Conveyancing Process

Residential Property

There are various words or phrases commonly used by conveyancers and it may help you to have a list of these and their meanings.

Breach of Contract
If either party to the contract fails to do something that the contract requires they will have broken one or more terms of the contract and this is known as breach of contract.

 

Completion
The date when the Seller and the Buyer are due to complete the contract for the sale and purchase of the property.

 

Contract
The document that the Seller and the Buyer will enter into to record the terms of their agreement in connection with the property.

 

Conveyancer
The person dealing with the conveyancing transaction for the Seller or Buyer or lender – the professional qualification is usually either that of a solicitor/lawyer or licensed conveyancer. Sometimes the conveyancing is dealt with by a paralegal or legal assistant who is supervised by one or other of the professionals. All Dixon Ward’s conveyancers are solicitors or FCILEx accredited, assisted by a trainee solicitor or paralegal.

 

EPC
Energy Performance Certificate.

 

Exchange of Contracts
The point at which the Seller and the Buyer become committed to the contract for the sale and purchase of the property.

 

Mortgage
The document that secures against the property the amount borrowed.

 

Net Sale Proceeds
The balance of the sale price that is left after all sums have been paid out including the redemption figure the Selling Agents commission and the legal fees.

 

Redemption
Repayment of the mortgage secured against a property and so the redemption figure is the amount to repay.

 

Survey
An inspection of the property by a Surveyor who will advise in the survey report as to the state and condition of the property.

 

Vacant Possession
To give vacant possession of a property you must ensure that all occupiers and animals have left, and all items of furniture and fixtures and fittings not included in the sale have been removed. All rubbish must also be removed from all parts of the property including garage, loft and any outbuildings.

 

Valuation
A document prepared for a lender that advises the lender of the likely re-sale value of a property being offered as security for a mortgage.

 

Deciding to sell
Before a Seller decides to sell, an EPC will be needed to market the property in accordance with current legislation.

 

Before Exchange of Contracts

In English law the Seller and the Buyer are not committed to the transaction until Exchange of Contracts. You should understand that up until this point, either party may change their minds and walk away from the transaction without liability or obligation to the other. Any money spent by either party to this point is at their risk – this includes the EPC, legal fees, survey and valuation fees and any other expense incurred in connection with the transaction. After Exchange neither party can change their mind without being in breach of contract and liable for damages for that breach.

 

What happens before Exchange
A Buyer needs to arrange his finances so that he is ready to enter into the contract. A deposit of usually not less than 5% and not more than 10% of the purchase price is payable at exchange and the Buyer will need to discuss with us how the deposit will be provided. The whole of the balance of the purchase price together with the Stamp Duty Land Tax (SDLT) and fees becomes due on Completion.

If the Buyer needs a mortgage to provide part of the purchase price the application should be made now. Before issuing any mortgage offer the lender will want a valuation of the property and credit checks will be carried out. This valuation is often little more than a cursory inspection to check the property is worth enough to support the loan.

To gain advice about the state of repair and condition of the property a Buyer will need to arrange a survey – this should be done before Exchange so that any survey problems can be considered before the parties are committed.

The Seller’s conveyancer will prepare the contract for the sale of the property and send it to the Buyer’s conveyancer with all relevant evidence of the title. The Seller’s conveyancer will also contact any lender that has a mortgage on the property to establish what sum has to be repaid from the sale proceeds.

The Buyer is entitled to be satisfied that the title is in order and that there are no technical or practical problems that would impact on the use or enjoyment of the property.

There is a quantity of information that has to be collected and supplied to the Buyer’s conveyancer at this stage. Much of this is dealt with by asking the Seller to complete question and answer information forms but the Seller’s conveyancer will also apply to the Local Authority where necessary to fill in missing information on such matters as Planning and Building Regulation approvals for construction or alteration of the property.

The Buyer is entitled to the full picture- ‘warts and all’ – and the Seller should give full and clear information. Misrepresentation or non-disclosure of some relevant matter could leave a Seller open to a claim for damages at a later date.

As well as information from the Seller the Buyer’s conveyancer will apply for local, drainage, chancel and environmental searches in connection with the property. Depending on where the property is or what shows up on the title there may be other searches that the Buyer’s conveyancer requires.

Where the property is leasehold there will be a lot more information needed to satisfy the Buyer – service charge and ground rent detail together with insurance information and repair jobs that might be coming up for instance. There is often a Managing Agent that deals with this sort of information and the Seller’s conveyancer would normally apply to that Agent for a pre-sales pack to send to the Buyer. There is usually an administration fee for this pre-sales pack that the Seller would have to pay.

