Conveyancing guide

• The first stage, from when an offer is accepted, up to EXCHANGE OF CONTRACTS.

  Before exchange of Contracts, the seller or buyer can try to re-negotiate the price, sell to someone else, buy a different property, or just decide not to sell or buy at all. Each seller or buyer is responsible for paying their own survey, legal or other fees. So if, for example, the owner of the house you want to buy changes his/her mind before exchange of contracts, you have no legal right to claim from him/her the cost of (for instance) the survey that you had done, or your conveyancing fees.

• The second stage, from EXCHANGE OF CONTRACTS to moving day, called COMPLETION.

  Once Contracts have been exchanged, both seller and buyer are legally committed to the sale and/or purchase, the price is fixed, and the completion (moving) date is fixed. If seller or buyer then tries to change the terms of the deal without the agreement of the other party, then they are in breach of the conveyancing Contract and can face expensive legal action.

• Your survey might reveal that the charming 17th century cottage you want to buy is riddled with damp, woodworm and subsidence and about to fall down at any minute.
• We might find out that the local authority are planning to build a new road which will go straight through the garden of the property you want.
• We may find that the accessway to the property you want is in fact owned by someone else, who doesn't want anyone else crossing it!

If anything like this happens, then all you have to do is to tell the Estate Agents that you've changed your mind.

• The legal conveyancing work your Solicitor does, does not involve any checks on the structural state of the property. Houses and flats, like almost any other second-hand item, are 'sold as seen', it is up to the buyer to ask questions and make checks before buying, and it is difficult to make any claim afterwards. The only way to check properly the condition of the property is to have a survey carried out. We recommend that you always have a full structural survey, and get quotes for any work that the surveyor recommends. This may cost you a few hundred pounds, but a structural problem could easily cost you several thousand (perhaps even tens of thousands), so this is money wisely spent.
• DO NOT rely on
  • your lender's survey. Firstly, it is NOT a true survey - it is a valuation, and is only done to check that the property is enough security for the amount you want to borrow (NOT what it is worth). Secondly, it is done for the lender and not you, so the surveyor who does it is only answerable to the lender. ((S)he may, however, be able to carry out a separate survey for you while (s)he is at the property. Ask)
  • anything the owner says. There may be defects that the owner does not know about, or might want to gloss over.
• Most surveys seem very worrying the first time you read them. Remember that the surveyor's job is to be thorough and point out every defect. At the end of the survey, the surveyor will state what sort of general condition the property is in, and whether the price is reasonable. Read that first!
• The survey may state that some work needs to be done. No property, especially an older one, will be in absolutely perfect condition, but if the required work will cost more than a few hundred pounds, then you may have a good reason to ask for a price reduction. Speak to the Estate Agent about this.
• If the result of the survey is really bad then you may not be able to obtain a mortgage on the property. Even if you can afford to pay cash, remember that it may be difficult to sell.

• There are many different kinds of mortgages available. We do not give mortgage advice - this is a job for a financial adviser. Please bear in mind that many financial advisers have arrangements with only one company and only recommend that company's products. You may prefer to consult an independent adviser. What you need is a written mortgage offer. Agreeing a loan 'in principle' is not enough.
• Your lender will have to:-
  • have their surveyor check the property (see Survey)
  • usually obtain written confirmation of your income
  • check that you're not seriously in debt
• This process can take a few days or several weeks. If you think that it is taking too long, speak to your lender, or whoever is arranging your mortgage. We do not usually have any contact with your lender until they issue the written offer. When you receive the written offer, you may need to accept it, by signing one copy and returning it to the lender. If you haven't already done so, make sure that you will have enough money to complete your purchase (and any sale) - do not forget stamp duty and all the other conveyancing costs, estate agents' fees, and removal expenses. Please read the mortgage offer carefully - quite often, various amounts are taken off the loan before the lender actually pays it over to us, so the amount we receive is often less than the full amount of the loan (on which you will be paying interest). The most usual deductions are usually the first year's household insurance, the first month's interest, a 'high loan to value' fee or a retention. Remember to take these deductions into account in your financial calculations. When the mortgage offer is issued, your lender will send details of it to their Solicitors and ask them to do their conveyancing work. Usually, your lender will ask us to do the conveyancing work for them, which makes sense, because it is the same kind of legal work as we do for you. Some lenders insist on using their own separate Solicitors - this costs you money (because your lender will expect you to pay their Solicitors' bill) and tends to slow the conveyancing process down, because we have to deal with your lender's Solicitors as well as the seller's Solicitors.

