Conveyancing Guides

Conveyancing Guide England

Conveyancing Guides England & Wales

Trusted Advice Conveyancing Guides – Advice provided to the public by the Law Society

Buying a home is an exciting time but it can be confusing, especially if you’re a first-time buyer. Our conveyancing guides describes the legal transfer of property (from seller to buyer). How long it takes depends on several things, such as how many buyers and sellers are involved in the process, but it can take time if you are not organised.

A solicitor can help you buy your home by explaining the steps involved and helping you to resolve any legal issues that come up.

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What are searches and surveys?

HBC-Stamp-1000S-OF-CLIENTSCarrying out searches will provide details about issues that could affect your new home including legal disputes, flooding, planning constraints and permissions. Your solicitor will make these searches for you.

A survey will be carried out by a specialist surveyor and will highlight any problems with your new home (for example, structural issues, damp). If there are any problems you may want to reduce the price you pay for the property.

Your solicitor will help to resolve any property-related legal problems that are revealed by searches and surveys before ‘exchange of contracts’.

What is exchange of contracts?

HBC-Stamp-Commercial-SolidExchange of contracts confirms your agreement to buy and the seller’s agreement to sell the property. You and the seller can change your minds about buying or selling the property before contracts are exchanged.

However, once contracts have been exchanged, they become legally binding and there may be significant financial penalties if you or the seller pull out of the sale. Your solicitor and the seller’s solicitor will exchange contracts signed by you and the seller. Your solicitor will also work with you and the seller’s solicitor to agree a date for completion.

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What does completion mean?

Completion takes place when the purchase money is transferred to the seller and other fees are paid. Once all the necessary searches and investigations have been made, your solicitor will tell your mortgage lender the results and the lender will let them have the mortgage monies.

Your solicitor will also transfer the money to the seller and pay other fees on your behalf. Your solicitor will help you to prepare the tax return and make arrangements to pay the Stamp Duty Land Tax to HMRC. They will also register your name as the owner, and your mortgage lender as the lender, at Land Registry.

This means that completion of the purchase can take place and you can get the keys. It’s now time to move into your new home and to celebrate!

Why do I need a solicitor for buying a home?

stamp2There are a number of legal problems that can happen when buying a property so it’s risky to buy a home without help from an experienced and skilled conveyancing solicitor. Not only is it a very complicated and time-consuming process, but there are a number of legal documents that need to be completed. Mortgage lenders often ask for a conveyancing professional to carry out the process. It’s not worth taking any risks when buying a home as it can be the most expensive purchase in your life.

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More of The Basics

Under English law agreements are not legally binding until contracts are exchanged. This affords both the advantage of freedom before contract, but also the disadvantage of wasted time and expense in the event the deal is not done.

The normal practice is for the buyer to negotiate an agreed price with the seller then organise a survey and have the solicitor (or conveyancer) carry out their searches and pre-contract enquiries. The seller’s solicitor or conveyancer will prepare the draft contract to be approved by the buyer’s solicitor. The seller’s solicitor will also collect and prepare property information to be provided to the buyer’s solicitors, in line with the Law Society’s National Protocol for domestic conveyancing.

It takes on average 6–10 weeks to complete a conveyancing transaction, but while some transactions are quicker, many take longer. This depends on the speed of lenders issuing loan papers and if you are in a chain the slowest link. The timescale is determined by a host of factors – legal, personal, social and financial. During this period prior to exchange of contracts (exchange being the point at which the transaction becomes legally-binding) either party can pull out of the transaction at any time and for any reason, with no legal obligation to the other. This gives rise to a risk of gazumping and its converse, gazundering.

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Conveyancing The main Stages

First Stage  – the “pre-contract” stage.


HBC-Stamp-FreephoneOk you have a plan, an idea and you need some help to ensure that you don’t loose out?  ‘instructing us to act for you in the transaction’.  Instructions can be given by telephone, by post or by email – there is no need for you to visit our offices to deal with this (but you may if you wish).  You will be sent “terms and conditions of business”  to you together with the necessary “identification requirements” and any other forms that are relevant and need to be completed. 


