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thinking of Buying or selling a property even remortgaging in the UK need Conveyancing?

 

What Is Conveyancing?

Conveyancing is the process of legally transferring home ownership from one person (seller) to another (buyer). It starts from when an offer is made and finishes when you hand over the keys to the new owner. The term includes transferring title deeds and ownership of a property from one person to another.

How Long Will The Conveyancing Process Take?

In the most straightforward of cases, conveyancing for the sale/purchase of a home will take between six and eight weeks.  But it can be much less, or a lot longer, and this can depend on many different circumstances. It is impossible for a conveyancer to give an exact timescale for the completion of a transaction because there are so many factors which may arise. The time taken also depends on them been able to get the relevant documents from other conveyancers in good time. Conveyancers generally want to be able to complete the transaction as fast as possible since they do not get paid until the transaction is complete. Customer satisfaction is therefore a vital element in their service . This is why you will find most conveyancers act on a no sale, no fees basis. This means that if the sale does not complete they will not charge a fee for their time.

Is A Solicitor Necessary When Buying A Property?

Even the most straightforward house sale needs a solicitor involved. Mortgage Lenders will only deal with a solicitor or licensed conveyancer on either side of the transaction. So unless neither party has a mortgage you will have to use a conveyancer. It is important to remember though that although you are paying the solicitor’s fees, the solicitor still has a duty of care to the lender. Freehold transactions are usually  less complicated than leasehold transactions but a solicitor is still necessary. They will check to make sure that the sellers are the registered owners and that they are entitled to sell the property. They will also check that planning consents have been obtained for any alterations or extensions and that any building works comply with regulations and that a completion certificate has been issued by the local authority. They will check to see if there are any covenants or easements on the property. If you are using a mortgage lender they will also require searches on the property These vary from according to the area you are buying in and the lender involved but will always include a local authority search. Leasehold transactions are more complicated and  and interpreting the clauses in a lease can be a challenge and misunderstandings can be costly. In addition to checking the veracity of the seller, the solicitor will also make checks against the managing agent and the freeholder.

When Do The Conveyancing Fees Get Paid?

If you are selling a property you may be asked to make a small payment in advance.  The agent’s and conveyancer’s fees will be paid from the balance of the proceeds of the sale after any mortgage loans have been repaid.  The overall balancing sum will be sent to you.  If the proceeds of sale are insufficient to cover the repayment of any mortgage loans and the fees you will be asked to pay the balancing sum shortly before completion. If you are buying a property you will be asked to make a payment up front to cover the cost of the conveyancing searches necessary to progress the conveyance. These are payments made to third parties and are not part of the fees of your conveyancer.  You may also need to deposit sufficient fund to cover the deposit before exchange of contracts and if there is any shortfall between and incoming funds (from mortgage loans and/or the net proceeds of a related sale) you will need to pay the balancing figure before completion.

What Does “In A Chain” Mean?

Being in a chain means there is more than one buyer and seller involved – e.g. you are selling to someone who in turn is selling to someone else. A chain of conveyancing transactions usually makes transactions take longer, because everyone has to get to get their own transaction ready, and they all have to wait for the last transaction along the line to catch up. Finally when everyone is ready, a date of exchange/completion which is convenient to all parties must be decided upon. The various people up and down the chain all have their own agendas to follow, and in the unfortunate instance of someone pulling out of this chain, problems may occur.

Is A Survey Really Necessary When I Buy A Property?

A home is the most expensive purchase most people ever make. As an owner you will benefit from expert advice on the condition of your property – whether you plan to live in it, rent it out or sell it. The purchase of a house or flat in England and Wales, like much of contract law, is based on the principle of ‘Caveat Emptor’ or ‘let the buyer beware’. In short it means that you should make as extensive an investigation into the property as you are able. If the house is falling down and you haven’t had a survey done, you are unlikely to have any recourse to the seller. If you are using a mortgage lender, they will carry out a valuation. This is not a survey and it is not unknown for these valuations to be ‘drive by’. Even if the valuer enters the property, the inspection will be superficial. A home buyer’s report is a bit more detailed but again, the surveyor will make only a basic inspection and does not go as far as a full structural survey. Many people question whether, with the other expenses of buying adding up, they need a full structural survey – especially if the mortgage lender has carried out a valuation or homebuyer’s report. However, a house may be the most expensive thing you will ever buy but the cost of a survey may be ‘only’ around £450 to £650.

What Is A Leasehold Property?

