Residential Conveyancing
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For most people buying or selling their home is the largest transaction they are likely to undertake. Our aim at Adams Harrison is to make the conveyancing process as smooth and as stress free as possible having regard both to your desire to move quickly with the minimum of fuss and the need to investigate matters fully to protect your long term property and financial interest.
Many people are unfamiliar with the conveyancing process, and we appreciate that even those who have experienced it may be unaware of what actually happens, or even question why it is necessary. We have therefore set out below a brief guide by way of explanation.
- Conveyancing – why do we need it?
- What does conveyancing involve?
- Pre-contract
- Pre-completion
- After completion
- Glossary of technical terms
1. Conveyancing – why do we need it?
Buying and selling land is unlike buying and selling goods from a shop. Land is always there. We cannot make new land and it does not wear out and need replacing. Over the period of its existence many rights and liabilities may have been created over a piece of land. Most of these cannot be seen by inspecting the property. Examples include rights of way or rights for services (drainage, water, electricity etc) in favour of neighbours, rights of tenants or other occupiers (whose existence may not be apparent when you inspect the property), or obligations or restrictions in respect of land such as obligations to maintain, or to contribute to the maintenance of, boundaries, or other structures and services. Property may also be subject to restrictions preventing you from using it for a particular purpose, or even for building on it or extending or altering any buildings already on it.
Property can also be subject to public rights such as rights of way or obligations and restrictions imposed by public bodies, such as obligations to meet the costs of making up a road, compulsory acquisitions or planning restrictions.
There are therefore many issues which need to be considered apart from the obvious question - does the seller own it or does he have the right to sell it? It is your solicitor’s duty to investigate and establish whether such title issues exist and to advise you about them.
Conveyancing is the name given to the process of investigating and transferring land. In this process the solicitor’s overriding obligation is to protect his or her client’s interest.
2. What does conveyancing involve?
There are three main stages in a standard residential conveyancing transaction. They are as follows:-
a. The first stage involves initial investigations carried out by the buyer’s solicitors and the preparation of the contract and the proving of title by the seller’s solicitors. This includes agreeing the final form of contract for the sale/purchase.
b. The second stage, which takes place after exchange of contracts but before completion involves final searches and the preparation of the final documentation.
c. The third stage involves filing your Stamp Duty Land Tax return with the Inland Revenue, paying any Stamp Duty Land Tax due and registering your title at the Land Registry.
3. Pre-contract
Buyer
This starts once you have made an offer for a property which has been accepted. This is the most important part of the transaction and is by means a formality. We will make the preliminary searches and raise preliminary enquiries and we will consider the responses we receive. If necessary we will call for additional information or documents. We will consider the draft contract and we will investigate the seller’s title to the property. We will write to you reporting what we have discovered in the form of a comprehensive report. We will refer you to relevant rights and restrictions and highlight any unusual issues which may have been revealed. We will also check that you have the funding available and correspond with your lender to clear any outstanding mortgage conditions, and where you have a related sale we will correspond with your buyer’s solicitors. Once you are happy with the report and we are happy that the funding is available (and where you have a sale that the sale is ready to proceed too) you will be required to sign the contract to allow exchange of contracts to proceed.
Seller
You are selling your house and you have accepted an offer. We will need to send a contract to your buyer. Before we can do this we will need sight of your deeds to check your title. If we have not acted for you before you will need to send us the deeds or tell us where they are.
Once we have the deeds we will prepare a contract and send it with evidence of your title to the buyer’s solicitors. We will also take your instructions on enquiries raised by your buyer’s solicitors about the property. The buyer will also undertake preliminary searches.
Once the buyer’s solicitors have concluded their investigations they will approve the contract and we will arrange for you to sign it. We will then exchange contracts which will commit you legally to the transaction and fix the moving or completion date. We will of course check that the completion date is acceptable for you and others involved in the transaction before we proceed.
It is important that you instruct us at an early stage. The sooner we are involved the quicker the contract and other documents can be prepared and sent to the buyer’s solicitors.
4. Pre-completion
This is the period in which the transfer and mortgage documents are prepared and signed. As a seller you will need to sign the transfer before completion, and as a buyer you will need to sign the mortgage before completion. Final searches are also undertaken at the Land Charges Department, the Land Registry and if necessary Companies House. This needs to be done immediately before completion.