• Before exchange of contracts

  On Your Sale	On your Purchase
  Prepare the legal paperwork or a Home Information Pack (HIP) (if this has not already been done)	Receive the draft Contract, HIP (if needed) and other legal documents from the seller's Solicitors
  Prepare and send the draft contract, HIP (if needed) and any other legal documents to the buyer's Solicitors	For non-HIP properties, make the preliminary searches, check them when received and ask any questions
  Answer any other questions asked by the buyer's Solicitors - we may need your help	Check the legal paperwork and ask any questions.
  Receive one copy of the Contract back from the buyer's solicitors	Receive and check the replies to any questions asked on the legal paperwork
  	Receive and check details of your mortgage from your lender
  Agree with you any unusual provision regarding the deposit	Agree the amount of the deposit and obtain this from you (if necessary), and clear it through our account
  Have you sign the sale Contract	Report to you on all the legal aspects, enclosing the Contract and other documents for signing, pointing out any unusual matters, and receive the signed documents back from you
  Agree a completion date	Agree a completion date
  Exchange Contracts	Exchange Contracts

• After exchange of contracts

  On Your Sale	On your Purchase
  Get repayment figure from your Building Society or Bank and details of commission from your Estate Agent	Make sure the property is insured
  Have you sign the Transfer Deed (if not already done)	Make further searches against the title and against you (see below)
  	Have you sign the Mortgage Deed and obtain any funds required from you (we may well have done this before exchange)
  	Prepare the Transfer Deed for the seller to sign (we usually do this before exchange)
  	Request the mortgage money from your lender (this needs to be done in writing)
  Receive the sale money and complete the sale	Pay the purchase money and complete the purchase
  Send Deeds to buyer’s solicitors	Pay the stamp duty, receive the stamp duty certificate and register the Deeds
  Pay off your old mortgage and pay the Estate Agents fees	Complete the paperwork on any Life Policies
  Pay any balance to you	Send the Deeds to you or your lender

• The law has changed recently, and you now need a Home Information Pack (HIP) in order to sell any property put on the market after 14/12/2007. For this reason you should always find a Solicitor to 'act' (work) for you as soon as you consider moving. Most of the HIP's contents are the legal paperwork that conveyancing Solicitors have been preparing for a long, long time, so we have much greater experience in doing it than almost any other HIP provider. There is another very important reason for using us to prepare your HIP. Most of the other HIP providers claim to offer 'free' HIPs, but if you read the small print you will find that the HIP is only free as long as you continue to use them; if you decide to stop using them you will have to pay for it. If we prepare it for you, not only do you have our expertise, but the HIP is yours, and you can use the selling agent of your choice, which means that you can 'shop around' for the best 'deal'. To prepare the HIP we must have the Deeds to your property, or at least an 'office' (official Land Registry) copy of them. If you have no mortgage, please arrange to let us have the Deeds as soon as possible. If they are with someone else, for example your Bank or another firm of Solicitors, they will need your written permission (not ours) before they send them to us. If you have a mortgage please let us have the lender's name and address, and the account number (this is important) as soon as possible. Your buyer's Solicitors will need various information about the property, so we shall send you some conveyancing forms containing some questions about the property, for you to fill in and return to us. These forms are part of the legal paperwork on your sale. Please read them carefully. If you do not know the answer, you can simply write 'don't know'. Occasionally we are asked to send Contracts to two or more buyers at once. If more than one person is interested, it is generally best to decide who is the 'better bet', and proceed with one buyer at a time. If we do send out more than one Contract at once, we are required by the Law Society to tell all the buyers' Solicitors that this is what we are doing.
• Your buyer's Solicitors will check the legal paperwork, and may ask some more questions of their own. If they do, then we may need your help to answer them. One area in conveyancing which can cause difficulties is agreeing what fixtures and fittings are to be left or taken. Anything which is fixed to the property, and could really be considered to be part of the property, is a fixture, and the buyer is entitled to assume that it will be left at the property, unless you state clearly that you will be removing it. If you remove a fixture without saying so before exchange of Contracts, or without the buyer's permission, you are probably in breach of the conveyancing Contract. If your property is leasehold (a flat or maisonette) we will need an up-to-date copy of your buildings insurance policy, and details of your ground rent payments and any service charges you have paid, including copies of the last few years' accounts. If you do not have these, we can obtain them from the freeholder or managing agents, but this may take a little while.
• When we send the conveyancing paperwork to the buyer's Solicitors, we send two copies of the draft Contract. The buyer's Solicitors will make any amendments they think are necessary, and then they return one copy to us. If we accept their amendments we shall then send the Contract to you for signing.

