Conveyancing is the term lawyers use to describe the legal process of transferring ownership of land and any buildings built on it.
Conveyancing is a crucial part of the buying and selling process, which involves legally transferring home ownership from a seller to a buyer. Your solicitor will carry out the conveyancing on your behalf, and they will be happy to go into more detail with you, but here is a simple guide to lead you through what happens and when.
When house hunting or house selling it is important to do some research into the Conveyancing firm you wish to use, so that once things are ready to move forward, the process, which in the early stages can often move quickly, can be as streamlined as possible.
Once an offer is accepted
At this point, you should immediately instruct your Solicitor.
There are a number of matters that need to be addressed before any exchange of contracts can go ahead. There are four key things which need to be done:
- The seller’s solicitors will obtain the property’s title deeds and prepare a draft contract, which they will forward to the buyer’s solicitor for approval. The seller will complete standard Property Information forms detailing things like fixtures and fittings and leasehold information.
- Several searches will be carried out on the property, including local, environmental, and water and drainage searches. This process is designed to reveal any information that might adversely affect the property.
- The buyer’s solicitor will send any Pre-Contract Enquiries they have to the seller’s solicitors once they have looked at the title pack. These are designed to reveal more detail about any potential issues with the property regarding, for example, unusual rights of way issues, or whether the seller has carried out any structural alterations.
- The buyer needs to get a mortgage agreement in place, with a written mortgage offer from a lender before they commit to the purchase.
Once the above have been carried out, the buyer will receive a written report from their solicitor explaining the contract, search results and the mortgage offer in detail.
During this part of the process, the buyer’s solicitor will draw their attention to any problems before an exchange of contracts. The buyer’s solicitor will usually also send the mortgage deed to the buyer for signature at this time.
Exchange of Contracts
Contracts will be signed by the respective parties in readiness for exchange of contracts.
The contract is legally binding on both parties once exchange of contracts has taken place. The completion date will be set at this time. If either party refuses to proceed with the transaction or they delay and do not complete on the agreed completion date, then they will be liable to pay compensation to the other party.
Once exchange has taken place, the buyer’s solicitor will apply to the mortgage lender for money to be released in time for the completion date. They will also carry out other searches to ensure the seller hasn’t entered into any other contract or obtained another mortgage on the property. The solicitor will ask the buyer to settle his account prior to completion.
Completion
On the completion date the buyer’s solicitor will ensure that the balance of the purchase price is paid to the seller’s solicitor as early as possible, so the keys are released - usually around early afternoon.
After Completion (known as Post Completion)
There will be some loose ends for the buyer’s solicitor to tie up, including paying Stamp Duty Land Tax (LTT in Wales), and arranging for the registration of the title at HM Land Registry. It may also be necessary to serve notices on a landlord or the bank or building society, to advise them about the completion.
The solicitor will send a copy of the registered title to the buyer and their mortgage lender. They will also notify the freeholder, if the property is leasehold.
Timescales
A simple transaction with no complications will generally take between 10-12 weeks. However, we do advise our clients that complications can arise that will be outside of your and our control. This could include complications such as:-
- Where there is a long chain and your completion depends on a long line of straightforward transactions and everyone having the same timescales in mind.
- If there is a property in probate within your chain.
- If there is an issue with searches or the official registration of land.
- Issues with planning permission.
- Incorrect information on mortgage applications, for you or anyone in your chain.
- Complications with searches.
- Any pandemic, such as Coronavirus
We will always do our best to keep your transaction on track and moving forward and will communicate with you at all times if we can foresee that delays will be possible. Usually, these will be totally outside your or our control. This can be a difficult and stressful time in your life and will possibly be the biggest purchase you ever make, and our best advice is to be realistic and allow yourself freedom and flexibility on your moving date. Please be reassured that we will be doing our best for you at all times.
This actually means much less than it used to. The legal effect of “subject to contract” on an estate agent’s notice board is very little.
Before 1989 the phrase was used to prevent a binding contract being formed between the seller and buyer by accident. In 1989 Parliament passed legislation to prevent that from happening so the wording is in reality redundant. However, many estate agents and lawyers still use “subject to contract” to make sure that everyone is aware that whilst an offer has been made on the property and the legal process is being dealt with, there is actually no binding contract in force.
Title Deeds are the documents which prove you own the property you say you own. Since it has become compulsory to register property at the Land Registry the days of having bundles of title deeds have become a thing of the past – usually now the title deeds consist of a copy of the electronic registers held at the Land Registry.
Searches are enquiries made of various statutory bodies. If you are buying a property with the aid of a mortgage, then your lender will insist on various searches being carried out before it will lend any money.
Even if you are not having a mortgage, we strongly advise that you have searches carried out – because once you own the property you will be bound by any matters which affect the property and would have been revealed by those searches, whether you knew about them or not!
This is an offer usually made by a bank or building society, to lend money to someone to assist in the purchase of a property.
This used to be called “Stamp Duty” and is also now referred to as SDLT. It is the tax that the Government levies on the purchase of land – including houses and flats. If the purchase price is in excess of £125,000.00 then SDLT becomes payable at 1% of the total purchase price. If the price exceeds £250,000.00 then the rate increases to 3%. At £500,000.00 the rate increases to 4% and for properties with a price of over £1m the rate is 5%.
There are some exemptions for first time buyers and for properties in depressed housing areas – we can advise if you qualify for any of the exemptions or reliefs available.
This is the date on which you entitled to move into the property. It doesn’t matter whether you actually move in on that day, but it’s the day on which your ownership of the property starts.