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Conveyancing Frequently Asked Questions

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What is Conveyancing?

The process involves legal transfer of home ownership from one person; typically a seller to another person – the buyer. The process begins when an offer is made and completes when the keys of the property are handed over to the new owner. Put simply, it is the legal process of transferring the title deeds and property ownership from one person to another.

How long does the process take?

The standard settlement period is 6 to 8 weeks once the contracts have been exchanged. The terms of settlement can however be longer or shorter than this period depending on the individual circumstances by the seller or buyer prior to signing the contract.

It is next to impossible for a conveyancer to give an exact timescale for the completion of a transaction or settlement because there are so many factors that may arise during the process. The time taken also depends on the length of time required by conveyancers to acquire relevant documents from other conveyancers.

Generally conveyancers want to be able to complete the process as fast as possible and to the satisfaction of clients. Customer service is at the heart of these conveyance services, which is why most conveyancers offer services on a no sale, no fees basis. This essentially means they will not charge a fee for their time if sale is not secured.

Is Survey Necessary when I Buy a Property?

Even the most straightforward house sale would require the involvement of a solicitor. The underlying reason is that mortgage lenders only deal with licensed conveyancers or solicitors on either sides of the transaction – that is the buyer’s side as well as the seller’s side. So unless neither a property has a mortgage you will need to use a conveyancer. It is significant to remember that although you pay the solicitor’s fee, they still have a duty of care to the lender.

Freehold transactions are typically straightforward compared to leasehold transactions; however, you will still need a solicitor. They will check to ensure that the sellers are registered owners and they are entitled to sell the property. They will also check that planning constraints have been obtained for any extensions or alteration and that the property in question complies with regulations and has been issued a completion certificate by the local authority.

Additionally, they also check if there are any easements or covenants on the property. If a mortgage lender is being used, they will also require searches on the property. The searches vary with respect to the area you are buying the property in and the lender involved, however a local authority search is always included in the process.

Leasehold transactions are comparatively more complicated. The clauses in such leases can be difficult to interpret and a little misunderstanding in interpreting them can be costly. Moreover, in order to check the authenticity of the seller, the solicitor also makes checks against the freeholder and the managing agent.

When Do I Need to Pay the Conveyancing Fees?

If you are the seller and selling a property you may typically be asked to make a small payment in advance. The fees of the agent and conveyancer are usually paid from the balance of the proceeds of the sale after any mortgage loans have been repaid. The overall balancing sum is sent to the seller. In case the proceedings of the case are insufficient to cover the repayment of any mortgage loans and the fees you will be asked to clear the dues shortly before completion of the process.

Similarly, if you are a buyer, you may be asked to make a payment upfront to cover the cost of the searches that are essential to progress the process. These are payments made to the third parties and not part of the fees of your conveyancer.

Furthermore, before exchange of contracts, buyers may be required to deposit fund to cover the deposit. In case of a deficit in incoming funds from net proceeds of a related sale and/or mortgage loans, buyers may be required to pay off the balance before completion of the process.

What is meant by ‘being in a chain’?

Being in a chain simply means there is more than one seller and buyer involved in the process. For example, you are selling your property to someone who is in turn selling it to someone else. A chain of conveyancing transactions typically make the transaction process lengthier primarily because everyone involved in the process need to get their transaction ready and they all have to wait for the last transaction to catch up.

Furthermore, when all parties involved in the process are ready, a date of exchange or completion convenient to all parties needs to be decided upon. The parties involved in the process up and down the process have their own agendas to follow and are connected to another. In case someone pulls out of this chain, issues may arise.

What is a Leasehold Property?

A property subject to lease is called leasehold property. A lease is an agreement to use a property for a certain time period without owning it. Typically, leases are issued for a term of 99 years. Apartments and other shared ownership properties are usually leasehold. The lease contains a number of agreements between a lessor (the landlord) and the lessee (the tenant). Ground rent which is often a nominal amount is paid under a lease and a service charge is paid to cover the cost the lesser is put to in complying with their requirements under the lease such as maintaining any shared areas such as general upkeep, gardening or decoration and insuring the property.

