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Conveyancing

Conveyancing is the name given to the legal procedure by which freehold or leasehold or commonholdproperty is transferred from one person to another. We explain below the main steps in this procedure as it applies to residential properties.

If you hover over the highlighted words you will be able to see an explanation of these words.

The procedures for commercial properties are often similar to those for residential properties but it is difficult to generalise. If you wish us to deal with a commercial property matter, or a business transfer, then please contact us to make an appointment so that we may discuss the case with you.

Preliminary Negotiations

  1. Before marketing the property, the Seller obtains an Energy Performance Certificate (EPC) regarding the property. This is then supplied to interested Buyers by Estate Agents marketing the property.
  2. The Seller and the Buyer, with the help of the Estate Agent, agree the purchase price of the property.

  3. The Buyer applies to a building society or bank for mortgage finance if required.
  4. At the same time the Buyer and the Seller each instruct their respective lawyers to start work by completing and returning the appropriate information questionnaires.
  5. In leasehold cases, a considerable amount of extra information is required from the Landlord and/or Management Company and a fee is usually payable to the Landlord/Management Company for such information. To speed the process, the Seller must provide funds for the appropriate fee so that the Seller's lawyer may obtain all required information as quickly as possible.
  6. The respective lawyers will not usually carry out a physical inspection of the property.
  7. The Buyer must decide whether or not to have his own valuation or survey of the property carried out by an independent professional surveyor and if he decides to do so, he should instruct the surveyor.
  8. If the Buyer requires a mortgage, he should prepare his mortgage application and submit it to the lender.

Before Exchange of Contracts

  1. The Seller's lawyer obtains the property title deeds from the Seller, or the Seller's mortgage lender, and then sends the contract and property information forms and copy title deeds to the Buyer's lawyer.
  2. The Buyer's lawyer checks these and contacts the Seller's lawyer regarding any outstanding points by sending a set of pre-contract enquiries to the seller's lawyer to deal with.
  3. Sometimes there is a defect in the title deeds eg breach of covenant regarding the property, flying freehold, lack of a legal right of way to all or part of the property etc. If such defects cannot be rectified then very often the solution is for the lawyers together to arrange defective title insurance from a specialist title insurance company. Such arrangements must be agreed by the parties and the insurance company in principle before exchange of contracts.
  4. The Buyer's lawyer applies for and receives the result of the local search from the Local Authority or search agent and carries out any other necessary searches including the drainage and water search, environmental search and sometimes further searches relating to flood risk and ground stability issues.
  5. Meanwhile the Buyer continues with the mortgage application, if required, and will arrange a mortgage valuation or survey of the property. The mortgage offer is made by the lender. If the Buyer receives a copy of the valuation prepared by the mortgage lender's surveyor, then the Buyer must send a copy of it to his lawyer so that the lawyer may check any legal points contained in the report (if any). The lawyer is unable to check non-legal points as he/she has no expertise in regard to such matters.
  6. The Buyer's lawyer reports to the Buyer on the contract and other documents. The Buyer and the Seller sign the contracts in readiness for exchange of contracts and the Buyer pays the deposit to his lawyer. The contract is not yet binding.
  7. Remember the Buyer's lawyer is not a surveyor or building or environmental expert and any non-legal points arising from any reports or surveys will need to be clarified with the appropriate experts. This must be done before exchange of contracts.
  8. Very often the valuation or survey will reveal that building repair works are required at the property and the parties must negotiate, often through the Estate Agents as to who is to bear the cost of such repairs and very often quotations will have to be obtained. All these issues must be resolved before exchange of contracts.
  9. If there are any occupiers of the property living with the Seller who are not legal owners of it, then appropriate consent to contract forms must be signed by such occupiers confirming that they will in due course vacate the property on the completion day. Often such occupiers may require to receive separate legal advice from a lawyer not involved in the transaction.
  10. Before exchange of contracts, the Buyer should make buildings insurance arrangements to take effect immediately on exchange of contracts. If there is no mortgage, then the Buyer is free to make whatever buildings insurance arrangements he or she wishes. If there is a mortgage, then the buildings insurance will either be arranged by the mortgage lender or the lender will consent to the Buyer making his own buildings insurance arrangements. In the latter case, the buildings insurance arrangements must comply with the strict requirements of the mortgage lender (details of which the Buyer's lawyer will supply to the Buyer to assist him to make the correct arrangements). Details of the buildings insurance arrangements must be submitted by the Buyer to his or her lawyer before exchange of contracts.
  11. If the Buyer is having a mortgage and is purchasing the property in his or her name but on the basis that someone else will also be living at the property, then before exchange of contracts it is necessary for that other person to sign a consent to mortgage form provided by the mortgage lender.  This consent form confirms that the occupier must vacate the property if the mortage company repossess it.  It is usually necessary for such occupier to receive separate advice from another lawyer and there may well be a small fee to pay to that lawyer for the separate legal advice. It is not permitted for the lawyers acting for the Seller and the Buyer to provide such independent advice.
  12. In relation to investment properties, the Seller and Buyer should, before exchange of contracts, consider any tax implications regarding the transaction. If necessary, they must obtain expert advice from accountants.
  13. Nothing is yet legally binding. Either party may withdraw. Therefore it is very unwise now to make final/definite arrangements regarding the move eg removal vans, ordering of furniture, notice to existing Landlord, work arrangements, holiday booking. Before exchange of contracts, nothing is legally binding and no formal completion day is fixed.
  14. If it is a requirement of the mortgage company that some form of insurance policy (life/critical illness/redundancy policy) be linked to the mortgage or if the Buyer wishes to take out such insurance (even though it is not a requirement of the mortgage company) then the Buyer must make sure that the proposals/applications for such insurances have been processed and accepted by the insurance companies concerned before exchange of contracts so that cover/risk under such policies will be commenced by the insurance companies immediately on exchange of contracts.  Likewise the Buyer must be ready to start buildings insurance on the property from exchange of contracts - the Buyer must insure from exchange of contracts.