Having a completion date to work to we will request the mortgage money from your lender (when you are buying) and obtain details of the amount owing on your existing mortgage (when you are selling). We will prepare a financial statement and request any money we need from you. On completion, where you are selling, we will receive the purchase money from your buyer’s solicitors and where you are buying we will pay the purchase price to the seller’s solicitors. At this stage the house is yours and you are entitled to occupy it.
5. After Completion
After completion we will repay any mortgage loans on the house you are selling and pay your estate agent as well as accounting to you for any money due to you. Where you are buying we will pay any Stamp Duty Land Tax due to the Inland Revenue and register you as the new owner at the Land Registry. Having made allowances for these payments we will account to you for any balance due.
Once you are registered as the new owner we will send you a copy of the Land Registry information. If your lender wishes to have the title documents we will send them to the lender. If they do not we can look after them here free of charge which means that they are immediately available to allow us to prepare contract papers when you decide to sell.
6. Glossary of technical terms
exchange of contracts
This is the physical exchange of the two copies of the contract, one of which has been signed by the buyer and the other of which has been signed by the seller. This is the point from which the agreement by the buyer to buy the property and the seller to sell the property become legally enforceable one against the other.
completion
This is the date, fixed in the contract, for the transfer of ownership. It is the date on which the seller must move out of the property and the date on which the buyer may move in. It is also the date on which the buyer pays and the seller receives the purchase price.
registration of title
All land is either registered, i.e. ownership is recorded at the Land Registry and each separate property is allocated a title number, or unregistered, i.e. proved by producing the deeds showing the history of ownership ending with the seller. The law now requires, in all cases, that where ownership of unregistered land is transferred it must be registered. The Land Registry is a government department. Registered land enjoys a government guarantee. For more information you can visit the Land Registry website at www.landregistry.gov.uk.
preliminary searches
This used to involve one search which was the local search. The local search is now only one of a number of searches which as your solicitors we may need to carry out to ensure that the property is not adversely affected by a range of issues.
local search
This is the standard preliminary search of the local Land Charges register and includes standard enquiries of the district council. It covers matters such as road charges, whether the property fronts a public road, whether there are proposals for new roads or road widening schemes near the property and whether there are planning issues which directly affect the property. There are optional enquiries about footpaths, pipelines and certain other issues. The local search only provides information about the property itself. Apart from road proposals it will not reveal neighbouring developments which may affect the property.
drainage search
This used to be part of the local search but is no longer. It provides information about the water supply and surface and foul water drainage for the property.
plans search
This is a more recently introduced search facility which reveals the existence of planning permissions in the area neighbouring your property which may affect the value of or the enjoyment of your property but which would not be revealed in your local search.
environment search
This is a search of various land use databases which seeks to establish whether past or present land use, on or near the property, is likely to have contaminated it. As well as contaminated land having direct or indirect health repercussions there is a statutory obligation to clear up or “remediate” contaminated land. This obligation falls primarily on the person who has caused the contamination in the first place but could fall on the owner if the original polluter cannot be found.
commons search
This is a search of the Register of Commons and Town and Village Greens. This will determine if any part of the property is subject to a "right of common". Rights of common include rights to hold a fair, the right to use the land generally for recreation and the right to graze animals.
chancel repair search
Such searches determine whether a property is subject to a liability to contribute towards the cost of repairing the chancel of a church. There are different types of chancel repair searches. Some can determine whether or not an individual property has such a liability whereas others will only determine whether or not a property lies within a parish where such a liability may exist.
preliminary enquiries
These are questions addressed to the seller about the property. They are in standard form and as your solicitor we will ask such additional questions as we consider appropriate once we have seen the papers, and such further questions we think necessary once we have seen the seller’s replies and received the results of our preliminary searches. The seller is required to answer these questions to the best of his knowledge. They cover issues such as the sharing of facilities with neighbours, disputes with neighbours, planning and building matters and formal or informal rights enjoyed by or exercised over the property.
deposit
This is part of the price which is paid when the contracts are exchanged. This is normally 10% of the price.
mortgage
This is the document which records the loan from your mortgage lender. It gives the lender certain rights over the property, such as taking possession and selling the property, which the lender can exercise if you do not maintain the mortgage loan payments.
transfer
This is the document which transfers ownership from the seller to the buyer.
conveyance
This is the name of the transfer document when unregistered land is involved.