A leasehold property is a property which is subject to a lease. A lease is an agreement to use a property for a period of time without owning it and these leases are commonly around 99 years. Flats are usually leasehold and other shared ownership properties will also be leasehold. The lease will contain various agreements between you as the lessee and the landlord as the lessor.  Under a lease, ground rent is paid (often a nominal amount) and a service charge will be paid to cover the cost the lessor is put to in complying with their requirements under the lease such as insuring the property and maintaining any shared areas (decoration, gardening, general upkeep).

What Is Indemnity Insurance?

This used to be quite rare but these days it’s incredibly common and you are likely to hear about it as you buy and sell houses. Taking out an indemnity insurance policy protects you against problems that have cropped up on the property you are buying. The problem might be a relatively obscure legal problem with the deeds for example. It’s almost certain that no-one is ever going to make it a problem in reality, but to sort it out by going to the other parties involved may be very expensive, very slow, or impossible. In these sort of cases an indemnity policy is ideal – should the unusual problem ever evolve then you are covered by the policy. If you’re offered such a policy It’s important to bear in mind what it does and doesn’t cover. For example a policy in respect of missing building regulations will not cover the cost of doing the work properly, but only the cost of following through any action taken by the local authority – if they don’t take any action (and they won’t after the works have been up for a year) then you won’t be able to claim.

What Does ‘Exchange Of Contracts’ Mean?

Once all the details have been agreed, the contracts between buyer and the seller must be signed. The contracts are exchanged and the buyer pays a deposit. The agreement is legally binding from this point. If you pull out of the sale at this point, you lose your deposit. If the seller pulls out for any reason, you can sue them. It is therefore essential that:

  • all legal documents have been thoroughly checked
  • your survey or homebuyer’s report has been completed (if you are having one)
  • any repairs or other work to be arranged by the seller before the sale are agreed
  • you have received your formal mortgage offer
  • you have the money to pay the deposit

Once the contracts are agreed, your  conveyancer will ask you to sign it. The seller signs separately and the solicitors exchange copies. Once copies of the contract are exchanged, the deal is legally binding.

Does A Solicitor Need To See The Mortgage Offer Before I Can Exchange?

You certainly need written proof of the confirmation and terms  your lender will provide the necessary funds. This will need to be seen by your conveyancer. There are often conditions in the written offer that need to be satisfied before the funds are released and and therefore needs to be checked and dealt with. You also need to be happy with the product you are being offered.

When Will You Exchange Contracts?

Both buyer and seller sign identical contracts, but only when they are formally exchanged by the solicitors does the deal become legally binding. Between exchanging contracts and completion, either side will almost certainly pay major penalties if they pull out. Exchange normally happens between 7 and 28 days before completion – although it is occasionally possible to exchange and complete on the same day . Exchanging contracts means you are legally committed to buying the property so you need to make sure you have everything in place before hand, to avoid any hold ups. You should only exchange contracts after:

  • You have agreed on an offer, including for fixtures and fittings
  • You have had the mortgage valuation and any surveys you want done
  • You have been formally offered a mortgage in writing
  • You have a deposit on the mortgage arranged
  • Your solicitor has done all relevant searches
  • You have organised building insurance. After you exchange contracts, you are liable for the property, and so you need to have buildings insurance in place to start immediately
  • You have arranged funding for the contract deposit (traditionally 10% of the purchase price, but nowadays often less)
  • You have agreed on a date of completion for the sale, which will be written into the contract
  • You have read, understood and signed the contract

Once you have done these things you will agree on a date and time to exchange contracts – usually at midday on any given day. Your conveyancer will do this for you.

What Happens On The Day I Complete And When Can I Get The Keys To My New House?

Your conveyancer will receive your mortgage funds and will send to seller’s conveyancer as soon as possible.  Completion takes place when conveyancer receives funds. These are sent through the banking system so once sent, they are out of your solicitors control as to how fast the transaction takes.  If you are in a long chain or there is a delay then you may not move until late in the day but can sometimes take just a few hours. It is important to remember that the contractual completion time is usually 1pm so you may not be able to move before then, even if the sellers have received the purchase funds.  Once the sellers have received funds their conveyancer will contact your conveyancer and the estate agent to advise that the keys can be released.
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property renting faqs

I need to find a place to rent. What do I do first?

Before you start searching for your new home it’s a good idea to write down a budget. What are your current outgoings and what money do you have left each month to spend on rent? Take into account that, when you first move in, you will need to front a security deposit as well as the first month’s rent and a refundable holding deposit.

I've found a place I want to rent. Now what?

If you haven’t already, make sure you go and view the property. If it’s a house-share, meet all the people you’ll be moving in with. The letting agent will ask you to sign a Tenancy Fee Declaration form which lists the services they will provide and the Permitted Payments expected from you, in line with the Tenant Fees Act 2019. The agent will then begin the referencing process to ensure you’re in a position to rent the property.

