant on the processing time of the refinance.

The Titles Office requirements for the preparation and execution of the Transfer documents are strict with specific wording to be included to note that the Transfer is pursuant to Court Orders. The Titles Office charge a lodgement fee for a Transfer which is dependent on the purchase price or property value; however, this fee is waived where the property is transferred pursuant to a Court Order.

The Office of State Revenue also imposes Transfer Duty on the transfer of any property in Queensland the amount of which is calculated based on the value of the property and whether the property will be used as a home or investment. An exemption of stamp duty is available where the property is transferred pursuant to an Order but the Transfer still needs to be stamped with the Office of State Revenue and appropriate documentation retained.

A date for Settlement of the transfer is either set by the Orders or once all banks and parties are ready.

See our How to Guide, How to Splity Assets After Separation, for more information on how to deal with separating the family assets.

Refinancing the Mortgage
Where there is a mortgage on the property it will need to be refinanced from the joint names into the name of the party receiving the property. To start this process a Discharge Authority needs to be completed, signed by both parties and submitted to the releasing bank. The Discharge Authority can be obtained either from your bank's website or by contacting them directly. Most banks require at least 3 weeks to process a discharge and prepare for Settlement.

At the same time, the party receiving the property will need to apply for approval to refinance the mortgage into their sole name. It is up to the party receiving the property whether they refinance with the same bank or a new bank. The incoming bank will complete their own checks for the approval as well as require mortgage documents to be signed and prepare for Settlement. It can take 1-2 months for the incoming bank to prepare for Settlement.

Settlement Day
Provided all documents have been satisfactorily completed, the settlement process is relatively simple. The releasing bank will provide a Release of Mortgage in exchange for a payment of the outstanding balance on the mortgage. The incoming bank will take the Release of Mortgage, Transfer documents and a copy of the Orders to lodge with the Titles Office. The funds required to payout the Mortgage and make any payment pursuant to the Orders will be provided by the incoming bank or from cash funds of the party receiving the property; depending on the individual circumstances of each transaction.

The Titles Office and Office of State Revenue have recently given approval for a transfer of a part interest in a property to be conducted on the Pexa electronic settlement platform. A settlement on the Pexa platform is usually quicker than a physical Settlement and can make signing of the documents easier.

Common Pitfalls
There is always a risk of issues and delays arising, especially when dealing with two banks in one transaction.

Common issues include:

• Delays or issues with the bank's valuation (ie a lower valuation than expected).
• Consent Orders only providing a short period for the transfer to be effected. It can be difficult to organise the signing of all documents required as well organisation of two banks in a short period.
• Errors in the execution of the Transfer or Mortgage. The Titles Office execution requirements are strict and if not followed the re-execution of documents will be required before Settlement can proceed.
• Miscalculation in the funds required for Settlement. Together with any payment to the spouse pursuant to the Orders, the party receiving the property will also need funds available for a solicitor to settle the Transfer as well as bank fees and potentially mortgage insurance.

Conclusion
The process of transferring a property pursuant to the Orders can be made much easier with a solicitor experienced in property transfers to ensure documents and processes are completed correctly and efficiently. Starting the refinance process early can also help the transfer process be completed quickly and avoid delays once the Orders have issued.