Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Conveyancing in 26 Bite-Sized Chunks e book

1,610 views

Published on

Everything You Need To Know About Buying And Selling Your House - in 26 Bite-Sized Chunks. Originally an e book which we first published in 2012.

Published in: Law
  • Be the first to comment

Conveyancing in 26 Bite-Sized Chunks e book

  1. 1. 1 Everything you need to know about buying and selling a house in 26 Bite-Sized Chunks
  2. 2. 1 Introduction: Everything you need to know about buying and selling a house in 26 Bite-Sized Chunks For those of you looking to sell or buy your property, why not get yourself geared up and up to speed with our “Everything you need to know about buying and selling a house in 26 Bite-Sized Chunks”Guide. Each bite-sized chunk will build in to (as they say in the TV ads) a valuable guide to buying and selling a house. And please forgive me for using the term house, but it is easier to use than references to flats or apartments. But we will include specific references to buying or selling leasehold flats. We will give you all our experience as Solicitors and from our days as one of the very few legal firms in England and Wales who were also Estate Agents. This Guide is written in plain, easy to understand language rather then legal jargon. Better just say at the outset (we are lawyers after all) that this Guide is not intended to form nor does it repre- sent actual legal advice. All information is relevant as at January 2012.We would be delighted to answer any questions you have, and would be delighted to help you with your Conveyancing if not soon then sometime in the future.
  3. 3. 1 All Ship Shape and Bristol Fashion As Conveyancing Solicitors in Bristol you might forgive us for the nautical analogy. Estate Agents will advise you that Spring is one of the best times in the year to sell your house or flat. Most Estate Agents will also advise you (but the advice is often ignored) to get your home in tip top condition as far as possible before it goes on the market. As the expression goes, you never get a second chance to make a first impression. Put another way what you need to achieve is kerb appeal. With the present subdued state of the Housing Market, it is even more essential that your property stands out from the crowd. Competition amongst Sellers is fierce, as buyers are few and far between. Smartening the appearance of your home may not actually add much to its value, but it could make the difference between selling in a reasonable time or sticking and going stale on the market. Here are our top tips to ensure you get to the top of the podium with your SOLD medal: • Give yourself enough time between thinking about selling and actually ringing the Estate Agent for a valuation with a view to selling • Touch up or re-paint (neutral remember not nuclear) • Re-plaster and Re-point where necessary (well presented puts the potential buyer in the right frame of mind to make an offer) • Start with the garden • Don’t forget the front door - gleaming is good (as Gordon Gecko might have said) • If you are selling a flat, make sure the communal areas are up to scratch (even if you do it yourself-with permission of course) With a little fore thought and planning you could reap the rewards of a sale within a reasonable time. To paraphrase the well known Channel 4 programme “Location, Location, Location”- what you need is Presentation, Presentation, Presentation. Good luck!
  4. 4. 2 If you have heeded our advice you have or are in the course of putting your house or flat in tip top condition ready to sell. But like Conveyancing Solicitors not all Estate Agents are the same. Here are our top tips to help you choose an Estate Agent to help you sell your home. 1. Ask around. Talk to friends and colleagues about their experiences. 2. Ask your Conveyancing Solicitor for advice. Yes, strange as it may seem, your Con- veyancing Solicitor will have had deal- ings with all the local agents. Your Con- veyancing Solicitor may also be able to negotiate for a better fee you as well. And no, your Conveyancing solicitor won’t charge for his time and advice. 3. How Many Valuations (or Market Appraisals, it’s posher) Do You Need? If you get three valuations you should be able to smooth out any anomalies between the top price and lowest price. Some Agents will try and bamboozle you with the highest valuation to gain the instruction. The theory goes that if it doesn’t sell You're Tip Top Now Our Top Tips: Choosing an Estate Agent and they have your property long enough, you will eventually drop your price to a more market sensitive price. It is tempting to go for the middle valuation, but there are a few other points you should bear in mind; • Getting the price right in the current market is more important than ever to avoid your property sticking and even- tually going stale. • Ask your Estate Agent as well for “priced to sell”rather than expect to achieve. Remember, your Estate Agent wants to create buzz for your property, so attracting more than one interested buyer can lead to a small scale (or large) bidding war. 4. Horses for Courses. As we said before, not all Estate Agents are the same, some will specialise in particular types of property e.g. top of the market middle market and mass market. Look around for“For Sale”boards in your area and do research on line to see the Estate Agent most suited to your property. 5. Question1: Your time starts now... Don’t be afraid to ask searching ques- tions about the Estate Agent’s compe- tence. Any Estate Agent worth his salt will be more than happy to demonstrate theirtrackrecordandtheirexpertise.
  5. 5. 3So here goes: • How many similar properties have you sold in the last 6 months and what percentage of the asking price did you achieve (The average at the moment is about 92%) • What information have you based your valuation on and have you proof • Will you accompany all viewings, in the evenings and at weekends • What is included in their fee; does it include all advertising costs and brochures • Where will your property be adver- tised; portals; regionally; locally 6. Are Estate Agents Fees Negotiable Yes, of course they are, but remember you are dealing with an expert negotia- tor, so it won’t be easy. If your Estate Agent drops his fees too quickly, consider how well he or she would be able to convince a Buyer that your property was correctly priced 7. What type of Estate Agency Agree- ment? Sole Agency Agreement: This is the most common and works for both parties best. You get total commit- ment from your Estate Agent, the fees will be the lowest and you only pay the one fee if a sale is agreed and completed Joint Agency; Can work well if you have a property, which would benefit, from both local exposure and national exposure. The downside will be a higher fee as the Estate Agents split the fee Multi Agency: The most expensive (as only one Estate Agent will get paid) and tends to be the marketing of last resort. Does bring with it a hint of desperation 9. The Small Print As Conveyancing Solicitors we ought to give some advice (general advice you understand- speak to your own Conveyancing Solicitor for specific advice-we’re only trying to help) about the Estate Agency Commission Agreement. Resist too long an agreement. 6 weeks should be enough for you to gauge how good your Estate Agent is, and you can then extend it by one or two weeks notice. You remain in control. The average time to sell a property at the moment is just over 10 weeks so an agency period of 12 weeks should suffice (that’s 10 weeks and 2 weeks notice). Happy Selling! Which Conveyancing Solicitor?: Don't let your Estate Agent Bully You! In this chapter we concentrate on ad- vice given by Estate Agents about which conveyancing firm to use. You can now look for a Conveyancing quality kite mark under the Conveyancing Quality Scheme. You can rest assured that the firms which attain the kite mark are truly Conveyancing Specialists. Not all firms of Solicitors will be able to use the kite mark. Knowledge is Power: Forearmed is Forewarned ; so when your Estate Agent demands you must use“their lawyers”as your Conveyancing Solicitor for the Conveyancing on your home, listen carefully, but don’t be bullied. Conveyancing Solicitors and Estate Agents working in harmony will give you the best chance of a stress free move. But motivation to get you the best person for the job, has been eroded over the years by Corporate owned Estate Agents, who own their own firms of Licensed Conveyancers. You need to be aware: There are the Corporate Estate Agents who are forced to“push” Conveyancing to their sister companies.
  6. 6. 1 This option is usually the most expen- sive. It involves high pressure tactics to get you to sign up to the Conveyancing service as soon as possible or face the prospect of being pestered until you make a decision. This option invariably results in a Con- veyancing“factory”or“call centre” operation. I have many examples, where Sellers and Buyers have been denied access or at best strongly advised against using their existing Conveyancing solicitors in favour of the more expensive“in house” solution There are Estate Agents who are paid to refer Conveyancing to Conveyanc- ing firms of solicitors There are Conveyancing Solicitors, who are referred by the Estate Agent (the Estate Agent will receive payment) This will include some corporate estate agents as well as independent agents. The Estate Agent should disclose that they will receive a referral fee. When it is a genuine arrangement (in the best interests of the client) the fee is for promoting the benefits of the par- ticular Conveyancing services, and will involve streamlined Conveyancing with protocols of agreed service standards; telephone communication, updates etc, enhanced cooperation and is generally on a no fee no sale basis. Alas, there is evidence that Estate Agents will go to the highest bidding Conveyancing firm or intermediary. This will normally be a slightly cheaper option than the Conveyancing provid- ed by corporate estate agents. There are Estate Agents who recom- mend Conveyancing Solicitors These Estate Agents will be invariably independent estate agents, owner run, who have worked closely with efficient and competent law firms and Convey- ancing solicitors over the years, and whose services they are happy to rec- ommend without payment. This is also happens to be usually the cheapest option as well. Conclusion: Use wherever possible a firm of solici- tors who are members of the Convey- ancing Quality Scheme. Don’t accept the first offer of Convey- ancing without doing your own re- search, by asking friends, family and finding out about the type of Estate Agent and the Conveyancing firm on- line. You should decide who you would like to do your Conveyancing and then tell your Estate Agent whom you are using. Top Tip: If your Conveyancing firm tells you that your call is important to us but your call will be held in a queue until the next available case handler is available. RUN A MILE and tell your Estate Agent you won’t be using that firm. And Bully for you!