Why do I need to be referenced?

The landlord needs to be sure that that their tenant won’t have any problems paying the rent on a monthly basis and that the tenant will take good care of their property.

What does referencing involve?

Referencing is nothing to worry about. Tenants applying to rent need to give details of their employer and income, their previous address, and some bank account details. These will be checked to ensure they are able to commit to monthly rental payments.

Do I need to show ID?

As part of the referencing process we need to be sure a tenant is who they say they are. We will require a proof of residency (such as a utility or council tax bill from the last 3 months) and proof of ID (such as a passport or driving licence).

What if there are problems with my reference?

In some circumstances, a tenant may not be approved immediately via referencing. Obvious examples are students without a regular income, or someone leaving their family home for the first time with no renting history. This is not uncommon, and there are still options for tenants in this position. They could pay the rent for the full term up front, or seek out a guarantor.

What is a guarantor?

 

If a tenant is not fully approved by the referencing process, they can ask a guarantor to support them. A guarantor (usually a parent or guardian) will agree to take joint responsibility for the rent for the property if the tenant fails to. Guarantors are required to pay any rent arrears (if the tenant does not pay) and for any damages costing more than the deposit.

What does a guarantor need to do?

 

A guarantor needs to go through the same referencing process as a tenant. The normal requirement is that they are employed and a UK resident, with sufficient earnings to cover the tenant’s rental commitment.

Why does my guarantor have to guarantee all tenants?

 

In the case of a house-share, the tenancy agreement makes all tenants jointly responsible for all rents and responsibilities. There is no individual ‘share’ of the rent written into the agreement. The guarantor therefore has the same responsibility.

Why do I have to pay a deposit?

The landlord trusts the tenant to keep the property in a good condition and in good order. The deposit is held to ensure that any damages (over and above fair wear and tear) can be corrected at the end of the tenancy.

What will happen to my deposit?

Landlords and letting agents are required to register your deposit with an approved Tenancy Deposit Scheme. Your Move landlords register their deposits with a scheme such as My Deposits. The deposit is then either held by the landlord, the agent or the deposit scheme itself. You should receive details of the scheme, explaining where the deposit is held.

What does a Tenancy Deposit Scheme do?

A Tenancy Deposit Scheme like My Deposits will protect the money for you and can offer assistance should there be a dispute about the deposit at the end of the tenancy.

What is a tenancy agreement?

A tenancy agreement is a contract signed by both the tenant and the landlord. It outlines all the rules to which both parties must comply.

What is a routine visit?

Your landlord or letting agent will regularly schedule visits to the property. They want to make sure that the property is being looked after and maintained in a good condition, and they’ll be looking for any maintenance issues.

Who is responsible for repairs?

The landlord is responsible for maintaining the property in a good state of repair. They will either take care of this directly, or do so via a letting agent – make sure you know who to go to when there’s a fault at the beginning of the tenancy. Check your 'Welcome letter' to find out what service level your landlord has. If it is Tenant Find or Rent Collect, then you will need to talk to your landlord directly. It it is Fully Managed then the agent will help. If you do damage to the property you a

Can I decorate or make changes to the property?

In most cases, a tenant can only decorate or make changes to the property with the express permission of the landlord. We recommend receiving this permission in writing.

What if I accidentally cause damage to the property?

Don’t worry – accidents happen. Tell whoever is responsible for the property maintenance (either the landlord or letting agent) as soon as possible. You will be expected to cover the cost of putting it right. Don’t try to ignore or hide damage because it could get worse, and it will only come out of your deposit at the end of the tenancy.

What if the landlord isn't keeping to their side of the agreement?

If a tenant believes the landlord is not keeping to their side of the agreement – for instance, not maintaining the property in a fit state of repair – then the first thing the tenant should do is speak to their letting agent. The letting agent has a duty of care to the tenant, and may be able to help to resolve issues depending on the service type the landlord has with the agent. Look at your 'Welcome letter' to find out the service level of your landlord. Alternatively, a tenant can find independent advice from The Citizens Advice Bureau.

When can my landlord enter the property?

A landlord has to give the tenant notice before entering the property, unless it’s an emergency.

What if I can't pay my rent?

It is always your responsibility to pay the rent, but circumstances change. What happens if you become unemployed or are unable to work due to sickness? The most important thing is not to let arrears pile up until they’re unmanageable. Speak to your landlord or letting agent and see if you can reschedule your payments. And don’t forget, you can get insured against sickness and unemployment to keep yourself protected. Click here to find out more.