The Layperson’s Guide to Conveyancing

If you are a first time buyer or even if you have bought or sold a house before, conveyancing might be a bit of a mystery to you; something you have to do which involves carrying out various registry checks and ensuring the contract is sound.

This is your chance to find out what conveyancing is and, more importantly, why you need the service.

What is conveyancing?

Conveyancing is the legal process which governs the transfer of property from the buyer to the seller in a property transaction. This process begins once the seller accepts an offer on the house and ends when the keys are finally handed over to the buyer.

Can I do the conveyancing myself?

If you are buying a house, you are permitted to deal with the conveyancing yourself provided you are not taking out a mortgage on the property but unless you really know what you are doing, we don’t recommend this. It is time consuming and there are pitfalls along the way. It is better to leave it to the professionals. Suitably qualified solicitors or conveyancers will know the process back-to-front and will have the necessary experience to deal with any issues that crop up.

Make sure you know what you are buying before you even think about hiring a conveyancer. That means a thorough inspection of the property when viewing it.

I’ve hired a conveyancer. What’s next?

If you are selling your property, you can save time by finding the right conveyancer or solicitor in advance although. Then you can instruct them once you have accepted an offer from a buyer. Your solicitor or conveyancer will ask you to fill out several questionnaires. These are designed to gather all the information required to draw up a draft contract which can be sent to the buyer’s solicitor for approval. The information gathered will cover:

• Boundaries, ongoing complaints or disputes, known developments that may impact on the property, council tax, sewerage and utilities for example (TA 6 form).
• Whether or not you own the freehold and, if not, questions relating to the the leasehold or commonhold (TA 8 and TA 09 forms).
• What fittings and fixtures there are in the property (TA 10).
• Finalisation details relating to the handover of the keys, how and where you will complete, and confirmation that the house is not subject to any mortgages or liability claims (TA 13).

Honesty is the best policy

Vendors are personally liable for the information they supply using these forms. If it is later discovered, after completion of the sale, that the questionnaires have not been filled in truthfully, sellers leave themselves open to a compensation claim.

On the other hand, if the buyer discovers the information is incorrect before exchange of contracts, they will possibly lose faith in the vendor and the transaction will fall through. We advise sellers to be as honest as they possibly can and if they don’t know the answer to a question, just say so.

Drawing up the draft contract

The seller’s solicitor or conveyancer will use the information provided in the TA forms to draw up a draft contract. This is sent to the buyer’s legal representatives along with other items such as the property’s title. The draft contract forms the basis for negotiations to begin. Issues for negotiation include:

• Completion date (usually between seven and 28 days after the exchange of contracts).
• Which fixtures and fittings are included in the sale price and how much is being charged for the others.
• Whether any issues have been raised by the survey the buyer will have had commissioned. If these issues are significant, both parties need to agree who will get them resolved or they may have to renegotiate the sale price.

Mortgages

If money is still owed on the property, the seller will need to request a redemption figure from their mortgage provider. This is the amount they have to pay upon completion of the sale.

Unless they are making a cash purchase on the property, buyers need to have a mortgage in place for the transaction to happen and this will include having the financing available for a mortgage deposit. When a lender makes an offer, their solicitor or conveyancer will receive a copy of the mortgage offer to scrutinise the terms and conditions.

Mortgage lenders will require a mortgage valuation so they can be sure the property will provide sufficient security against the amount being borrowed. This is usually paid for by the buyer but sometimes the lender will include it as a free gift.

The mortgage lender will also require the buyer to take buildings insurance before an exchange of contracts can take place. This is in the buyer’s interest as well as the lenders. After all, owning a property is a big responsibility which may span many years.

Legal nuts and bolts

The buyer’s solicitor or conveyancer will examine the draft contract and supporting documents. If any issues scream out at them immediately, they will raise them with the seller’s legal team. Assuming everything looks alright on the surface, they will encourage the buyer to go through the material with a fine comb to see if they have any queries or concerns.

What should be the main concerns for buyers?