The Buyer’s conveyancer will investigate all the documents supplied and consider all the information and search results on the property and will then report on those findings. The contract is agreed between the Seller’s and the Buyer’s conveyancers and will cover any particular issue that has arisen during these pre-exchange investigations.

 

Exchange of Contracts

There is no fixed date for this. When this takes place will depend on the speed of any mortgage application process, how long the authorities take to deliver search results and the speed of providing the information needed for the Buyer’s conveyancer’s investigations.

Once everything is done the Seller and the Buyer will each be asked to sign an identical version of the contract and the Buyer will be asked to provide the Buyer’s conveyancer with the agreed amount of the deposit. The completion date will be agreed – this is by negotiation, there is no fixed time period laid down.

The two conveyancers will then exchange contracts – literally the contract signed by the Seller is exchanged for the one signed by the Buyer, so that each party holds a version of the contract signed by the other party.

Exchange of contracts takes place on the telephone by an agreed formula laid down by the Law Society between the Seller and Buyer’s conveyancers. It is at that point that both Seller and Buyer are committed to buy and sell.

The agreed completion date is written into the contract at the point that the contract is dated and the deposit is paid over to the Seller’s conveyancer.

Whilst it is the Seller’s responsibility to inform the Buyer of any damage between exchange and completion, it is the Buyer’s responsibility to insure the property from the date of exchange.

 

After Exchange, before completion

Final searches on the title are carried out and the documents that transfer the property from the Seller to the Buyer and any mortgage document are prepared and signed. The amount of money needed from the Buyer to complete the purchase together with fees, SDLT and any other due payments are calculated – this will include the apportionment of ground rent and service charges payable on a leasehold property.

Final redemption figures due to any lender are requested and if there is a Selling Agent involved a commission account will also be requested from them. Statements are sent to the Seller and the Buyer with all relevant financial information and in good time for payments into the conveyancer’s client account to be arranged. The Buyer’s conveyancer will apply to the lender for any mortgage money that the Buyer is taking up and will ensure the money arrives from the lender in time for completion.

Dixon Ward requests that monies are paid into our account the working day before the Completion Date to avoid any complications on the Completion Date.

The Seller will be asked to verify the bank account details provided at the outset as to where the net sale proceeds should be sent on completion.

The conveyancers do not visit the property and a Buyer should make a final inspection if it is felt that this is necessary.

 

Completion

All money due to the Seller to complete the purchase of the property is paid by the Buyer’s conveyancer to the Seller’s conveyancer and the transfer and any mortgage documents are dated.

The Seller’s Agent, where there is one, will be holding keys which will be released to the Buyer once all due money has been paid. Where there is no Agent, alternative arrangements will be agreed. The Seller’s conveyancer will pay the Selling Agent the due commission and will repay any sum due to discharge any mortgage on the Seller’s property. The net sale proceeds will be sent to the Seller’s bank account.

 

After completion

The Buyer’s conveyancer will register the Buyer’s title to the property at the Land Registry and send copies to the Buyer.

Where there is a mortgage the Buyer’s conveyancer will comply with the requirements of the particular lender and either send original or copy documents to the lender to evidence that the mortgage has been completed and is registered against the title.

Where the property is leasehold there are often additional administrative requirements to give notice of the transfer of the leasehold title and deal with the transfer of shares in Residents or Management Companies and this will all be dealt with at this stage before the file is closed and archived.

 

Related matters

  • If you are buying a property with someone you are not married to, you may need a deed of trust to record your separate shares in the Property so as to avoid disputes in the future.
  • When you buy a property you should consider making a Will or updating an existing one.

 

 

This document is for general information only and is not intended to provide legal advice. Dixon Ward accepts no liability in connection with any loss suffered as a result of reliance on the information contained in this Fact Sheet.

Our Residential Property team

Dixon Ward | Residential Property | Commercial Property | Ruth Muthoni | Our Story

Ruth Muthoni

Property department
[email protected]

Dixon Ward | Residential Property | Commercial Property | Surina Cohen

Surina Cohen

Property department
[email protected]

Dixon Ward | Residential Property | Joanne Wheeler

Joanne Wheeler

Property department
[email protected]

Dixon Ward | Residential Property | Commercial Property | Viginie Drake

Virginie Drake

Property department
[email protected]

Sukhvir Sura

Property department
[email protected]

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