• It may take a short period of time for us to receive the legal paperwork from the seller's Solicitors, because (like us) they have to obtain the Deeds to the property you are buying before they can prepare the papers.
• The preliminary searches on the property you are buying are made by us. (When HIPs come into full force the seller's solicitors will make them, but they will still be checked by the buyer's solicitor). We will tell you the amount of all the preliminary conveyancing searches and how much we need from you in order to start them. We ask you to pay this 'up front' rather than pay it ourselves because it helps us to keep our legal fees lower. The local authority search will show; * Planning matters which can be enforced against the owner, such as tree preservation orders, compulsory purchase orders or listed building orders. If the property is in an urban area there may be a smoke control order, making it compulsory to burn only smokeless fuel. * Whether the road outside the property is maintained by the local authority or privately, and usually the same information about the drains. * Whether any road building or widening proposals affect the property. * Planning applications made in respect of the property, and the results. The search does not reveal planning applications in the area in which the property is situated. The seller will be asked whether he knows of any, but (s)he can only answer to the best of his/her knowledge. If, for example, the house you want backs onto open land, you should ask us to check specifically with the Council whether they have received any planning applications for the open land (they may charge a small additional fee for this). You can always visit the local planning office and inspect plans of the area if you wish. The plan will show pending applications throughout the area and you can get copies of any that interest or concern you. We usually need other searches too - the most common ones are; * an environmental search * a chancel repair search * a mining search The environmental search reveals for example; * whether the area where the property is, is listed as contaminated land * whether the area is at risk from flooding, shallow mining, radon gas, coal mining or natural subsidence * whether there is any history of industrial land use, landfill sites, waste treatment sites, fuel stations, or pollution incidents in the area Although the environmental search is a search we should make for you, you will need to refer anything you are concerned about to a surveyor, as conveyancing solicitors do not usually have expertise in environmental issues. The mining search is only made if the property is in an area where mining has taken place. It reveals whether there are underground mines which might cause problems with subsidence, and whether there are any past or present compensation claims for subsidence. Chancel repair liability is liability to contribute towards the cost of repairs to the Anglican church building for the parish where the property is. The church building can actually be many miles from the property.
• If, when we check any of the conveyancing paperwork, we consider that there is a serious problem, we will let you know immediately. (If we find that the title to the property you want to buy is still unregistered, this is not a serious problem, but we may have to charge additional conveyancing fees, which we will agree with you first. At this stage it may help if we quickly explain the difference between registered and unregistered land. Until 1925 all land in England and Wales was unregistered. If land is unregistered, then the only way to check whether the seller really owns the land (and so is entitled to sell it to you!) is to examine all the Deeds for (at least) the last fifteen years. However, it is often necessary to go back much further than that, and the process can be very complicated and time-consuming. At the beginning of this century the Government set up a Land Register, which will eventually show who owns all the land in England and Wales, together with all rights or obligations affecting each piece of land. Since 1990 it has been compulsory for all unregistered properties in England and Wales to be registered as soon as they are sold. What this means is that the title to registered land is guaranteed by the Government, and this makes a conveyancer's job less time-consuming.)
• The conveyancing Property Information Forms are sent to us by the seller's Solicitors. These deal with such things as
  • Who is responsible for the boundaries
  • Neighbour disputes
  • Whether any alterations have been carried out (they might require planning or building or other consent)
  • Which fixtures and fittings will be left or removed

  You should ask us about anything that particularly concerns you. If you are moving to a new area, it is a good idea to have the local papers sent to you to see whether there are any local issues you might want to ask about.

• When the conveyancing paperwork has been received and checked, we will report to you on it in writing, and enclose the contract and other documents for you to sign.

• Why does a deposit have to be paid at all?

  If your buyer does not complete on the date in the Contract, you have the right to sue for breach of contract, claiming compensation for all your losses and expenses. However, if your buyer disappears and cannot be found (and this has happened) this right is of little use to you. Conveyancing Contracts therefore state that on exchange the buyer pays a fairly large deposit, and that if the buyer does not complete, the seller is (in certain circumstances) entitled to keep the deposit, so that the deposit acts as a guarantee that the buyer will complete.

• How much deposit will I have to pay?

  Most Contracts provide for the payment of a 10% deposit, but often a smaller sum, very often 5%, can be agreed. This is usually on condition that if you fail to complete on the agreed date you have to pay the full 10% at that time.

• Can I use the deposit that my buyers will pay me?

  Contracts now allow the seller to use your deposit for his/her own purchase. This does carry the risk that if the seller becomes bankrupt after exchange of Contracts but before completion, you might lose your deposit. In practice, this is not at all common. You are allowed to use the deposit only as a conveyancing deposit for the property you are buying. We cannot send any part of the deposit to you personally before completion unless the buyer particularly agrees to this.

• You will have to

  • Where necessary, sign the Mortgage deeds and a Transfer deed
  • Supply details of any life policies to be used in connection with your mortgage - this is important as your lender may not send the mortgage money without them.

• You should also

  • Arrange your removals
  • Tell the local authority and water board the date on which you are moving out, so that they can bill you to that date, or arrange a refund if you have paid in advance.
  • Tell the electricity, gas and telephone authorities that you are moving and arrange for the meters to be read on the completion date.
  • Tell everyone else of your change of address (bank, doctor etc.) You are required by law to have the address on your driving licence altered.
  • Make arrangements to hand over keys, preferably through the estate agents.