  7. 7. 4 Ten years in the making before their introduction in August 2007, the Sellers’ Pack then the Home Information Pack (HIP) finally bit the dust in May 2010. As Mr Pickles, the Communities Secre- tary announced on May 20th 2010: “HIPs are history. This action will en- courage sellers back into the market, and help the market as a whole and the economy recover.” Sorry, Mr. Pickles, but I don’t think you can blame HIPs for holding back the Housing Market (clue: try Banks), but I digress. Were HIPs Ever Replaced? Up until then it was a legal requirement that before you put your property on the market for sale, you were required to have a HIP available. HIPs were composed of basic legal information such as, either Land Regis- try documents proving title or what is known as an Abstract or Epitome of Title where the property was older and had not been registered at the Land Registry, a plan of the property and searches such as Local Authority Searches, and a Drainage Search. There was also an Energy Perfor- mance Certificate (EPC) designed to test and rate the energy efficiency of a property. And it is the EPC which is the sole survi- vor of the HIP cull. An EPC is still a requirement before you are able to put your property on the market. The important difference is that it needn’t hold up the marketing. The HIP must be available within 28 days. An EPC costs on average about £40. What does an EPC contain? An Energy Performance Certificate is prepared after a Domestic Energy As- sessor carries out an inspection of your Property. The purpose of this inspection is to calculate how energy efficient and environmentally friendly your property is. The certificate is drawn up, detailing the costs of running your property, how much Carbon Dioxide it produces per year, a summary of how certain features of your property affect its rating and measures that can be adopted to save money and improve the properties energy efficiency. All in easy to understand fridge type ratings from A-G From 20th May 2010, a new duty on the person acting on behalf of the seller, normally the Estate Agent or the Seller’s Solicitors if the sale is private to be satisfied that an EPC has been commis- sioned before marketing is begun. All of the new duties carry fixed penal- ties where somebody fails in the duty conferred on them by the new regula- tions. If in doubt your Estate Agent or your Conveyancing Solicitor will advise you.
  8. 8. 5 It’s never to early to think ahead when you are planning on a buying or selling a property. Here’s a heads up, if you are thinking buying or selling a house or a flat. 1. Give yourself as much time as possible before you actually put your property on the market for sale. This 10 Ways To Avoid Stress When Moving Home will allow time to declutter: touch up; redecorate and carry out minor repairs in order to present your home in the best possible condition 2. Get 3 valuations or market ap- praisals from Estate Agents as you should be able to smooth out any anomalies between the top price and lowest price. 3. Instruct the right Conveyancing Solicitor at the very beginning, even before you have found a buyer. This way you get to know who you are working with, how they will work with you and the relevant paperwork can be pre- pared (excluding the sale price) and ready to send to the buyers solicitor as soon as you have a buyer, avoiding any delays right from the start 4. Get your mortgage offer(s) in place; talk to mortgage lenders as soon as you think you are moving. By having financials in place early on will make you a more attractive and credible buyer for any vendor 5. Be Realistic; don’t get too carried away with reported increases in house prices. . Pricing to sell will get people through the door to view and sell your house faster. Remember the property you buy should be cheaper too! 6. Be upfront with your Conveyanc- ing Solicitor, they are on your side after all. Share with them any potential prob- lems or possible issues, however small or insignificant they may seem to you. Your Conveyancing Solicitor can then judge any impact they may have on your Conveyancing transaction 7. Avoid same day exchange and completion; this is a recipe for poten- tial disaster and for maximum stress! You may be encouraged to do this BUT most house sales involve a chain of transactions and sometimes a lengthy one. You may not actually move on the day proposed because one person in the chain may change their minds. So for your sanity avoid it at all cost 8. Ensure you visit the property you want to buy several times, and at different times of the day to be sure it really IS the property for you before exchange of contracts. It’s a bit late to find out once you’ve move in for exam- ple that you get no sun in your garden after 3pm, if a sunny garden was a definite must! 9. Keep in regular contact with your Conveyancing Solicitor and Estate Agent, after all they are working for YOU! Regular and clear communication is vital. So whether you have good or bad news, pass it on as soon as possi- ble. 10. Don’t skimp on the survey; this is probably the largest single purchase most people make, so don’t be caught out by always opting for the cheapest option! Even new houses can have major faults (we’ve all seen TV shows on this) . . . so opt as a minimum for a Homebuyers Report for peace of mind, and wallet! We have already covered some of the tips in“Everything You Need To Know About Buying and Selling a Property- in 26 Daily Bite-Sized Chunks”and will investigate the others soon.
  9. 9. 6 Back in the day a long long time ago in a land not far from where I am now, Estate Agents were open more hours than Ronnie Barker and David Jason. 8’til 8 was common and all weekend. Now Estate Agents are open more civilised hours-the reason; the internet. The internet has freed up not just Estate Agents and enabled them to get a life, but it has also taken out some of the detective leg work of potential buyers. Here’s a list of 10 property websites you should visit before you buy (I admit one is fairly obvious, but I make no apology). 10 Property Websites You Should Visit Before You Buy 1. The Land Registry is a government department and records the true price paid not what you might have seen in an Estate Agent’s window. www.landregistry.gov.uk/housepric- es This is where you will find out what your neighbour’s home sold for, or if you are buying what prices have been achieved for properties in the locality. 2. www.rightmove.co.uk the daddy of all the so called property portals. It’s the one portal that most Estate Agents feel they need to be on. Most new property will be uploaded to Rightmove as soon as it marketed. Other websites to look at for property for sale are www.primelocation.com/ and www.zoopla.co.uk/ and www. globrix.com 3. Want to find out not just about hous- es for sale but more in depth knowl- edge about services, amenities, schools and hospitals then go to www.upmystreet.com 4. General market conditions; price moves up or down; number of mort- gage approvals, average time it takes to sell a property; average number of viewings go to www.hometrack.co.uk 5. Itching to put new apps on your iphone or ipad, you’ve guessed it head over to the itunes store. Lots of Estate Agency have their own apps and are free to download. 6. Mortgage finance is particularly tight for most people without a huge deposit to put down. You’ll get an idea of the type of mortgage products available at moneyfacts.co.uk/compare/mortgag- es/ and www.moneysupermarket. com/mortgages/ and if you want a mortgage broker to help you (good idea in the present market) try www. charcol.co.uk 7. You will need to insure your new property so pop along to www.com- parethemarket.com/home-insur- ance/ or go direct with a company such as www.directline.com/home/wel- come.htm 8. Don’t miss out on having your new home surveyed. For a range of good local surveyors start at www.alliedsur- veyors.com/ 9. It may be a bit premature but you will need to budget for your removals www.pickfords.co.uk has a lot of useful information on their website, and make sure you explore a local solution as well. 10. Last but not least, everything you need to know about Conveyancing www.cluttoncox.co.uk There are approximately 300 hundred blog posts on all aspects of Conveyanc- ing, plus our very own online convey- ancing calculator to help you budget for your move. All covered by our fixed fee guarantee with no hidden extras. Happy Surfing...