The buyer’s main concerns should be:

• The tenure of the property: is it leasehold or is it freehold? If it is a leasehold, buyers need to tread carefully, especially if the lease below 80 years of age.
• Any underlying structural or other kind of issues that they need to be aware of: the buyer’s conveyancer or solicitor will carry out legal searches to spot things that may have been missed at a viewing or even by a survey. If the buyer has applied for a mortgage, the lender may also request certain searches be carried out.
• Any local plans for development: local authority searches will uncover any developments that may impact on the property.
• Confirming that the seller owns the property: Land Registry checks MUST be carried out to establish the title register and title plan of the property, before the sale can complete.
• To establish the flood risk: this is another Land Registry check.
• How water is supplied to the property and what effect, if any, the property’s public drains might have on future extensions or building works: water authority searches.
• Chancel repair liability – yes, believe it or not, there could be leftover medieval liabilities on the property to help pay for church repairs. Some buyers opt for Chancel repair insurance but it is usually cheaper just to do the check. Since October 2013, churches are responsible for establishing and lodging liability with the Land Registry.
• Is the property built or near to contaminated land? An environmental search will look issues such as radon gas hazard, ground stability issues, contamination and detailed flooding predictions (but not as detailed as the water search.

Buyers may also be advised to carry out specific location searches, as part of the environmental search, such as tin or coal mining searches. Understanding the geology of the area can help to determine the possibility of sinkholes among other things.

Questions not included in the TA forms

The information provided by the seller in the TA forms will be comprehensive but the buyer may have other questions they want to ask such as additional Local Authority questions relating to public paths, pipelines, noise abatement zones or common land for example.

The contract

Before the buyer can sign the contract, any issues arising from the draft document need to be ironed out and the conveyancer will make sure that all the necessary checks have been carried out on the property.

If the buyer has obtained a mortgage for the purchase, the deposit will need to be in their solicitor’s account in good time for an exchange. The deposit is usually around 10% of the value of the property. Sometimes a smaller deposit is negotiated but buyers need to be aware that if they pull out of buying the property after the exchange of contracts they will still be liable to pay the 10% deposit in full.

Buyers are also advised to pay a final visit to the property with the estate agent before the contracts are exchanged just to make sure everything they are paying for is still there and the house has not been damaged in any way.

Exchange of contracts

Buyer and seller agree a date and time to exchange contracts but the actual exchange is handled by their solicitors or conveyancers who usually carry out the exchange, reading out the contracts to each other during a recorded phone call. This phone exchange is just a preliminary procedure to ensure both copies of the contract are identical so things can move forward. Once this has taken place, the legal representatives send their hard copies of the contract to one another by post.

If there is a chain, then the buyer’s conveyancer or solicitor will only release the contract if the other people in the chain are all happy to go ahead. All it takes is one person in the chain to pull out or delay and this has a knock effect for everyone else.

Once the contracts have been exchanged, both buyer and seller are legally bound to the property transaction by contract with a fixed date for moving. From this point:

• The buyer will lose their deposit if they don’t complete the purchase.
• The seller has to sell or the buyer can sue them.
• The buyer cannot be gazumped as the seller is not allowed to accept another offer.

What happens after contracts are exchanged?

Once the contracts have been exchanged, the buyer’s solicitor or conveyancer will have lodged an interest in the property. From that moment, the deeds to the property will be frozen for 30 working days to allow the buyer to pay the seller and lodge their application to the Land Registry to transfer the deeds into their name.

Buyers are advised to make sure the balance is paid into the seller’s conveyancer’s account at least one day prior to completion date just to make sure it is cleared and visible.

Sellers need to vacate the property before completion date which could be any time from the same day to several weeks away.

Completion day

This is a big day for everyone, especially the buyer.

Completion is usually officially set for midday on the specified date although in practice this time is nominal. In reality, completion takes place when the seller’s solicitor or conveyancer confirms that they have received the outstanding balance on the house. They then drop the keys off at the estate agents for the buyer to collect.

Things to do once the house is sold

Following completion, the buyer’s solicitor will need to tie up some loose ends such as paying Stamp Duty Land Tax if applicable. They will inform the Land Registry of the transaction and, where a mortgage lender is involved, a copy of the title deeds are sent to them to hold until the loan is paid off.

The freeholder has to be notified if the property is a leasehold.

Finally, both buyer and seller will receive a final invoice from their solicitors or conveyancers and the seller will also need to pay their estate agent.

One thing that is overlooked by people when they move house is letting others know their new address. We produced this quick guide to make sure nobody important is left out of your list.

What now?

Buying or selling a house is major transaction so it is best to get it right. We are here to ensure the process runs smoothly. If you are about to enter a property transaction, get in touch today so our experts can assist.