Sport and Social | Conveyancing Process | Market Comments | Business award
Useful Information
A brief guide to the Conveyancing Process
In order for a property to be marketed by an estate agent on behalf of a seller a Home Information Pack (HIP) is required to be produced. These can be produced by specialist HIP firms, or by your own solicitor. Once a HIP has been commissioned the property can be legally marketed.
When an offer has been made by the buyer and has been accepted by the Seller, then their respective solicitors are advised so that draft contract documentation can be prepared. If the solicitor has already prepared the HIP for you then the contract can normally be produced quickly.
The sellers will be asked to confirm instructions by returning their client care letter and Terms and Conditions of Business back to their solicitors as soon as possible together with replies to the Property Information Form and the Fixtures Fittings & Contents List. Copies of any guarantees will be required and any Planning Consents and Building Regulation Approvals, the latter of which is most important as a lack of these can cause unnecessary delays. Details of where the client has a mortgage(s) (if any)will be required so that deeds (if any) can be obtained where necessary so that a contract can be prepared. Official Copies are part of the HIP document and therefore will already be available. Any further information that sellers may have about their property should also be handed to their solicitors to enable them to prepare the contract together with as much supporting information as is possible.
It is a good idea to deal with the above paperwork as soon as the property is marketed so as to avoid delays once a sale has been agreed, especially in light of these slightly difficult market conditions at the moment.
The buyers will also be asked to confirm their instructions by returning their client care letter and Terms and Conditions of Business together with a cheque for any search fees not contained within the HIP to their solicitors.
In all matters and in order to comply with Money Laundering Regulations, identification of each client will need to be provided to the solicitors as well as the estate agents before matters can commence. For buyers they will also need to advise their solicitors of source of their funding for their purchase by way of copy bank statements etc.
Once in receipt of the seller’s deeds and/or Official Copies, then a draft contract can be prepared and sent to the buyer’s solicitors. The buyer’s solicitors will then instigate any other required searches, as the Local search and the Drainage Search are contained within the HIP. An Environmental Search is usually requested and, in certain areas of the country other searches may be necessary and prudent as well, being coal mining, tin mining, brine, china clay, radon and Commons Registration.
The buyer’s solicitors will then raise any further questions on the paperwork they have received, checking the title on behalf of their clients to ensure that there are no covenants that have been breached, i.e. not to build an extension or shed, conservatory etc. without consent of the original builder, and to ensure that all planning permission and Building Regulation Approvals are in place.
The Local search is checked to see if they are any onerous entries against the property address, e.g. lack of Planning Consent and Building Regulation Approval for an extension, or an improvement grant that may need to be repaid by the seller, road proposals within 200 metres, whether the road is adopted and therefore maintained by the council or whether it is a private road. This is not an exhaustive list.
The Drainage Search is checked to see if mains drainage is connected to the property, whether there is a water meter or not, and whether any building or construction has been built over a sewer pipe for which consent would have been needed.
When the Environmental Search is received it again has to be checked to ensure that it receives a clear certificate that the property is not built on contaminated land.
Copies of all searches are usually provided to the buyers for their information.
It is then hoped that the replies to any preliminary enquiries raised by the buyer’s solicitors have been satisfactorily answered, and then, in the majority of matters mortgage instructions are usually awaited. Often this is the most popular cause for delays in most transactions, because the offer has to be made in writing and it has to be checked to ensure that all the various assumptions and details made by the lender are correct, and that there are no special conditions which require further enquiries to be raised. Sometimes the lenders require the buyer’s solicitors to ascertain information that their own surveyor has mentioned, so you can see that just because the mortgage offer has arrived it is not always possible for an exchange of contracts to take place the same day. In these days of “credit crunch” this is even more important, and some lenders can be quite pedantic.
If all is in order then the contract can be approved and returned to the seller’s solicitors and the sellers can then sign the contract in readiness for exchange.
The buyer have to confirm to their solicitors that they understand and accept the mortgage terms and then a pre-contract report is submitted to the clients and they are invited to attend at the solicitors offices in order to sign the contract and other documents being the Transfer and mortgage deeds. This can be dealt with by post if you are not local to your solicitors. At this stage the buyers will be asked to produce a deposit if they are not relying on their own sale, and it must be in cleared funds to avoid delays of up to a week in clearing a personal cheque. It is not about solicitors not trusting their clients, but is in fact it is part of our strict account rules which state that we can only use the client’s monies when those funds have been cleared. We cannot use other client’s monies at all.
The clients must also have confirmed to us that they have buildings insurance in place for the new property, otherwise contracts cannot safely be exchanged.
It is then that contracts can be exchanged if all parties have agreed a moving date which is called the completion date.
In between exchange and completion the final pre-completion searches are made to protect the buyers and their mortgagees, mortgage funds are requested to arrive the day before completion so as to avoid any delays on the completion date. Lenders will only guarantee that mortgage advances will arrive on the date requested on the certificate of title during banking hours which is no good if it arrives in the afternoon, especially on busy Fridays and Bank Holiday weekends.
Everybody has to move on the same day, i.e. the sellers have to vacate normally no later than 1.00pm, and the keys are released by the estate agents once the seller’s solicitors have confirmed to them that the purchase monies have been received by Telegraphic Transfer from the buyer’s solicitors. This is why completion dates cannot be at the weekend.
Once completion has taken place the seller’s solicitors discharge any mortgages that the seller has, and the buyer’s solicitors prepare the papers for registration at H M Land Registry once the Inland Revenue have returned the Stamp Duty Land Transaction Tax form certificate after they have received correct amount of Stamp Duty.
Finally when registration has been concluded a copy is supplied to the buyer’s solicitors who then send a copy to the buyer, as in practice there are no deeds as it is all held electronically by H M Land Registry.
Back to top