  10. 10. 7 How to Choose a Conveyancing Solicitor: 10 Helpful Steps “Can your Conveyancing Solicitor Walk the Walk or Just Talk the Talk” When you choose a Conveyancing Solicitor to help you move home, you might reasonably expect all Conveyanc- ing Solicitors to be technically compe- tent. That’s true and there are many surveys to confirm the high satisfaction levels in a technical sense. But what about service level compe- tency ? Can Your Conveyancing Solicitor “Walk the Walk” or Just “Talk The Talk”? A simple question to ask your Con- veyancing Solicitor - Can your Convey- ancing Solicitor provide you with testi- monials? In other words can they“walk the walk”as well as“talk the talk”?. Here are ten steps to point you in the right direction when choosing a Con- veyancing Solicitor for your home move: 1. Listen to friends and family who have been moved home recently. Would they recommend their Convey- ancing solicitor? 2. Don’t be bullied by your Estate Agent into using their preferred law- yers. Many estate agents are incentiv- ised to gain a Conveyancing Instruction. 3. Disgruntled clients complain about poor or non existent communication, and voice their frustration on the inter- net. Put the law firm name into Google followed by“complaints” 4. Will your Conveyancing Solicitor explain legal jargon and use plain English? 5. If your Conveyancing firm says they value your call when you ring yet do not have anyone to answer the call and you are put in a queue. Avoid like the plague. 6. How will your Conveyancing Solici- tor contact you and is it what you want; by letter, email, text or in per- son?? Will you deal with the same person in the Conveyancing law firm or be passed from pillar to post? Can they guarantee all telephone calls and emails will be returned by the end of the day 7. Will your conveyancing Solicitors ensure you avoid any nasty bill shocks? Have you had a full written breakdown of all the costs involved with a guarantee of no hidden extras., not just an estimate 8. Avoid low Conveyancing fees headline rates. If it says Conveyancing fees from £299 you know it is going to cost considerably more! 9. Consider a local solicitor for con- venience. If problems occur you may need to see your solicitor face to face; not easy if your lawyers are at the other end of the country 10. Courtesy and engagement are rarer than you might think. If you like your Conveyancing Solicitors and they are nice people, your transac- tion is likely to go much more smoothly. Conveyancing Solicitors are after all human beings as well!
  11. 11. 8 If you are one of the 4 out of 5 Home- buyers (actually 18% according to recent research by MORI and Which magazine) who do not have a full survey or a RICS Homebuyers Survey and Valuation carried out on their new home: think again! Many excuses are used for failing to carry out a survey; cost; extensive local knowledge; age of the property, old and new and most popular of all- our Lender will carry out the survey. The Lender“survey”is actually not a survey at all and is merely a valuation of the property to ensure the Lender is not lending too much on the property. A common excuse is to believe that a new house built within the last ten years has a NHBC guarantee. This is somewhat misleading as there is no such thing as a NHBC guarantee; merely a warranty. The warranty is really only effective, unless in extreme cases, for the first two years after the property was built. What types of Survey are available? There two types of survey available, although a new survey product has been recently introduced known as a “Home Condition Survey”. Home Buyer’s Reports are specifically designed as an“economy”survey on residential property to fill the gap be- tween the Mortgage Valuation Report and the Building Survey/Full Structural Survey. A Home Condition Report is similar but includes Defects Insurance to a Homebuyer's Survey: Don't Need One; Don't Want One - A Cautionary Tale value of £20,000. It is also useful to commission a Survey if you are buying out of your area. Here is a cautionary tale about buy- ing a property, not in your area, where you have little knowledge of property or the surrounding area. Clients of ours were relocating because of a job move to the North West of England (they currently reside in Chip- ping Sodbury). They did a bit of detective work and scouted various locations, and eventu- ally found a property overlooking a park at a good price but in need of modernisation. By taking our advice (we always advise clients to have at least a Homebuyers’ Survey) they instructed a local Surveyor to carry out a Homebuyers Survey. Most of the recommendations were not a surprise given the state of the property. It was the final summary which took our clients breath away, and it was information that without the Surveyors local knowledge of the area, would not have been easily available to them. The Surveyor concluded: “While the property is located in an enclave of prestigious houses overlook- ing a park, we would point out that within 200 metres of the property, it is possible to buy a terraced house for as little as forty thousand pounds. This could severely affect the long term value of the house and much depends on the immediate adjacent area takes, as to whether it will prove to be a good investment” Although, my clients would have hap- pily endured the renovation of the property, the uncertainty of a potential reduction in the value of the property, through circumstances beyond their control, was an unacceptable risk. It would remain to be seen whether my clients would have lost money. But for them, the fact that the cost of a survey has ensured that they will not poten- tially lose tens of thousands of pounds has been money very well spent. So always commission a survey, not only will it help identify problems and allow you to budget accordingly, ac- cording to The Which research, when a buyer commissioned a survey they were able to achieve an average reduc- tion in the asking price of £2000.
  12. 12. 9 When you are working out your budget for your home move, there is no need to worry about cost overruns when you know you have agreed a fixed fee with your Conveyancing solici- tors. You, let alone your Conveyancing Solici- tor, will have no idea how long or how complicated your Conveyancing trans- action will be. You may be happy to just agree an estimate or a minimum or maximum Conveyancing Fees: Get a Fixed Fee Quotation. Always! range. There really is no need. The Ministry of Justice conducted re- search in 2010 into Conveyancing fees. 31 per cent of people who moved home in the last three years obtained an estimate of their legal fees from their Conveyancing Solicitor. 61 per cent were able to obtain fixed fee quotations; whilst 4 per cent walked the tightrope of hourly billing (how long exactly is that piece of string?) A final 4 percent did not bother or were unconcerned enough to get a Convey- ancing Fee or Estimate before proceeding. It may be a surprise that 3 out of 10 people were willing to accept a Convey- ancing Estimate. There really is no need, when there are so many Conveyancing firms who offer a fixed fee. At Clutton Cox for example you can use our Conveyancing Calculator to get all the figures involved including Stamp Duty and the other third party pay- ments. And better than that, the Conveyancing Fees are covered by a guaranteed fixed fee with no hidden extras. Where we have no idea of what may be involved in a Conveyancing transaction we have a menu of fixed fees for every conceivable event. The client will only pay if it happens, if it doesn’t happen you don’t pay the fee. And if something happens which is not covered by our menu of prices, then you still don’t pay anything. In all our years of experience in Convey- ancing, we have found that reassur- ance that there will be no nasty bill shocks at the end of a Conveyancing transaction, is one of the best ben- efits we have to offer our clients So, it’s an easy decision to make why accept an estimate when you can have the comfort and piece of mind of a fixed fee guarantee.
  13. 13. 10 People often say their solicitors fees were thousands and thousands of pounds. What they really mean is that the over- all cost of moving was thousands and thousands of pounds which included their Solicitors fees. Different thing entirely. Do you actually know what proportion of the overall legal costs of purchasing a house or flat in the UK goes to your Conveyancing Solicitor? You may be surprised. Say you were buying at £350,000. OK that’s a bit above the average but by no means in the realms of the super rich. Conveyancing Fees: Where Does All The Money Go? The answer and at the risk of exploding an urban myth is approximately 5-6% of the total legal costs of buying a prop- erty goes on your Conveyancing solici- tor’s fees. I am afraid there are no prizes for guess- ing where the rest goes? A whopping 90% to the government in Stamp Duty Land Tax and VAT, with a further 2 and a bit percent to another Government Department, the Land Registry. It is incredible that out of a total cost of approximately £11765 that around £10600 goes on Stamp Duty Land Tax and VAT . The rest of the Conveyancing fees are made up of search fees, online money laundering checks and bank transfer fees. What is Stamp Duty Land Tax anyway? Its name was changed by the then Chancellor Gordon Brown a few years back. It was one of his tax changes that didn’t quite make his budget speech, but turned up in the small print later. It is in fact a new tax and different to the old Stamp Duty. Originally, Stamp Duty was levied in the late 17th Century to build up the war chest for a war against France. Personally, I would hazard a guess that we must have enough in the kitty by now to have a go. At the very least reclaim Calais. How much is Stamp Duty? Stamp Duty kicks in at £125000, on which you will pay Tax at 1% of the whole purchase price you will pay 1% up to £250000. Over £250001 and upto £500000 you pay 3% and 4% above that for those of you lucky enough to buy a property over £I,000,000 pounds, you will pay 5%. If you are curious you can access the Clutton Cox special online Conveyanc- ing Costs Calculator here and find out for yourself. So next time you are in conversation with someone who has just purchased a property and claimed that their legal fees were in the thousands of pounds, you have the opportunity to remind them where the money really went!
