A guide to Legal and conveyancing

By Nicholas Estates, Ipswich Branch

Conveyancing process explained: For Buyers

This is a guide explaining what “conveyancing” is and what is involved in the conveyancing process when buying a home. Conveyancing involves legally transferring home ownership from the seller to the buyer. The process starts when your offer on a house is accepted and it finishes when you receive the keys. Understanding what is involved will help ensure there are fewer surprises along the way.

Who does the conveyancing?

A solicitor or conveyancer usually conducts the conveyancing process, but it is possible (although difficult and is something we would not recommend) to do your own conveyancing, as long as you are not taking out a mortgage.

First stages

  1. The first step towards purchase is to find a solicitor or conveyancer and “instruct” them to do this process for you (this is if you are not inclined to undertake the conveyancing yourself).  Ask for a quote and use this to shop around for the best price and service.  For more on the difference between solicitors and conveyancers, see Finding the right solicitor or conveyancer?
  1. Your conveyancer will then draw up a draft contract or terms of engagementwith you, setting outtheir charges and deposits required.
  1. Your solicitor will write to your “sellers” solicitor to confirm they are instructed and request a copy of the draft contract, together with any other details, such as the property’s Title and the standard forms.

 

Legal Work

  1. Your solicitor will examine the draft contract and all supporting documents and raise enquirieswith the seller’s solicitor. You will be asked to go through the forms the seller has completed and let the solicitor know if you have any queries or concerns. In particular, you will want to confirm the tenure of your new home:  is it Leasehold or Freehold?

If Leasehold, you must ask your solicitor to check the length of the lease, any Lease with less than 80 years may be a problem and can be costly to extend.  To extend the term of the Lease you need to have owned the property for 2 years before you are eligible to do so. Leases under 60 years are best avoided.

  1. Property searches. There are things you may not know about the property just from viewing it with estate agents, or even having had 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, others will be required by the mortgage lender to protect them from any liabilities that the property may have:

  • Local Authority Searches:  for example are there any plans for a motorway in your new garden? How about radioactive gas? This Search 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 may also be 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 be affected by 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 and this will cost around £20 or so. The laws around Chancel Repair changed in October 2013, this means that 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 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, also Cheshire Brine Searches
  • Additional Local Authority questions such as Public Paths, Pipelines etc.
  • Noise Abatement Zones, Common Land, etc.

 

Your mortgage

  1. Preferably before you begin your search for your new home, or, once you have had an offer accepted you will need to have a mortgagein place. For independent mortgage advice across the whole market our specialist in-house adviser will be more than happy to discuss your needs.  He will not only save you time but could also save you money in the long term by taking into account your individual circumstances.   This will include ensuring you have the financing available for a mortgage deposit. Your solicitor will receive a copy of the mortgage offer and go through the conditions. For further information on mortgages, see Mortgages made simpleand What type of mortgage should I get?
  1. You will need to have a mortgage valuation. This is carried out on behalf of the mortgage company, this way they are assured that the property provides sufficient security for the loan. You normally have to pay for this, but some mortgage companies may carry this out for free, mainly to attract business.
  1. You may want to have your own surveysdone.  Whether this would be a Homebuyer Survey or a full Building Survey, whatever you choose will depend on the property you are purchasing and/or your specific circumstances. See What sort of survey should I have?
  1. Before Exchange of contracts can take place your lender will require you to get Buildings Insurancefor your new home. You are responsible for the property as soon as contracts have been exchanged so it is in your interests put this in place.

Signing Contracts

  1. Signing the contract.Since receiving the draft contract from the sellers solicitor, your solicitor will have been in correspondence with you about what is covered. Before signing the contract your solicitor will need to ensure:
  • That all enquiries have been returned and are satisfactory.
  • That fixtures and fittings included in the purchase are what you expected.
  • A completion datehas been agreed between the two parties, which is usually 2 to 6 weeks after exchange of contracts
  • That you have made arrangements to transfer your deposit into the solicitors accountso that it is cleared in time for an Exchange. You may want to negotiate the size of the deposit, which is normally 10% of the value of the property. However even if you agree to pay less than 10% you are still liable for 10% of the value of the property if you later pull out of the agreement. Therefore if you pay a 5% deposit and pull out of buying the property you will not only lose your deposit but also legally owe an additional 5% of the value of the property
  1. Go to the property with the estate agent, taking the fixtures and fittings inventory list to ensure that everything you paid for is still there and the house has not been damaged in any way.

Exchanging contracts

  1. You and the seller will agree a date and time to exchange contracts at any time on any given day.
  1. Your solicitor will exchange contractsfor you. This is usually done by both solicitors/conveyancers reading out the contracts over the phone (which is recorded) to make sure the contracts are identical, and then immediately sending them to one another in the post.
  1. If you are in a “chain” your solicitor/conveyancer will do the same thing, but will only release the contract if the other people in the chain are all happy to go ahead. This means if one person pulls out or delays, then everyone in the chain gets held up.
  1. Once you have exchanged contracts you will be in a legally binding contract to buy the propertywith a fixed date for moving. This means that:
  • If you do not complete the purchase, you will lose your deposit and owe the seller more if the deposit was less than 10%.
  • The seller has to sell, or you can sue them.
  • The seller can no longer accept another offer (you no longer need to worry about being gazumped).

 

Between exchange and completion

  1. Your solicitor will lodge an interest in the property, meaning that the Deeds to the property are frozen for 30 working days, allowing you to pay the seller and lodge your application to the Land Registry for transfer of the Deeds into your name.
  1. The seller may move out during this period, although this may not happen until the day of completion.
  1. Once you are sure of the completion date you should organise your removal company, or if you are doing the removal yourself transport for your possessions (and as much help as possible).
  1. The solicitor will send you a Statement showing the final figure to pay, which will need to be cleared into your solicitors bank account at least one day before completion.

On completion day

  1. All things being equal, completion is normally set around midday on the specified date, although in practice completion actually takes place when the seller’s solicitor confirms they have received all the monies due. Once this is done the seller will arrange to either drop the keys at the estate agents for your collection, or for you to collect from them at the property. You can then move in.

After completion

  1. Your solicitor will tie up some loose ends:
  • Pay Stamp Duty Land Tax on your behalf.
  • You will receive your legal documents about 20 days after completion, after your solicitor has sent them to the Land Registry.
  • Send a copy of the Title Deeds to your mortgage lender, who will hold them until you pay your mortgage off.
  • Notify the freeholder if the property is leasehold.

Give you a bill for their payment, if this has not already been done.

  1. You should collect together all your paperwork from the purchase of your new home, including the estate agent’s brochure, to file away and keep safe for when you move again.