Residential Conveyancing – Frequently Asked Questions
How long does it take?
It can vary a great deal. On average probably 6 to 8 weeks. The factors that play a part in how long the transaction will take most commonly are the time it takes buyer to find a mortgage and the mortgage lender to issue the mortgage offer. For leasehold flats the time it takes the management company to provide management information and finally how quickly the seller is ready to move. Many transactions are dependent on related sales or purchases.
At what point do I have to pay you?
Generally we ask for £500 on account shortly after we are instructed in order that we may submit our searches at an early stage. When we are ready to complete we will send you a completion statement which will show how much is coming from the buyer or going to the seller, how much is coming from the mortgage lender (buyer only), or going to the mortgage lender where you are redeeming a mortgage (seller only), our fees and disbursements, the stamp duty (buyer only) and the estate agent’s fee (seller only).
Do you still charge if it falls through?
We recognise this can be very disappointing and if we have not gone beyond requesting papers then we will not charge. However if a lot of time has been spent on the matter we will charge for the work done up to the point the sale or purchase is aborted and any disbursements incurred will also have to be charged.
At what stage can the buyer or seller pull out?
Either buyer or seller can decide not to proceed with the sale or purchase at any stage up to exchange of contracts.
How can I stop the buyer/seller pulling out before exchange?
During the property boom a few years ago it became quite popular for buyers and sellers to want the other party to sign an exclusivity agreement as soon as the offer had been accepted so that they could not pull out. Our view on this is that it is an unnecessary expense that may actually cause the transaction to be delayed as the buyer and seller seek to agree the terms of the exclusivity agreement, which usually start out being heavily weighted in favour of the seller – it is an option but why not just press ahead to exchanging contracts?
What happens if I can’t find the title deeds to the property?
Don’t worry too much. Firstly the deeds may be with the lender or they may still be with the solicitor who acted in your purchase. Secondly in most cases the land will be registered at the land registry and you will be able to prove you own the property by our obtaining up to date copy of the land registers which we have to do anyway. If your property is unregistered it is more of a problem but we would look for evidence that you have lived at the property going back as long as possible and you would sign a declaration stating for how long you had owned the property. There are also defective title indemnity policies that are not expensive to purchase and are usually acceptable for a prospective purchaser.
What exactly are searches?
Searches are enquiries or inspections of registers that hold information relating to the property. Aside from inspecting the land registers to check the legal title, the most important search is the local authority search which is essential because it provides the planning and building regulation history of the property and will tell you if any notices have been served which might require the owner to carry out work to the property.
The water and drainage search is very important to confirm that mains water and sewage are connected to the property and that the property has not been built or extended over drains or waterways to which the water service provider may have a right to access.
The environmental search is made to provide confirmation that the property is not built on ‘contaminated land’. Contaminated land can cause structural problems which may affect houses built on or nearby land that has or has a history of industrial or commercial use.
Do I need a survey?
We would say it is always a good idea to have a ‘homebuyer’s report’. It is surprising how many purchasers go ahead without this. It may cost around £500 but if you consider the value of the asset you are purchasing this is well worth the expense!
There are actually three types of survey. The most basic is the ‘valuation report’ which the mortgage lender carries out. This is a very basic check of the property’s approximate value, often made without even entering the property. It is made on behalf of the lender to ensure the amount they are lending will be covered by the value of the property.
The second type of survey is the above mentioned ‘homebuyer’s report’. This is advisable because it can bring to attention defects with the property that may not have been noticed following a single viewing of the property by a typical buyer. For example evidence of damp, broken tiles or alterations that might highlight the need to check the relevant building regulation or planning consents have been obtained. The surveyor will also advise on what he considers to be adequate buildings insurance cover and what he or she considers the value of the property is.
The third type is a ‘full structural survey’ which is advisable usually only for very old or run down buildings. It can be expensive and will need the seller’s permission to cause some cosmetic damage to the property in carrying out the survey.
So what happens if you find a problem with the property?
Where there is a problem there is usually some solution that can be found! If for example it is found that some work is needed to the property, or that the lease needs extending, it may take some re-negotiation with the seller, which you can do through the estate agent. If some legal documentation is incomplete it may be that it can be rectified either by obtaining the correct documents or having the matter dealt with by purchasing insurance. If no satisfactory solution could be found we would of course have to advise you not to proceed.
I’m about to sell my flat but I have just had a quarterly service charge demand – what should I do?
You should pay it as normal because all ground rent and service charges will be apportioned between the buyer and seller on completion, so you will be reimbursed by the buyer for the period running from after the completion date to the next quarter date. In fact some managing agents will not acknowledge the buyer until the service charges have been paid and are up to date so it is important for both buyer and seller for the seller to show that they are up to date.
What happens on exchange?
Exchange of contracts occurs when all checks have been satisfactorily carried out and any issues relating to the property have been resolved. The solicitors concerned will both be holding their respective client’s signed contracts in identical form and they will have a telephone conversation in which each solicitor undertakes to send each other their respective client’s signed contract and the buyer’s solicitor undertakes to send the seller’s solicitor the deposit which will usually be 10% of the purchase price which must be held in the buyer’s solicitor’s client account on the date of exchange. It is on exchange when the completion date is set and the sale becomes legally binding on both buyer and seller.
When can I move in or by when must I move out?
Not until the completion date.
What happens on the completion date?
Completion or the completion date is the date when the balance of the purchase price is paid to the seller’s solicitors who in return send to the buyer’s solicitors a transfer deed signed by the seller transferring legal title of the property to the buyer. This is also the date when the buyer can move in to the property and the seller must move out.
Ordinarily completion should occur around 1 pm but if there is a long chain of transactions it can be delayed until later in the afternoon.
Who has to pay stamp duty?
Stamp duty (now called stamp duty land tax (SDLT)) is payable by the buyer. If you are buying we will complete the SDLT return for you, advise you of the amount of SDLT payable and collect this from you shortly before completion. SDLT must be paid within 28 days of the completion date otherwise penalties will be incurred.
The seller does not pay SDLT. You should be aware of the possible capital gains tax consequences and may need to take further tax advice if you are selling a property which you do not use as your only or main residence.
What about paying the estate agent?
It is only the seller who pays the estate agent and as with stamp duty, once you have seen the completion statement which we will prepare, we will settle the estate agent’s fee from our client account on receipt of the sale proceeds.
Once I have completed, is that it?
Well yes it is in terms of what you have to do but we will apply to have your legal title to the property registered at the land registry and send you confirmation of this, which we are usually able to do within a few weeks of the completion date. We can then send you the deeds or if you like we can retain them in our deeds cabinet, held to your order for no extra charge.