  14. 14. 11 How do you what you will get, when you instruct your Conveyancing Solici- tor to act for you when you move home Strange as it may seem all you have to do is ask. You will get a good indication of how your Conveyancing Law firm will deal with from your original contact. Not all Conveyancing Solicitors are the same: some people like to deal with a Solicitor all the time, others are happy with a case handler or dealt with by a team of people. To help you understand why some Conveyancing Solicitors are different, you should have a list of frequently asked questions so you can decide if the particular firm of Conveyancing Solicitors are for you. Conveyancing : What to Expect from Your Conveyancing Solicitor Here are some questions to ask your Conveyancing Solicitor: 1. What do you charge? 2. Will there be any hidden extras? 3. How do you Bill? 4. What are your terms? 5. Who will be looking after me? 6. How often will we need to meet? 7. Where do we meet? 8. Do you guarantee your work? 9. What will you do for us? 10. What will we need to do for you? 11. Can you tell what it is going to cost, now? 12. What other matters can you help us with during the matter? 13. What steps are necessary before we can start working together? 14. Where do I go to get my service issues addressed? 15. Do you have a website so we can see a little more about you? 16. Do you bite? (just kidding on that one) There is so much information already available on the internet that a Google search for Conveyancing Solicitors (in your area) will give you a better under- standing of how one firm can give you more than another firm.
  15. 15. 12 Tactics can vary when you put your property on the market for sale. You will have heard phrases such as a Sellers’market or a Buyers’market. In the former, tactically, you can be more bullish on the asking price in the later you will need to be more cautious. There are too few buyers in most parts of the country at the moment (London seems to always to be the exception) to do anything other than price your property realistically, some might use the term aggressively. The projections for the housing market are pretty much the same for the fore- seeable future: low volumes of sales; Sellers: Don't Show Your First Offer the Door restricted mortgage finance available; confidence fragile in the face of rising interest and cost of living and an uncer- tain employment outlook. House price inflation for most of the country is unlikely and prices may even dip again if more“stressed sales” come on to the market later in the year An Estate Agent’s remit is to create interest in your property and to per- suade potential buyers to view. The “proof of the pudding”is whether you get an offer on your property and how quickly. Your ideal scenario is for one of the early viewers (yes it might even be the first viewer) to make an offer on your property. Word of advice: Don’t show your buyer’s first offer the door if the offer is below asking price. It may actually be the highest offer you receive, rather than the first of many escalating offers. When clients ask us to advise them generally on buying a property, we always tell them to find out how long the property has been on the market. In the present market conditions, how long a property has already been on the market is a determining factor in how it should be valued. Good properties in the right loca- tions and keenly priced will not stay on the market for long. Fresh to the housing market gives you an advan- tage, which shortens over time the longer your property stays on the mar- ket. If you miss the early market and your house remains unsold for a month or two, it is a sign that the asking price does not meet with buyers’expecta- tions. When you receive an offer after such a length of time it is highly unlikely to be for the asking price (or near). Again, do not blow your Buyer out of the water and dismiss it as“derisory”. If you feel you really cannot countenance the offer, then are you really that serious in selling in the first place. In both instances, your Estate Agent will earn their commission by negotiating a price that will be nearer to the asking price for you. If you’re selling, think very seriously about any offer you receive
  16. 16. 13 Buying a house and setting up home with a partner is quite common be- fore a marriage or a civil partnership. It is also quite common for divorced people to set up home with a new partner. Call us Conveyancing Solicitors morbid if you like, but what if your relationship were to go all wrong. By taking the proper legal advice from your Conveyancing Solicitor right at the beginning of the Conveyancing trans- action, you may avoid further anxiety and financial stress. Here is a list of 5 simple and straight for- ward solutions: 1. PUT the deeds of your property into joint names. This way you will not encounter prob- lems of sharing in the profits on sale, Dream Home: Avoid Conveyancing Nightmare especially where you may have contrib- uted to improving the property. It also eliminates a potential crisis if the named owner asks you to leave the property. 2. DECIDE whether you would like to own the property jointly (known as a joint Tenancy) or whether you prefer a predetermined share e.g. 50/50 or 60/40 ( Tenants in Common) 3. WHAT happens to the money when you sell? If you have put in an unequal share rather than simply having your capital returned on sale or transfer, you can have your contribution expressed as a percentage in a document known as a Declaration of Trust. That way, if your relationship doesn’t work out each partner will know exactly how much of the net sale proceeds will be his or hers to receive. Don’t risk it and have to let a court decide. 4. WORK OUT your ongoing running expenses for your new property. Again, if unequal you might consider a “Cohabitation Agreement” These documents are by no means uncommon, and both partners will benefit from full disclosure of finances and getting things off your mind right at the beginning. The Deed could always be ripped up at a later date or reviewed and renewed as the partners see fit. Without a Will there is no absolutely guarantee that the property will go to your partner on death. In fact, in the worst case scenario, with no agreement with the executors of the deceased partner, you might be forced to sell the property and only receive your original share. You can find Conveyancing Solicitors who will give you a fixed price for any additional Deeds or Documents and also provide you with a fixed fee guar- antee with no hidden extras. In all cases, individual circumstances will vary, and you should obtain specific advice from your Conveyancing Solicitors. 5. MAKE a WILL. This is essential advice, especially where you have decided to hold the property asTenants in Common.
  17. 17. 14 Buying a flat, or an apartment, as Developers like to call them, differs from buying a normal house or freehold property Leases are used where there is one building or a block with multiple own- ers. The legal proof of ownership will be by way of a Lease. You will be known as a Leaseholder or Lessee or Tenant (termi- nology varies as to what was fashion- able a the time of the original Lease) Under a Lease you will own the lease- hold flat only for the remainder of the period stated. The length of a Lease will vary from 99 to 999 years. You will have difficulty obtaining mortgage finance if the number of years remaining on the Lease is fewer than 60 years. Leases are complicated and often lengthy documents. Buying a Flat: What You Need to Know as a Buyer There will still be a freehold and a free- holder owner; the Landlord, who will either be non resident or better still one of the residents who all form part of a management company specifically formulated to run the management of the whole building or block. There are however, professional man- agement companies who will run the management of the building (often when a Developer is selling). Your responsibilities and obligations will be governed by the terms of the Lease. Ground rent and service charge A lease is similar to a Tenancy so you must pay a rent to the Landlord. At best this will be a peppercorn (legal speak for nothing) or may be several hundred pounds. Service charges are levied to cover the maintenance of the whole building. Even if paid in advance, service charges are often subject to adjustment when the actual expenditure for the year has been calculated. Past alterations If the flat seems to have been altered or extended since date of the original lease, your Conveyancing Solicitor will need to check if the alterations have occurred in the recent past and that necessary consents were obtained both form the Local Authority as well as any consents required under the Lease. Alterations, extensions, improvement and renovations Please note that if you plan any altera- tions to the flat after you move in: External alterations or extensions to a flat will generally be impossible or impracticable, and even internal altera- tions may need: (a) Building Regulations Consent (b) (If the building is listed or in a con- servation area) Listed or Conservation Area Consent (c) Consent under the flat lease and any other covenants which affect the property (d) The consent of your mortgage company Building Insurance The Building in which the flat forms a part will be insured by the Landlord. You, as the leaseholder should arrange contents insurance in the normal way. Are there any special problems? Conveyancing Solicitors do not normal- ly visit the property, so it is difficult to generalise You should always report and seek advice from your Conveyancing Solici- tor on anything unusual from your own inspection or conversations with the Seller of the flat.