Exchange of Contracts

  1. Exchange of contracts takes place between both lawyers by telephone and the completion day is then fixed. If there is a chain of linked transactions then exchange of contracts will take place on all of the transactions by a series of telephone calls between lawyers on the same day
  2. The Buyer's lawyer pays the deposit to the Seller's lawyer at exchange of contracts.
  3. The Buyer immediately commences buildings insurance on the property.

Between Exchange of Contracts and Completion

  1. The Seller's lawyer makes arrangements to pay off the Seller's mortgage on completion day and to settle the Estate Agent's account.
  2. The Buyer's lawyer carries out final pre-completion searches and the Buyer's lawyer and the Seller's lawyer arrange for all parties to sign the Deed of Transfer.
  3. The Buyer's lawyer receives mortgage funds and collects from the Buyer any further sum required for completion. The majority of lenders require a minimum of 7 clear days notice in writing before being able to release mortgage funds to the lawyer.
  4. The Buyer and the Seller make removal arrangements and apply for transfer of services (eg gas, electricity etc) to take effect on completion day.

Completion Day

  1. The Buyer's lawyer sends the purchase money to the Seller's lawyer by bank transfer and on receipt, the Seller's lawyer releases the keys to the Buyers, either directly or through the Estate Agents. The Estate Agents will not release the keys to the Buyer until they a receive a telephone call from the Seller's lawyer confirming that the purchase money has safely arrived in the Seller's lawyer's bank account.
  2. The Seller moves out and the Buyer has the right to move in.

After Completion

  1. The Seller's lawyer sends the title deeds to the Buyer's lawyer who then deals with the Stamp Duty Land Tax formalities at HM Revenue & Customs and registration of title procedures at the Land Registry.
  2. When the Stamp Duty Land Tax and registration of title procedures have been completed, the Buyer's lawyer will send the title deeds to the Buyer's mortgage company or, if there is no mortgage or if the mortage company does not require to keep the deeds, then, directly to the Buyer.
  3. The parties should review arrangements that they have made in relation to their Wills with their respective lawyers.

  

If you would like us to quote for your conveyancing, please request a quote.

Confused about legal terminology? - see links in the text above