What is “conveyancing”?11th October 2018 5:34 pm Comments Off on What is “conveyancing”?
A general guide
“Conveyancing” is the legal process of transferring home ownership from the seller to the buyer. Whilst every transaction is different, there are a number of crucial steps in the legal process that are common to each sale and purchase transaction and we have outlined these below by way of a general guide.
Selling a property
Once you have accepted an offer, the estate agents will issue a ‘memorandum of sale’ to the parties and their conveyancers, which provides each party with confirmation of the deal agreed, the other parties details and initiates the conveyancing process .
Sending the Contract Out
The first major step for us when acting for the seller is to send the contract pack out to the buyer’s conveyancer. We will ask you to complete a ‘Property Information Form’ and ‘Fittings and Contents Form’ and request that you provide us with any relevant deeds and documents that you may be holding, for example, any planning and building regulation consents, or reports relating to the central heating and electrics. If the property is leasehold, then you will also have to complete a ‘Leasehold Information Form’ and provide specific documents, for example a copy of the lease and share certificates, if applicable. These are then sent to the buyer’s conveyancer.
At this stage, the buyer’s conveyancer will be review the paperwork we have supplied, carry out searches and will therefore send through a list of enquiries relating to the property. We will guide you through this process of dealing with the enquiries, rather than simply forwarding you a list of questions to be answered and will provide you with advice as to what information is required. This stage may be repeated a number of times, depending on whether the buyer and their conveyancers accept the responses given. If the property is leasehold then information is needed from the freeholder or managing agent by way of what are known as “LPE1 enquiries”.
Exchange of Contracts
Once the buyer is satisfied with your replies to enquiries, the next stage will be exchange of contracts. Once this has taken place, you are legally committed to sell the property to the buyer. In order to exchange contracts we will need to hold a contract signed by you and will need your authority to proceed. Once exchange has taken place, the completion date (i.e. the moving date) is fixed and should there be a delay in completing on this date, the party at fault may face financial penalties.
On the completion day, the money is transferred from the buyer’s conveyancer’s account to our client account. Once the monies have been received, we will check if you are ready and the property is vacant, before contacting the estate agents to release the keys at which stage the buyer can then collect the keys and move in. We will also arrange to repay any mortgage secured on the property and pay the agreed commission amount to the estate agents.
Buying a property
Following your offer being accepted and the agents issuing the memorandum of sale, you will need to:-
- Instruct your chosen solicitors or conveyancers.
- Finance – finalise any arrangements, including finalising your mortgage application unless you are a “cash buyer”.
- Survey – We recommend that you obtain a survey before proceeding. It is your responsibility to satisfy yourself as a buyer regarding the structural condition of the property and that the price you have agreed to pay reflects the value. No warranty will be given the by the Seller as to the state and condition of the property.
Enquiries and reporting
When we receive a draft contract and supporting documents, (including title documents, property information forms and any relevant copy documents such as consents, guarantees and reports) we will check the title of the property (which means checking that the seller actually owns the property and all legal matters which affect the property) and review the information supplied by the seller.
Property searches are enquiries that reveal information relating to the property you wish to purchase. We will obtain the searches on your behalf and they usually include a local authority search, water and drainage search, environmental search, plansearch and a chancel check. We will report to you on the search results, bringing to your attention any issues of which you will need to be aware for the future.
Exchange of Contracts
By this stage we will have reported to you on the title to the property, the information and replies to enquiries provided by the seller and on the results of any searches obtained. It is important that you are certain that you wish to go ahead with the purchase of the property as once contracts are exchanged, the completion date will be fixed and you will be legally bound to proceed with the purchase of the property. If you withdraw from the transaction after exchange of contracts, you will lose the deposit that you paid on exchange of contracts (usually a minimum of 10 per cent of the agreed purchase price of the property).
Before exchange of contracts takes place, the following must also be dealt with:
- If purchasing with a mortgage you will need to have your mortgage offer in writing. In most transactions we will also act for your lender and will require our mortgage instructions from your lender;
- You will have agreed and checked what is included in the sale, e.g. fixtures and fittings;
- Arrange to forward to us the deposit amount (usually ten per cent of the agreed purchase price of the property) and check that all funds are in place for the purchase, including any Stamp Duty Land Tax that you have to pay;
- Sign and return the contract for sale. Agree a completion date for the purchase with both the seller and the rest of the chain, if applicable; and
- Arrange buildings insurance (usually to be in place in your name from the date of exchange of contracts).
This is the date you will be able to move into your new property. You will need to transfer to us any funds required to complete at least one day before the agreed completion date and if you are purchasing with a mortgage, we will request the mortgage advance from your lender to also arrive in our client account at least one day prior to the agreed completion date. On the completion day we will arrange for the money to be transferred to the seller’s solicitors and once received they will confirm receipt and authorise the estate agents (if any) to provide you with the keys so that you can move into the property.
Other matters to consider, both shortly before and after completion are:-
- Check the position of any meters at the property and that all fixtures and fittings are in place as expected.
- Take meter readings and ensure that you register with, amongst others, the utility companies, water supplier and local authority.
- Confirm your change of address to people such as your employers, bank, DVLA, etc.
Both selling and buying a property can be a daunting process and purchasing a property usually involves one of the largest financial commitments you are likely to make throughout your life. It is therefore important to ensure that you are appointing solicitors/conveyancers who can guide you through the transaction and deal with it both diligently and efficiently, otherwise significant delays and a lot of unnecessary stress and angst may be experienced.
Please note that the above information is a general guide only and does not constitute legal advice. We recommend seeking specialist legal advice from us on your own particular circumstances.
This post was written by Colemans Solicitors LLP