  18. 18. 15 You have sold your house or you have just found the house you were look- ing for and for the purposes of argu- ment you have instructed the non fictitious Conveyancing Law firm CLUTTON COX - What happens next? Here is a list of commonly asked ques- tions and some helpful answers Q What will my Conveyancing solici- tors want from me to kick everything off? A. We will ask for some information from you, about you and your property, to get matters started. At regular inter- vals we will then report to you in writ- ing or email at each stage of the trans- action. Conveyancing: Frequently Asked Questions Q. Will I need to make an appoint- ment to come to the office? A. We are able to deal with everything through the post, fax, e-mail or by telephone. Money laundering legisla- tion will require us to produce some identification from you and make fur- ther on line checks. If you are local feel free to pop in and see us. Q. When will I have to pay you some money? A. Where you are purchasing, we ask for £250 on account to cover the initial search fees. This will be held in our client account separately from the Firm’s own money, subject to our right to transfer and use the same in pay- ment of our legal fees and expenses. Our Money Laundering risk manage- ment procedures mean we cannot accept cash in excess of £300 Q. Will I have to pay a deposit and if so, when will it be needed? A. Yes, if you are just buying a property. We will tell you when we need it–it should be a Bankers Draft or a Building Society cheque made payable to‘Clut- ton Cox’. We do NOT accept personal cheques because of delays. If you are buying and selling, we do not usually require any additional money. Q. Who will let my new Building Soci- ety/Bank know when the new mort- gage funds will be required? A. We will advise them of the date. We ask for the monies where possible to arrive the day before completion to avoid any delays on your moving day. Q. How soon can I receive any money due to me? A. We will post any balance in your favour to your new address within seven days. We can also‘Telegraph’ monies directly to your Bank Account for an additional fee Q. What time do I have to leave my property and what do I do with the keys? A. The contract normally states 1pm. Please leave your keys with your Estate Agents, who will release them to your buyer when we have called them to say the money has been received. Q. When can I get the keys for my new property? A. Usually after lunch on the day of completion. There can sometimes be a delay where a chain is involved. We must wait for money to be received before sending your money.
  19. 19. 16 Conveyancing Solicitors can be rather blasé with their use of jargon Some Conveyancing Solicitors prom- ise to speak in Plain English (we at Clutton Cox do at least); other Convey- ancing Solicitors no doubt still wallow in the odd“hereinbefore”and“aforesaid mentioned” So if you are embarking on a sale or purchase here is a little help. So for viewers at home only, here goes: Agreement: Another word for the Contract of Sale Caveat Emptor: Only bit of Latin, we promise:“Let the Buyer Beware” Client Care Letter: Your agreement with your Conveyancing Solicitor, de- tailing how much you will pay, how you will be treated and what to do if you have any problems or complaints Completion: The legal formality of paying over the balance of purchase monies in return for a signed Transfer Deed on the Completion Date Completion Date: The date in the Contract when possession of the prop- erty is given by the Seller to the Buyer in return for any balance of the pur- chase price a.k.a Handover of Keys day Contract for Sale: a legal document which sets out the terms of the sale and purchase of the property Conveyancing: An A-Z through Conveyancing Jargon Contract Rate: a penalty rate of inter- est payable by either the seller or the buyer if the Conveyancing transaction does not complete on the Completion Date Covenant: A legal obligation or restric- tion affecting a property Deposit: A sum of money usually 10% of the Purchase Price paid by the buyer to the Seller’s solicitor on exchange of contract. Non refundable if the Buyer does not proceed to completion day Disbursements: Payments made by your Conveyancing Solicitor but pay- able by you to Third Parties Easement: A right benefiting one prop- erty over another such as a right of way Exchange of Contracts: Literally, the exchange of a signed contract by the Seller and the Buyer confirming a le- gally binding contract to buy and sell a property Fixtures Fittings and Contents Form: What the Seller has agreed to sell to the Buyer either include in the sale price or in addition Freehold: Ownership which lasts until you decide to sell, as opposed to Lease- hold which is time restricted (although that can be up to 999 years. Land Registry: or HM Land Registry is the Government office charged with authenticating sales of property and transferring into the Buyers name Leasehold: Ownership which is time dependent and subject to more restric- tions and obligations e.g. flats are lease- hold Local Search: A list of answers given by the Local Authority from their data and records including financial charges, highways and planning Mortgage: Literally,“death pledge”, but now a deed secured on a property to ensure payment to the Lender Official Copies of Register: Official copies of registered title to a property from the Land Registry Property Information Form: A ques- tionnaire in standard form completed by the Seller which gives information about the property Redemption Figure: The repayment of
  20. 20. an existing mortgage on a property Registered Land: Property (freehold and leasehold) where proof of owner- ship and matters affecting the property have been authenticated (registered) by the Government Department known as the Land Registry Solicitors’Costs: Solicitors’fees pay- able for the Conveyancing transaction Stamp Duty: Now Stamp Duty Land Tax, a punitive tax paid by the Buyer to the Government on the purchase of a Property Survey: An independent report carried out on a property for the Buyer detail- ing any defects, which may include a valuation of the property Transfer Deed: a new title deed trans- fer the property from the Seller to the Buyer. Used instead of a Conveyance nowadays. Unregistered Land: Property (freehold and leasehold) not yet registered at the Land Registry where proof of owner- ship and matters affecting the property will be determined by inspection of the Title Deeds Valuation: If you take out a mortgage, the Lender verifies the price is a fair market value. Not to be confused with a Survey Vendor and Purchaser: A bit old fash- ioned now, we prefer Seller and Buyer of the property Z: There is no Z We, Conveyancing Solicitors have been doing Conveyancing for a long time (some like me an awfully long time). Conveyancing Solicitors have also relied on a standard contract for sale to make life for sellers and buyers as easy and as fair as possible. And over time, a fair bit of tweaking to what are now called the Standard Conditions of Sale has taken place. Conveyancing Contracts: How Standard Is The Standard Contract For Sale? Until 2003, there were two“Standard Conditions of Sale”utilised by Convey- ancers; one of which had reached its 24th Edition. The latest version is the 5th Edition which was introduced in April 2011. 17
  21. 21. 1 So common are these standard condi- tions that most solicitors when issuing a draft contract for sale to a prospective buyer’s solicitors, only refer to them by name, and do not reproduce the condi- tions in full. The new Standard Conditions of Sale (5th Edition) draws together best practice and is designed to be used as a new Protocol in conjunction with the new Law Society Conveyancing Quality Standard . The need for a written Contract for sale signed by all parties to the transaction is laid down in Statute. There is no such thing as a verbal con- tract for sale of land. You may have heard phrase“a verbal contract is not worth the paper it is written on”used in that context. Some Conveyancing Solicitors such as Clutton Cox rely on the Standard Condi- tions almost exclusively, and will only add additional clauses which are spe- cific to the circumstances of the sale. The good news is that the new 5th Edition will prevent some Conveyanc- ing Solicitors, rather annoyingly includ- ing clauses which are clearly not rel- evant to the transaction in order to keep to their own standardised version of the contract. In the new 5th Edition that word “Chattels”will disappear and be re- placed with the much more widely used term “Contents” Other changes introduced will make responsiblity for inusring the property that of the buyer after exchange of contracts. It is always rather tedious explaining to a client why the other side’s solicitors have included a clause which does not apply. It goes without saying that if you have any questions relating to a standard or additional clause in a contract you should consult your Conveyancing Solicitor. When you are buying a house, commis- sioning a search of the records held by the Local Authority, normally kicks off the Conveyancing Process. The local search or more correctly the Local Authority Search is essential in every Conveyancing purchase; that is if you don’t want any nasty surprises when you buy your new home. The Local Authority will look up the so called“charges”(existing obligations and restrictions) register. The Local Authority will provide further informa- tion as well in relation to the use of the property and responsibility or other- wise of footpaths and highways. A planned motorway at the bottom of your garden is the most common illus- tration, we Conveyancing Solicitors trot out. Although less likely now, the threat of a high speed railway at the bottom of your garden is very much on the cards properties on the proposed new high Local Authority Searches: The Lowdown speed rail link from London to the Mid- lands and beyond. 1. Who pays for the Local Search? The Local Authority Search is no longer undertaken by the Seller, now that HIPs have been culled. The Buyer pays for the Local Search Your Conveyancing Solicitor will put in hand the Local Search as soon as you have put him in funds to do so at the outset of the transaction. When your Conveyancing Solicitor asks you for money on account, it is for the local Search and any other searches which may be required. 2. How long will the local Search take? Timescales vary around the country, from same day (electronically) to sev- eral weeks. 18