If you are intending to borrow money to help with a house purchase then now is the time  for you to make a formal application for a loan, so that this is processed whilst we deal with the preliminary work.  This is also the time for any surveys and inspections to be organised.  It is vitally important that everyone understand that buying property is strictly interpreted as ‘Buyer Beware’ this applies to house purchase as any other purchase, and that the prospect of claiming against the previous owner for defects found later are virtually nil unless you can prove that the defect was deliberately concealed, which is extremely difficult to do.  You must ensure that your lawyer is aware of any issues. If in doubt put any concerns in a contract.

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During this early stage the sellers’ solicitors will prepare a contract and send it to the buyers’ solicitor (this is the opposite in Scotland) with evidence of the sellers’ ‘title’ (proof that they own the property that they are intending to sell) and certain other ‘standardised’ documents and questionnaires that the Seller will provide.  Enquiries raised on a sale must often be sent to you for your reply, but we are always happy to go through these if necessary and to guide you as necessary with your replies.  All of this information is then checked by the Buyers’ solicitors to make sure that they are happy with it, and they will apply for the appropriate initial searches (most often a Local Search and a Drainage Report, sometimes with a Mining Report and possibly an Environmental Report, and possibly other searches depending on various factors).  We would also encourage you to take a dispassionate look at the house that you are wanting to buy, to identify any matters which concern or interest you.  Let us know what questions you have and we will raise them on your behalf.

HBC-Stamp-Free-Online-QuotesWhen the results of all of the searches and enquiries are available, and any questions arising from them have been satisfactorily answered, and the mortgage offer has been received, then we will be in a position to report to you.  This can be done in person at our offices, or by post.  If you live locally then we encourage you to visit us, but it is not essential.  The report will cover all aspects of the purchase or sale and ensures that you know everything about the transaction that is known to us, so that you can then make an informed decision about whether to proceed further or not.  Assuming that everything is satisfactory (as is usually the case) then we will ask you to sign the documents (usually the Contract, Transfer Deed and (if you are buying) the Mortgage Deed), to discuss possible ‘Completion Dates’ and (again, only if you are buying) to pay your deposit.  Don’t worry – simply signing the documents at this stage does not commit you to the transaction!  In order to commit both Buyers and Sellers to the sale/purchase the solicitors involved must have authority (from you) to proceed and the Buyers’ solicitor must have the deposit, and they will then ‘Exchange Contracts’ on your behalf (usually by telephone under a Law Society ‘formula’) usually without you being present.  You will of course be informed immediately that this has been done, when we will also confirm the ‘Completion Date’ which by then is a term of the contract and which we will not agree without your express approval.
You are now committed to the deal, and failure to complete it on the due date would mean a ‘breach of contract’ with potentially very serious financial consequences – including for a Buyer in breach the probability that the deposit will be lost as a minimum.

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Second Stage  – the “pre-completion” stage.


Having committed you to the contract we now prepare for Completion.  Literally this means the completion of the terms of the contract,  so it involves the payment of the balance of the purchase price and the legal transfer of ownership all (hopefully, and usually) on the agreed date.  More important for you in practical terms it involves the handover (usually direct between Buyers and Sellers) of the keys – it is the day for the Sellers to move out and for the Buyers to move in.  The big day!  But before this can happen the necessary Transfer Deed must be prepared and signed,  final searches carried out to ensure that no bankruptcies are involved and that all existing mortgages are known about and dealt with, and all necessary monies drawn down including new mortgage monies.  It is our job to ensure that all of this and any other necessary work is done in readiness, to ensure that  you have as trouble free a day as possible.  You are now in your new home and you might well think that our role is done, but we still have work to do!
 

Third Stage – the “post-completion” stage.


The ownership of most land in England and Wales is now registered at H. M. Land Registry, and if not registered when you buy it then it will then need to be registered.  Our job is not finished until we have ensured that you are registered at H. M. Land Registry as the new owners of the Property and your lender is registered as Mortgagee. In recent years this process has become increasingly streamlined and efficient, but it is still a job that we must do and we are not finished until it is done.  When the registration process is finished (usually around one month from Completion) then we will send copies of the “Title Information Document” (which is a print-out of the information held on the Land Registry computers) to you and your Mortgage Company as proof that the necessary work has been finished.  We may also send old deeds and   
other documents to you for safe keeping as Mortgage Companies rarely want these now, but these should be kept by you for the time when you decide to sell.

