Conveyance is the act of transferring an ownership interest in a property from one party to another. Conveyance also refers to the written instrument, such as a deed or lease, that transfers legal title of a property from the seller to the buyer. The term is most closely associated with real estate, where a conveyance refers to the written contract between the seller and the buyer stating the agreed-upon purchase price and date of actual transfer, as well as the obligations and responsibilities of both parties. Conveyance of ownership of real estate is also referred to as conveyancing, and the legal representative overseeing the process can be referred to as a conveyancer.
Breaking Down Conveyance
A conveyance is a contract, which means that both the buyer and the seller are legally bound to fulfill their obligations. If either party does not do so, the other can take the defaulting party to court to enforce the contract or claim damages. Conveyancing ensures that the buyer is informed in advance of any restrictions on the property, such as mortgages and liens, and assures the buyer of clean title to the property. Many buyers purchase title insurance to protect against the possibility of fraud in the title transfer process.
Real Estate Conveyance
Conveyance is a general term that applies in a legal sense beyond residential real estate. The conveyance in most real estate transactions is also known as the sale deed. Conveyance is the category, and sales deed is a type of conveyance within that category.
The process behind a typical conveyance will include a review for liens and other encumbrances, ensuring all conditions have been met, settling all taxes and charges with the appropriate party prior to transfer, confirming financing and preparing all the documents for final settlement. The documents provided for conveyancing typically include the deed, mortgage documents, certificate of liens, the title insurance binder, and any side agreements related to the sale.
Mineral Rights Conveyance
Conveyance also applies to the oil and gas industry. As land is a form of real estate with attached rights, exploration companies use the term conveyance to refer to contracts that transfer to the company rights to or ownership of certain parcels of land. The most common conveyance is a contract granting mineral rights without turning over title of the land, but conveyances are also used to establish the right of way for a company’s operations on a landowner’s property. The landowner is, of course, compensated for transferring these rights to the exploration company.