  22. 22. 13. How much will the Local Search cost? The cost of the Search also varies wildly from £75 to a couple of hundred pounds. In this area the cost of a local search with South Gloucestershire Council is £100; Bristol City Council £100 and Stroud District Council £149 4. What is included in the Local Search? The Local Authority’s records will indi- cate: • are the highways adjoining the prop- erty are publicly maintained • major road schemes close to the prop- erty, and minor schemes abutting or affecting the property • a list of planning decisions affecting the property • contaminated land • is the property in a conservation area • a list of building regulations affecting the property • Enforcement notices for violation of planning permissions 5. What a Local Search Won’t Reveal: Warning! Local Authorities do not guarantee the accuracy of the replies they give. The Local Search will normally not volunteer specific information about nearby road proposals or new develop- ments, unless there has been a formal application for outline or detailed plan- ning consent. Your Conveyancing Solicitor will not visit the property you are purchasing. If you are concerned about potential development as your property abuts vacant land or fields you MUST inform your Conveyancing solicitor who can make further enquiries on your behalf. You could also visit the Council’s Plan- ning Office who are very helpful in filling in background information for you. 6. Will the Local Search run out? A Local Search is time sensitive. Recent planning proposals submitted after the date of your Local Search will not be covered. You will need to take the advice of your Conveyancing Solicitor as to whether you should renew the Local Search. At all times if you have any questions your Conveyancing Solicitor will be only to happy to advise. In chapter 18, we looked at what the Local Authority Search might reveal or not reveal. Here is a round up of some of other searches which may be carried out by your Conveyancing Solicitor; some of which will be obvious, others less so The Water and Drainage Search This was compulsory under the old HIP regulations. Now, although no longer compulsory, most Conveyancing Solici- tors will carry one out as a matter of course. A Water and Drainage Search will dis- cover; the location of the nearest public sewer; is there a public sewer within the boundaries of the property and wheth- er the sewers are adopted or still private. Chancel Repair Liability Chancel Repair liability is an ancient law which could still affect property in England and Wales. Property owners in the vicinity of a medieval or earlier church could be asked to contribute some or all of the repairs to the Chancel of the Church. The Chancel is where the altar lies and pretty much the east end of the Church. Conveyancing Solicitors will carry out a Conveyancing Searches: Commons and Not So Common Searches 19
  23. 23. 1Chancel Repair Liability search for you in certain circumstances; some Convey- ancing Solicitors will carry out the Chancel Repair search by default. For a fuller investigation click here for Chan- cel Repair Liability Common Land and Village Greens If the property you are purchasing is close to or separated from the road by “common land or a village green”, your Conveyancing Solicitor will insist on carrying out a commons search. Commons searches are crucial in such circumstances. In general no develop- ment is allowed where land has been registered and designated as a com- mon or a town or village green. Coal Mining Search There are obviously areas of the country where the effects of past coal mining are still clear. Such areas include South Wales, the East Midlands and Yorkshire and Northumberland Other areas are not so obvious where the coal workings may have ceased over a hundred years ago. I my neck of the woods, if you are buy- ing a property and having your Conveyancing in Bristol or in the former Somerset Coal Field, the threat of past coal mining may not be so obvi- ous- unless you are buying somewhere with a clue in the title, such as Coalpit Heath in South Gloucestershire Brine Search Some searches have a purely regional tint: Conveyancing in Cheshire; Convey- ancing in Great Manchester or Droit- wich Spa will normally require a Brine Search. Limestone Search Conveyancing in Dudley or Conveyanc- ing in Sandwell, Walsall or Wolverhamp- ton will flag up a Limestone search Tin Searches If you are buying and having your Con- veyancing in West Devon or Cornwall then invariably a Tin search will be advisable. Clay Searches These searches are common when Conveyancing is carried out in Dorset, West Devon or Cornwall. Regional searches are relevant, even where any such mining operations may have ceased many years ago as a risk of subsidence remains a possibility If you are also taking out a mortgage, your Lender will need to have such information before it decides to lend money on the property. Your Conveyancing solicitor will look at each Conveyancing transaction on its merits. Where you have any doubts always consult with your Conveyancing Solicitor
  24. 24. 20 Conveyancing Solicitors define a defect in title as not just a problem with the legal title to the property. Defects can also involve a lack of documenta- tion or the potential for a liability not yet identified or claimed such as a Chancel Repair Liability. It might be that in Conveyancing terms you have been naughty (however un- wittingly) failing to comply with current planning laws or building regulations. There has been much legislation over the last decade requirement certificates from qualified contractors for electrical works, central heating and new win- dows. Conveyancing Problems: What Do Defects in Title Look Like? You may also have done something to your property in contravention of a covenant over the property. Covenants fall into two categories; Restrictive Covenants and Positive Covenants. Firstly, and more commonly, restrictive covenants e.g. can restrict your ability to add or amend the property without a third party’s consent, or even in ex- treme cases an absolute ban on doing anything to the property. The good news is that recent decisions by the Courts have tended to take a more pragmatic or some might say common sense approach to interpreta- tion of longstanding covenants. There have been recent examples of covenants being challenged where the original person or persons who had imposed the covenant had long since died. Secondly, positive covenants where the Seller of a property has failed to carry out an obligation e.g. to maintain a fence or boundary. Lack of Documentary evidence is an- other defect in title where written rights to use a footpath, a lane or even a road neighbouring a property simply do not exist. What Happens When a Conveyancing Defect is Discovered? A Conveyancing solicitor’s first port of call where such defects are discovered is to ask for the defect to be rectified. Where a document is missing, say a death certificate, the process is simple. You ask for a copy or approach the relevant Probate Registry if one cannot be located. Where there is evidence of a long standing usage of a footpath for exam- ple, the Seller may be asked to swear a document known as a Statutory Dec- laration. The Statutory Declaration will detail actual personal knowledge of circum- stances which have existed over time. Some situations, however, may require fresh deeds to be drawn up called Deeds of Rectification. The difficulty in modern day Convey- ancing is that the time taken to track down relevant parties or to seek per- mission for works carried out many years ago can be very time consuming and costly. This is where Conveyancing Solicitors turn to Insurance Companies. The Insur- ance Company will issue a Defective Title Indemnity Policy to cover the defect. As always if you have any problems or queries your Conveyancing Solicitor will be more than pleased to help and advise.
