The following is a general guide to the conveyancing procedure when buying a property. If you are in doubt about any specific issue you should consult your solicitor directly.
- Once you have told the solicitor that you wish to use their services you should receive a Letter of Engagement or Confirmation of Terms of Business. You should sign and return this as soon as possible so that they can start work. Funds will be requested to cover initial expenditure such as the cost of the searches.
- You need to let your solicitor know from the outset if you are also selling a property and need the transactions to be tied together.
- Your solicitor will write to the seller’s solicitor to confirm that they are instructed and request the draft contract. This should arrive with a pack that includes information on the property’s title and the standard forms completed by the seller. If the property is leasehold a copy of the lease will also be included.
- Before you commit to buying the property your solicitor will ask you your wishes regarding shared ownership
- Many people buy houses in joint names and, as such, need to be aware of an important decision to be made in relation to joint ownership. There are two ways that you can jointly own a property:
- Joint tenants – this is where both parties have an equal interest in the property and if one of you dies the survivor automatically owns the property.
- Tenants in common – you each own a specific share of the property and can leave that share by Will, in the event of your death.
- You should inform your estate agent which solicitor you plan to use so that they can send a “Memorandum of Sale” to all the relevant parties together with a copy of the property particulars.
Legal Work prior to Contracting to Buy
- The solicitor will examine the draft contract documents and if necessary raise enquiries with the seller’s solicitor. You will be required to go through the standard forms that the seller has completed and let the solicitor know if everything is as you expected.
- If the property that you are buying is leasehold your solicitor will send a standard Managing Agents Questionnaire to the seller’s solicitors which will in turn be sent on to relevant Landlord/Managing Agents/Residents Association.
- Searches will be ordered
Property searches. There are things you may not know about the property just from viewing it with estate agents or even getting a survey. The conveyancer will do a set of legal searches to ensure there are no other factors you should be aware of. Some searches will be recommended by the solicitor for all purchases and others will be required by the mortgage lender to protect them from any liabilities that the property may have:
- Local authority searches: are there plans for a motorway in your new garden? How about radioactive gas? This costs between £70 and £400 depending on the Local Authority and usually takes 1-2 weeks, but can take up to 6 weeks
- Checking the ‘title register’ and ‘title plan’ at the Land Registry– these are the legal documents proving the seller’s ownership. The title register check costs £3 and the title plan check costs £3. Both are legally required to sell.
- Checking flood risk – this can also done at the Land Registry. If you are getting an Environmental Search you might not buy this one separately as the environmental search will contain much more thorough flood information and maps.
- Water authority searches – find out how you get your water and if any public drains on the property might affect extensions or building works.The water authority search will cost between £50 and £75.
- Chancel repair search – to ensure there are no potential leftover medieval liabilities on the property to help pay for church repairs. This is a necessity and costs £18. However, you may decide to take out Chancel repair insurance instead for £20 or so. The laws around Chancel repair changed in October 2013 so now the onus is on the Church to establish and lodge liability with the Land Registry.
- Environmental Search – this report is used on the vast majority of transactions and is provided by either Landmark or Groundsure. Depending which product your solicitor usually uses, the report will give information about contaminated land at or around the property, landfill sites, former and current industry, detailed flooding predictions, radon gas hazard, ground stability issues, and some other related information. The cost should be around £50 to £60 including VAT.
- Optional and location specific searches – sometimes extra searches are required or recommended depending on the location or type of property or due to particular concerns raised by the buyer. These could include:
- Tin Mining searches in Cornwall
- Mining searches in various parts of the UK and Cheshire Brine searches
- Additional Local Authority Questions such as Public Paths, Pipelines, Noise Abatement Zones, Common Land, etc.
- If you are taking out a mortgage your solicitor will receive a copy of the offer and go through the conditions.
- Your solicitor will normally undertake legal work on behalf of your lender as well.
Signing your Contract
- Once answers to all the enquiries, including possibly enquiries on information in the Searches, have been returned they will be examined by your solicitor and if they are satisfactory you will be invited in to sign the contract and any mortgage documents. You will need to make arrangements for the deposit to be transferred into your solicitor’s bank account so that it is cleared in time for an exchange.
Exchange of Contracts
- Before exchange of contracts can take place your lender (if you have one) will require you to have a Buildings Insurance policy in place.
- All the parties involved need to agree on a completion date.
- From the point at which contracts are exchanged you are legally bound to buy and the seller is legally bound to sell. Should either party back out the other will be entitled to claim compensation for losses arising.
- At the point that contracts are exchanged your solicitor will send your deposit to the seller’s solicitor. This acts as security for the seller in case you change your mind or for some reason are unable to pay the balance and complete the purchase. If that happens, the seller can keep your deposit, and may take you to court if the deposit is not enough compensation for breaking the contract. In the same way, if the seller exchanges contracts and then refuses to complete the sale, you could apply to the court for an order to force the seller to complete, or else get your deposit back and sue the seller for compensation. It is rare for a sale not to complete once contracts have been exchanged.
Between Exchange and completion
- Your solicitor will draw up the transfer deed so that the property can be registered in your name as soon as possible after completion. Your solicitor will also carry out some further searches of a technical nature.
- During this period you should receive a statement from your solicitor showing all your expenses and giving you a final figure which you will need to make sure is cleared in to your solicitor’s bank account before completion. If you are taking out a mortgage your solicitor will draw down the loan amount in time for completion.
- Completion is normally set for around lunchtime on the specified day although in practical terms completion takes place when the seller’s solicitor confirms that they have received all the money that is due. Once this has happened the seller should drop the keys off to the estate agent ready for you to collect.
- Your solicitor will arrange for the title deeds to be registered in your name and if the property is leasehold ensure that your name is entered on to the lease. They will also get the transfer stamped to officially approve the sale
- Finally, if you have taken out a mortgage, the deeds are sent to your lender for safe keeping until you either sell the property or pay off the loan.