Conveyancing Process – Frequently Asked Questions and Common Terms
Some of the legal terms and information clients are faced with when buying or selling a property can sometimes seem confusing. Your conveyancing solicitor will ensure you are aware of your obligations and guide you through the whole process. However, to help out a little, we explain some of the common conveyancing legal terms and answer some of the most frequently asked questions in regards to property sale and purchase transactions.
What is Conveyancing?
The term ‘conveyancing’, in its most simple form, is the legal process by which the ownership of a property is transferred from one owner to another. Conveyancing will have two core phases; the exchange of contracts and completion and will be carried out by a conveyancing solicitor or licenced conveyancer.
Exchange of Contracts
Exchange of contracts is when the two legal representatives of the buyer and seller swap signed contracts and the buyer pays the deposit. It is at the point the agreement to buy or sell a property becomes legally binding. Until this process takes place, both the buyer and the seller are able to pull out of the transaction without incurring any serious costs.
To get to this stage of the property transaction, the property solicitors or licenced conveyancers representing the buyer and seller will have needed to complete various searches and legal obligations. Once these have been completed, the exchange of contracts can take place. Both legal representatives of each party will confirm that their clients have signed identical contracts and it will be at this point that a completion date is agreed on.
This is the point that a deposit is normally sent to the seller’s solicitor - usually up to 10% of the purchase price – and the signed contracts are exchanged.
What happens on the Completion Date?
The completion date is the point where ownership of the property is transferred from the seller to the buyer. The date will have been agreed at the point of the contract exchange. This is the date the buyer’s solicitor will arrange for the purchase money to be transferred to the seller’s solicitor and the seller’s solicitor will at this point arrange for the keys to the property to be handed over to the buyer on confirmation of funds received.
What is Freehold Property?
Freehold is the outright property ownership, including the land it is built on. There is no time limit to this period of ownership of a freehold estate in land (as opposed to leasehold). If you are the owner of a freehold property you will be responsible for maintaining the property and the land on which it stands.
What is Leasehold Property?
If you are the leaseholder, you are the owner of the property for a fixed term but not the land on which it stands on. Once a lease expires, ownership of the property reverts back to the freeholder, unless you can agree to extend the lease. When purchasing a leasehold property you should take in to consideration: how many years are left of the lease; what service charges and related costs are expected of you; the length of the lease and how this might affect a mortgage offer and the property resale value.
What are conveyancing disbursements?
Disbursements during a conveyancing process are the additional fees and taxes that apply to all transactions and that must be paid to various third parties by the solicitor or licenced conveyancer on the behalf of the seller or buyer. These will usually be paid at the start of the process, however, some of these additional expenses will be added to the final costs and paid at the final point of the property transaction. The required fees will all be explained, but some of the most common disbursement costs include:
· Stamp Duty Land Tax
· Land Registry
· Survey Fees
Calculating Stamp Duty Land Tax (SDLT)
You can calculate the amount of Stamp Duty Land Tax by visiting the Gov.uk SDLT Calculator The calculator will work out the SDLT payable for most transactions.
This calculator can be used for property purchases that are:
· for first-time buyers
· replacing main residence
· additional property
· residential or non-residential
· freehold or leasehold
What searches and surveys need to be completed?
Before purchasing any property, it will be advised that certain surveys are performed to identify if there are any issues or potential problems with the property that is being purchased. There are numerous surveys that can be conducted, however, the three core checks are rot, damp and structural problems. Although surveys are useful, they are not mandatory and many buyers choose not to have them.
There are, however, certain searchers that mortgage lenders require before agreeing to give you a mortgage. These searches include:
· Water and Drainage Searchers - Residential water and drainage searches ensures the property being purchased is safe from any flooding, leaking or damp caused by public waterways and drains.
· Environmental Searches – An environmental search is carried out to identify what the land and the land in the vicinity of the property was previously used for and whether such uses are likely to have caused any potential contamination of the land.
· Local Authority Searchers – Evaluating the local area to identify if there is anything that might affect the property in the future.
How long does the conveyancing process take?
Typically a standard conveyancing transaction can take up to 12 weeks, with some transactions progressing much faster if mortgage applications are already in place and only straightforward “searches are needed. However, it will be difficult to determine an exact time-frame, and if there are certain unforeseen delays – see types of delays below – this could prolong the process. Certain matters will require your solicitor or conveyancer to carry our further legal work to resolve any issues that occur and complete the transaction.
What are the common causes of delay?
The conveyancing process can often be complicated and there could be various outside factors that cause delays in the completion. The conveyancing solicitor will be working hard to progress the completion as quickly as possible, however some of these delays are out of their control.
Here are some of the most common delays:
· Waiting on a mortgage offer
· Valuation survey delays
· Survey results requiring further investigation or attention
· Delays from the other party in completing contract information or enquiries
· Long chain of property sale and purchase transactions
When should you instruct a solicitor?
Regardless of whether you are buying or selling a property, instructing a solicitor at the earliest stage will ensure you are getting the right advice. The Conveyancing team at Rose & Rose Solicitors will deal with your transaction efficiently and effectively. We will take the time to explain the transaction to you in clear language and guide you through the process every step of the way.
Please contact us on 0208 974 7490, make an online enquiry or email us on firstname.lastname@example.org to discuss the best way forward for you and we will provide you with further and specific advice tailored to your circumstances.