  25. 25. Your Conveyancing Solicitor has iden- tified a Conveyancing problem on the house you are buying: there may have been a breach of a restrictive (onerous) covenant (condition) relating to the property. In an ideal world, your Conveyancing Solicitor would have the time and the resource to fix the problem. It may require further deeds of rectifi- cation or variation. A Statutory Dec- laration from a knowing person could be obtained or when all else fails an application to a Court or Tribunal for a ruling on status of the defect. In the real world, when your sale or purchase is linked to a series or a chain of transactions, the pressures are such that time to investigate an alternative remedy is limited or too costly Conveyancing Defects: The Solutions Are Out There! So what happens next? Well, in a busy, modern Conveyancing law firm, de- fective title indemnity insurance has been the line of least resistance in solving such problems. Your Conveyancing Solicitor will either call for or be called upon to provide an indemnity policy to cover the defect. Where you are buying a property with a mortgage, your Lender may insist upon a policy before agreeing to release the mortgage advance. Solicitors have an exemption under the Financial Services and Markets Act of 2000 where they are allowed to arrange indemnity policies where the activity is incidental to a Conveyancing transaction. Conveyancing Solicitors normally arrange the indemnity policy them- selves under a self certification scheme for straight forward issues. For more complex issues the Conveyancing so- licitor would write a report setting out the facts and sending it to special un- derwriters. The premium is a single premium and not a recurring yearly premium, typi- cally between £250 and £500. Are Defective Title Indemnity Ploicies all they’re cracked up to be? A defective title indemnity policy is like a sticking plaster; in the majority of cases it will suffice. But there are also a few issues that you should be made aware of: • The policy may only run for a specific period of time. • The policy is confidential and may only be disclosed to prospective purchasers, their mortgagees and their respective legal representatives. This is to avoid in the Insurers’eyes“people coming out of the woodwork”and making claims. • The policy may be avoided if there is a change of use of the property e.g. resi- dential to business use. • You will not be covered for the full amount you paid for the property, but merely the adverse difference in the market value of the property So, you may rely upon an Indemnity policy in the vast majority of cases. They are not a perfect solution, but never- theless an adequate solution. At a conference of about 350 Convey- ancing Solicitors I attended recently, the audience was asked had they known of a situation where a Defective Title Indemnity Policy had been in- voked. Not one hand went up! In all case you should take the advice of your Conveyancing Solicitor. 21
  26. 26. 22 There have been many regulations brought in by the Government since 2000. On your sale, your Conveyancing So- licitor will ask you to complete a Property Information Form asking you to detail any works you have had carried out to your property which might have required Building Regula- tion approval or a certificate from a qualified tradesman. Such regulations govern situations where you have erected a new build- ing, extended or altered an existing one, and include drains,“heat produc- ing”appliances (normally central heat- ing but may include other heating), washing and sanitary facilities and hot water storage. Here is a list of some of the require- ments, which you would not have Building Regulations: Did You Know? required to apply for formal building regulations but would have needed a certificate: Safety Glazing; Since 1st April 2002 any new or replace- ment windows, glazed doors and roof lights and windows require a FENSA (Fenestration Self Assessment Scheme) certificate. Central Heating; Since 1st March 2003 any new central heating system has needed a registered Contractor’s“Certificate of installation” Electrical Wiring; Since 1st January 2005, newly installed electrical wiring (with a few exceptions) must carry a certificate from a regis- tered electrician. It may not surprise you that Building Regulation approval must be sought from your local Council Planning De- partment for amongst other works. • Removal or part removal of a load bearing wall • A loft conversion • Conversion of a House into Flats • Insertion of Cavity Wall Insulation. Proof of Building Regulations Where you are buying a property, your Conveyancing Solicitor will check whether formal building regulation was applied for or check to see there was a Final Certificate (from 1996 onwards) obtained from the Council confirming the works have been carried out in accordance with the Building Regulations. vised and may not be up to standard. You should seek advice from your Sur- veyor in this circumstance. You could apply retrospectively to the Council A Defective Title Indemnity Policy may also be suggested and should be paid for by the Seller. Some policies do not cover remedial work. But, note that if you contact the Coun- cil, the indemnity policy route will not be open to you. Enforcement of Building Regulations It is fair to say that an enforcement notice issued by the council cannot be served more than 12 months from the date of completion of the works. But, technically, there is currently no cut off time. In practice, a Local Authority will only seek emergency injunction powers where the building is in imminent danger of collapse. You can download“Building Regula- tions: An Explanatory Booklet”from the Government’s website. In all cases of doubt, you should contact your Conveyancing Solicitor. Lack of Building Regulations This would be regarded as a defect in title. If the works were completed many years ago, your Conveyancing Solici- tor should advise you that the works may have been carried out unsuper-
  27. 27. 23 The Housing Market in England and Wales is showing distinctly different characteristics depending on where you are buying and selling. London almost seems a law unto itself with many people chasing few proper- ties. In the rest of the country, markets can vary considerably. In such fragmented markets, Gazump- ing and Gazundering can rear their ugly heads. Conveyancing Problems: Gazumping and Gazundering Gazumping is where a Seller refuses (normally at the last minute) to author- ise his or her Conveyancing Solicitor to exchange contracts on their property. The reason: they have found another Buyer at a higher price. Whether or not you consider Gazump- ing to be a rather dastardly ploy, it inevitably ends in disappointment for the original Buyer, who by then will also have been considerably out of pocket. There is nothing legally an unsuccessful Buyer can do to force a sale, as an offer to buy land in England and Wales is not legally binding unless it is evidenced in writing. For those who like chapter and verse and impromptu quiz questions; originally Section 40 Of Law of property Act 1925 as amended by Section 2 of Law of Property (Miscellaneous Provi- sions) Act 1989. In any frothy housing market, Gazumping is almost a natural by- product. Government has in the past tried to diminish the practise of Gazumping. If you take yourself back to heady days of 1997 (housing bubble before last), you may recall the tale of a Labour M.P., who was so appalled by being ga- zumped on his proposed house pur- chase, that he called for a reform in the Conveyancing and home selling and buying process. This indignation eventually morphed into the Home Information Pack, the HIP in August 2007. The irony was that HIPs facilitated Gazumping. New purchasers, armed with a proper HIP, were able to offer more money for the property and attend the Seller’s Solicitors offices and physically ex- change contracts. In today’s Housing Market, where the number of transactions is way below average, the opposite of Gazumping is more prevalent: Gazundering. The Buyer here decides to reduce his offer at the last minute, and the Seller must decide whether to accept the lower offer or risk the deal falling apart. The Solutions: Speak to your Conveyancing Solicitor about a “Lock Out”Agreement. This is a binding deed primarily for the benefit of a Buyer, but also gives the Seller a degree of certainty The Seller, provided the Buyer is ready to exchange contracts within a defined period, cannot sell to anyone else. In the present climate, which Estate Agents would call a Buyer’s market (more houses for sale but too few Buyers) it is difficult to see a Buyer agreeing to enter in to such an agreement. Contact your Conveyancing Solicitor to prepare a “Conveyancing Pack”which will be available the moment you sell and can shorten the time to exchange contracts. The Conveyancing Pack can include everything needed to effect a swift exchange of contracts. These are just a couple of examples how your Conveyancing Solicitor can help you achieve a successful outcome to your Conveyancing transaction. As always the best advice is to speak to your Conveyancing Solicitor.
  28. 28. 24 Radon Gas is a naturally occurring radioactive gas, which is found in ura- nium in rock strata beneath the earth, particularly prevalent in areas with granite bedrock. The difficulty is that you cannot see it feel it or touch it. Radon Gas may increase the risk of certain types of cancer notably lung cancer. It is important, however, to note that it is only one of several factors in such illnesses and it would be difficult to single Radon Gas out as the main cause. Your Conveyancing Solicitor will tell you when you are buying your new home whether it is in an area likely to be affected by Radon Gas. This information will be revealed as one of the standard enquiries asked of the Local Authority. Radon Gas: What Has It Got To Do With Conveyancing? There are traces in most parts of the country, but higher than average inci- dences are found in counties such as Cornwall, Devon and Somerset. If you are buying a house and having your Conveyancing in Bristol, Bath or the Cotswolds, these areas are affected by Radon Gas, but are usually within permitted levels. Wales and the Pennine district are other areas to note. There is a helpful Radon Gas map (shown on the right) from the Depart- ment for Rural and Food Affairs website showing the incidence of Radon Gas in the UK. There is a helpful question and answer page on the Health Protection Agency’s website, and a full explanation of Radon Gas can be found on the inde- pendent Radon Gas Council website as well. The Good News: You can test the property and take relatively inexpensive counter meas- ures. Counter measures include increasing the sub floor ventilation. If you home was built after 1988, addi- tional sub floor ventilation would have been constructed by the Builders, as it forms part of the NHBC requirements. If your home was built prior to 1988, you can install monitoring equipment which will judge levels of Radon usually over a 9 month period. Will Radon Gas affect my ability to sell my home? It is unlikely to do so even where prop- erties were built prior to 1988. The time taken to monitor is usually the reason why most people would not bother. It would always be possible for a buyer to have works done (at their expense, unless the Seller agrees to pay for it) after completion has taken place. In all case where you have any anxie- ties, a test will be the only sure way of discovering, but your Conveyancing Solicitor will also be able to help with their local knowledge.