What is Indemnity Insurance?

Indemnity Insurance was not very common some time ago but more recently, it has become very common and you are likely to hear about these leases as you become a part of property sales transactions. Indemnity Insurance protects you against possible problems that may crop up on the property you are buying. For example, it could be a murky legal problem with the deeds and sorting the problem by going to the other parties may be quite expensive, a very sluggish process or even impossible.

In such cases, an indemnity policy would be ideal. Should the unusual problem arise, the policy will protect you. If you are offered such a policy, it is significant to remember what the insurance covers and what it doesn’t.

For example, in case of missing building regulations, the insurance will not cover the cost of getting the work done properly; however, only the cost of following through any action taken by the local authority. If no action is taken by the local authority (especially in cases when the property has been up for a year in which local authorities won’t take action) you will not be able to claim

What is meant by ‘Exchange of Contracts’?

Once all parties involved in the process agree on the details, the contracts between the seller and the buyer needs to be signed. Contracts are exchanged and a deposit is paid by the buyer. From this point on, the agreement becomes legally binding. If the buyer chooses to pull out the sale at this particular point, they lose their deposit. Similarly, if the seller bails out for any reason, they can be sued by the buyer party.

Therefore, it is critical to ensure:

  • All legal documents have been checked thoroughly
  • The homebuyer’s report or survey has been completed)
  • Repairs and other work need to be arranged by the seller, before an agreement takes place
  • Buyer has received their formal mortgage offer
  • Buyer is able to pay the deposit sum
  • Once the contracts are agreed, the conveyancer will ask the buyer to sign it
  • The seller is required to sign it separately and once both parties sign the contract, copies of contract are exchanged by solicitors. After the copies have been exchanged, the deal becomes legally binding.

Do I need to show you the Mortgage Offer Before I can Exchange?

You certainly need written proof of the confirmation and terms your lender will provide the necessary funds. This will need to be seen by your conveyancer. There are often conditions in the written offer that need to be satisfied before the funds are released and therefore needs to be checked and dealt with. You also need to be happy with the product you are being offered.

When are contracts exchanged?

Both parties involved in the process, sign contracts separately; however, once the formal exchange of contracts take place by the solicitors, the deal becomes legally binding. In case a party pulls out during the period of contract exchange and completion, they will have to pay major penalties.

Typically, contracts are exchanged between 7 to 28 days before completion, even though it is occasionally possible to exchange and complete contracts on the same day. Exchanging contract means he buyer needs to make sure they have taken care of all legal formalities before hand to avoid any unfortunate incidents. Buyers should only exchange contracts after:

  • They have agreed upon an offer, which includes fittings and fixtures
  • They have the mortgage valuation and any surveys they want done
  • They have been formally offered a mortgage in writing
  • They have a deposit on the mortgage arranged
  • All relevant searches have been done by the solicitor
  • They have organised building insurance, Once contracts are exchanged, buyer is liable for the property and so they need to have buildings insurance to get started immediately
  • They have arranged funding to pay off the contract deposit (typically, it is 10% of the purchase price, nevertheless these days it is often less)
  • They have agreed upon a date of completion for the sale. The date is written into the contract
  • They have carefully read, understood and signed the contact

Once all terms have been agreed upon, buyer will have to agree upon a date and time to exchange contracts. This part is typically handled by the conveyancer.

What are the next steps to be followed once the process is completed and keys to my new home are handed over to me?

The mortgage funds of a buyer are received by their conveyancer. These funds are then sent to the seller’s conveyancer as soon as possible. Once the conveyancer receives funds, completion takes place. The funds are sent through the banking system, so once they are sent through, solicitors have no control over the pace of transaction. Furthermore, if the chain is long or in case there is a delay, you may get stuck for several hours; nevertheless, typically the process may only take just a few hours. It is important to bear in mind that the contractual completion time usually is 1 pm so you may not be able to move before that, even if the seller has received the purchase funds. Once funds are received by sellers, your conveyancer will contact your conveyancer and the estate agent to advice the release of the keys.

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