 

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Conveyancing Terms Explained

 

Building Insurance:

It’s a good idea to investigate this early because in most cases you become responsible for the building’s insurance (against fire damage etc.) from the moment you exchange contracts.

Contents Insurance is not necessary but your building insurance must cover the cost of rebuilding the property. Your lender will insist on this and many other criteria. Check to make sure you remain insured.

Term of Business or Client Care Letter:

This letter contains a cost breakdown and description of the service your conveyancing solicitor will provide.

Completion Date (selling):

This is the date you receive full payment from your buyer. Your property is now theirs and you must handover the keys and vacate.

Completion Date (buying):

This is the date you make full payment to your seller. Their property is now yours. Collect the keys and move in.

Completion Statement:

This is a financial breakdown of your purchase and all the related costs.

It ends by stating the amount of money your conveyancing solicitor needs from you to complete on your new home.

Contract:

The legal document setting out the terms of the sale / purchase and the parties involved. Known as missives in Scotland

Contract Pack:

This is a set of documents forwarded to your buyer’s conveyancing solicitor so he may investigate your legal title over the property.

Usually it contains the draft contract, title deeds, property information form, fixtures & fittings form, leasehold management information (if applicable), building guarantees and any planning consents you’ve been granted.

Deposit:

The amount of money you will be paying the seller on exchange of contracts.

This is shown as a % of the full purchase price. Your conveyancing solicitor may be able to negotiate less on your behalf (useful if your mortgage has a high “loan/value” ration).

Exchange of Contracts:

This is the moment the transaction becomes legally binding. Up until now either party is able to walk away without penalty (i.e. being sued for damages).

Identical copies of the contract are signed by both parties and swapped (usually by post).

The buyers also hands over his deposit for the seller’s conveyancing solicitor to hold until completion.

Fixture & Fittings Form:

This is a standard form provided by the Seller/vendor’s conveyancing solicitor setting out what is and isn’t included in the sale price.

H.M. Land Registry:

This is a central governing body that records the ownership of land & property throughout England & Wales.

Land Registry Office Copies:

This is the official copy (i.e. accepted in a Court of Law) of your property’s record held by H.M Land Registry. It normally consists of a Property Register and Title Plan and rules/conditions of ownership.

Local Authority Searches (when buying):

This are questions asked of the Local Authority about the property you’re buying.

Councils keep registers of all Planning Permissions, Road Proposals, Environmental Health related matters, Tree Preservation Orders, Compulsory Purchase Orders and Highway Adoption. These records are searched to see how & if they affect the property you’re buying.The problem with these standard searches is they only relate to the land within the boundary of the property.

Unless you specifically ask your conveyancing solicitor to perform a separate (and more comprehensive) “planning search” , you’ll know nothing about what may be happening to properties next door or nearby. Also, the standard local searches won’t alert you to any building or infrastructure projects currently being proposed or voted on by the Council (e.g. Proposals that are at Committee Stage).

If your worried about this your best bet is to visit the council and ask some questions directly to the Planning & Highways Dept.

Pre-Completion Searches (when buying):

These are to check that firstly you haven’t become bankrupt since your mortgage offer was approved. Secondly. They check that the property is still owned by the seller.

Property Information Form (SPIF):

This is a questionnaire given to the vendor about their property. It asks about boundaries, disputes, notices, guarantees, services, sharing with neighbors, arrangements & legal rights, occupiers, restrictions, planning, fixtures & expenses. It sounds a lot but mostly you’re just expected to provide yes/no answers. Take care filling it in because failure to disclose known information is an offense. Your conveyancing solicitor will help with any questions you’re unclear on.

Redemption Settlement:

This is what it costs to pay back your mortgage early. It consists of the money you still owe your lender and probably an “early payback” penalty too. This penalty payment compensates your lender for the interest he’ll loose out on from your loan not running its full term.

Stamp Duty (when buying):

Your Government Tax on Purchasing or transacting in property.

Title Deeds:

This document provides proof of ownership for a property.If you have a mortgage then your lender will be holding them. Obtaining your title deeds is one of a seller’s conveyancing solicitor’s first jobs. It can take up to 2 weeks for your lender to go through his draws and find your deeds. This is why it’s important to instruct you solicitor early. Finding your deeds before finding a buyer shaves precious weeks off the conveyancing process.

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