  29. 29. 25 You will never hear someone say I am out of pocket because my Conveyanc- ing Solicitor made a mistake; it’s all gone wrong (Pete Tong in rhyming slang) No: not even from that bloke down the pub. The reason: Conveyancing Solicitors have a great reputation for trustwor- thiness and integrity. Conveyancing Does It Ever Go "Pete Tong" Added to that, Conveyancing Solici- tors in the UK hold the world’s most comprehensive Professional Indem- nity Insurance. The scheme which is compulsory for all firms of Solicitors provides that each firm of Solicitors holds minimum level indemnity insurance. So, when you instruct your Convey- ancing Solicitor to act for you in your sale and purchase, you are protected up to a minimum sum of 2 million pounds. The Solicitors Regulation Authority (SRA) is the independent body which governs the professional conduct of Solicitors. The SRA has one of the most stringent regulatory schemes out of all the pro- fessional organisations. The ultimate sanction against a Con- veyancing Solicitor is that he may be struck off and simply not able to prac- tice In Conveyancing transactions, Con- veyancing Solicitors rely upon under- takings from fellow Conveyancing Solicitors, for example, to pay off (or redeem as it is known) a mortgage on a property. Conveyancing Solicitors facilitate the exchange of contracts where often there are many links in the chain. The Banks and Building Societies are also able to instruct Conveyancing Solicitors to utilise safely mortgage funds on their behalf. This is only possible with the certain knowledge that the funds will be used correctly. In the very rare case where the funds go astray, the Banks and Building societies know they monies will be recovered. House moving is stressful at the best of times. The comfort and peace of mind in knowing that you are fully protected if anything goes wrong is the greatest benefit in using a Conveyancing Solicitor to carry out the Conveyancing on your home. So relax, (OK as best you can), and rely upon your Conveyancing Solicitor to complete your move as soon as possible.
  30. 30. 26 Conveyancing Guide: Simples! This Clutton Cox Solicitors Guide to Buying and Selling Your Property has reached it’s end (phew!) This final post puts all the stages of the Conveyancing process into chronologi- cal order for you. There are four main stages in the Conveyancing process, three of which you will be involved with, and a final administrative stage: • Pre Exchange • Exchange • Completion • Post Completion Pre Exchange Your Conveyancing Solicitor will request a draft contract from the Seller’s Conveyancing Solicitors, along with the replies to the Property Information Form and Fixtures and Fittings Ques- tionnaire You cannot have a contract to buy property unless it is in writing or there is some written evidence of it. This gives the Buyer’s Conveyancing Solicitor time to investigate the title to the property contained in the draft Contract documentation. The Buyer will at this stage arrange mortgage finance and have the prop- erty surveyed. The Seller will find another property to purchase or look at alternative accom- modation. Whilst investigations are being carried out all correspondence should contain the phrase “subject to contract”. This is used to ensure that both the Buyer and the Seller are not committed to a contract without having all of the necessary information. Once your Conveyancing Solicitor has received the contracts, this usually takes around a week, the following will occur: • Your Conveyancing Solicitor will look through all of the paperwork provided and will raise necessary further enquiries. o Usually, this is because the docu- ments provided do not contain all of the information required or the infor- mation contained within the docu- ments raise further questions. Once the replies to these enquiries are received your Conveyancing Solicitor will report back to you, by letter, email or over the telephone or in person. o Your Conveyancing Solicitor will apply for any searches that are deemed necessary in relation to your chosen property and once the results are re- ceived a report is forwarded to you for information and comments o A local search varies around the coun- try so expect between a couple of days and a few weeks to come back. • A copy of your mortgage offer will be forwarded to your Conveyancing So- licitor and once this is received a report is made to you regarding the contents. You should check your mortgage offer carefully to ensure that the offer you received relates to the mortgage prod- uct that you applied for. You should also ensure that you are able to satisfy any conditions attached to that offer before you accept the mortgage offer, usually by signing one copy and returning it to your lender.
  31. 31. 1TOP TIP: Your Conveyancing Solicitor is highly unlikely to see the property so if there is anything that strikes you as odd or different you will need to make sure you mention this as possible. Exchange of Contracts. Before giving your Conveyancing Solici- tor the go ahead to exchange contracts you should be satisfied with all of the search results, enquiries raised, your mortgage offer, your Surveyor’s report and have Buildings Insurance arrange- ments in hand for your new property. At this point your Conveyancing Solici- tor will request a deposit, usually 10% of the agreed purchase price. The Seller may if agreed in advancer, a smaller amount depending on circumstances. Once you have provided the deposit to your Conveyancing Solicitor, provided all other parties in the chain are also ready, an exchange should be imminent. If not already agreed, now is the time to discuss a completion or moving in date. Once contracts have been exchanged, usually via a telephone call between Conveyancing Solicitors, both parties become legally bound by the terms and conditions of the contract and will be required to complete the contract on the agreed completion date. You will not be able to change the completion date once contracts have been exchanged and if you cannot complete on the contractual comple- tion date your deposit may be forfeited and you could be sued for further out of pocket expenses. Completion The completion date is the date when you will be able to collect the keys for your new home and/or hand them over if you are selling. Between exchange and completion your Conveyancing Solicitor will be required to carry out final searches with the Land Registry, either a Land Charg- es search or an Official Search, and will also report to your lender that the title to the property makes it a suitable security for their needs and request release of the mortgage advance. You may also be required to finalise and sign some paperwork, if this has not already been carried out. Prior to com- pletion your Conveyancing Solicitor must be in possession of a signed mort- gage deed and Transfer. You must also ensure that you have carried out the following: • Book/confirm your removers - it may be necessary to give them a map with directions; • Cancel newspaper, milk and other deliveries; • Send details of your change of ad- dress to everyone - bank, DVLA, insur- ance companies, club memberships, doctor, health authority, credit cards. Usually about one week before comple- tion you will receive a completion state- ment. This sets out exactly how much is needed to complete your purchase and will include any Stamp Duty Land Tax that may be payable. On the day of completion your Convey- ancing Solicitor will transfer to the Seller’s Conveyancing Solicitors the purchase price, less any deposit paid on exchange via their Bank electronically. This process should be virtually simulta- neously, but in practice can take up to one hour or two hours to be received by the Seller’s Conveyancing Solicitors. (Banks can have bad hair days as well!). Once they have received the funds they will call the Estate Agents and arrange for the keys to be released to you. Congratulations you are now officially now a new home owner (and/or an ex home owner). Post Completion For the Conveyancing Solicitor though, your transaction does not end there and there is still work to be done. Your Conveyancing Solicitor will ar- range for any Stamp Duty payable to be paid to HMRC, in accordance with their requirements. Any fee for Stamp Duty has to be provided to HMRC within 30 days of completion and upon receipt of payment they provide your Conveyanc- ing Solicitor with a certificate that ena- bles the registration at the Land Regis- try to be carried out. The Land Registry can take several weeks to complete their part but once everything is checked your Conveyanc- ing Solicitor will send all the deeds to you for safe keeping, unless you have asked them to store the same on your behalf, in which case they will make arrangements to store them in their vault and confirm any details to you in writing.
  32. 32. This guide was written by Paul Hajek. Paul Hajek has been a Solicitor for 29 years. He has been Principal of Clutton Cox Solicitors (www.cluttoncox.co.uk) for the last 26 years. You can also follow Paul on Twitter http://twitter.com/ paulhajek and LinkedIn http://www. linkedin.com/in/paulhajek Contact Clutton Cox: http://www.cluttoncox.co.uk info@cluttoncox.co.uk telephone number: 01454 312125 Summary We hope our Home Buying and Selling Guide, modestly entitled“Everything you need to know about buying and selling a house in 26 Bite-Sized Chunks”, has given you at least some tips and guidance that you did not know before. Your Conveyancing Solicitor is a font of great knowledge, legal and local, and more than happy to help you with any questions you may have before your start your journey (everyone seems to be on a journey after X Factor). And what may surprise you is that you won’t be charged for initial advice. And, of course, if you choose Clutton Cox as your Conveyancing Solicitors, we’ll get right back to you Thank you for taking the time to read our Conveyancing Guide. If anything you have read has helped you we will be delighted. If you choose Clutton Cox to be your Conveyancing Solicitors on your next would we would be both delighted and privileged. Thank you again. Copyright Clutton Cox 2012. Cover and graphic design by Roberta Schultz http://robertaschultz.daportfolio.com/ This Guide is designed for general information based on our personal experience. It is not intended to form nor does it represent actual legal advice. The specific references to legislation are applicable only in England and Wales. You should in all cases seek the advice of your own Conveyancing Solicitor, although if you require more information please contact us directly. No part of this report may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying except in the course of a review for publication in a newspaper or magazine without permission of Clutton Cox Solicitors, Parliament House, 4 High Street Chipping Sodbury BS37 6AH. Telephone number 01454 312125 or info@cluttoncox.co.uk

×