Sales Advice: Conveyancing - what does it actually mean?
You have found the ideal property. You have arranged the mortgage and the seller has accepted your offer. The only thing left to do is instruct a solicitor to deal with the legal part, before you can arrange a moving date and get the keys! But what is actually involved in the legal part of the process and why can it take so long?
This stage of the process is known as 'conveyancing' and involves the legal transfer of land and property from the seller to the buyer.
There are four key stages in conveyancing; investigation, exchange of contracts, completion and post-completion.
The buyer’s solicitor will consider the property’s Title Deeds and highlight any risks which may run with the property. For example, the property may have a registered compulsory purchase order to a 3rd party or an enforcement action against it for breach of planning permission.
The buyer’s solicitor will also validate the seller’s ownership of the property, confirming that they do have the right to sell.
The buyer’s solicitors will carry out a number of property 'searches' to further investigate any potential risks. These may include:-
i) Environmental Search which highlights any potential environmental issues including any potentially contaminated land or potential risk of subsidence within the vicinity of the property.
ii) Water and Drainage Search which identifies the location of public water and sewer pipes which serve the property, helping establish, for example, whether an extension has been built over these pipes.
iii) Local Authority Search whereby the Local Authority answer a number of questions about the property including whether any planning permission has been granted and/or an enforcement notice has been served.
The buyer’s solicitor will raise a number of enquiries with the seller’s solicitors, requesting the necessary planning permissions and building regulation certificates in respect of any works which have been undertaken at the property, together with any guarantees which may still be valid.
It is always recommended that the buyer obtains a survey of the property to find out whether there will be any works required at the property and to ensure that the valuation reflects the agreed purchase price.
The investigation stage is crucial as it is important to find out whether there might be problems when obtaining a mortgage or selling the property in the future.
Exchange of Contracts
When the buyer’s solicitors and seller’s solicitors have negotiated the contract and other documentation based on the agreed terms, they will arrange for the buyer and the seller to sign. The solicitors will then 'exchange contracts' which is when the buyer and the seller first enter into a legally binding contract and agree a date when the purchase will be completed. The buyer is usually obliged to pay 10% of the purchase price to the seller when contracts are exchanged. There is usually a gap between the date when contracts are exchanged and the date of completion. This gives the buyer and the seller time to prepare for the move with the peace of mind that they are both legally obliged to complete on the agreed date.
The buyer’s solicitor will ensure that any required mortgage funds arrive in time and that the buyer has paid the necessary remaining funds to complete the purchase. The purchase funds will then be sent to the seller’s solicitors. Once the seller’s solicitors have confirmed that funds have been received, then completion has taken place and the buyer can collect the keys!
Following completion, the seller’s solicitors will send the original signed documentation to the buyer’s solicitors. The buyer’s solicitors will then register the transfer at the Land Registry, placing the buyer’s names onto the Title Deeds. The buyer’s solicitors will also register the Mortgage Lender’s legal charge if the buyer purchased with a mortgage.
We understand that buying and selling a property is a significant transaction and it is easy for clients to feel lost in the conveyancing process.
Davies & Partners work with trusted solicitors and can make a recommendation if required.
For further informtion please contact our office on 01280 702867.
Alex Britchfield | Partner | Davies & Partners