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Conveyancing is an area of law which is often misunderstood and overcomplicated. This article will help to simplify conveyancing and provide a concise overview of the process. Conveyancing is the legal transfer of property from one party to another. A standard (and most common) transaction involves two parties in the sale of a residential property. The process includes qualified conveyancers (or solicitors) representing each party. They are responsible for ensuring that the property can be legally transferred, together with the rights associated with it. There are a number of checks that solicitors are required to carry out, before completing the sale, to ensure that the buying party is not at any detriment or loss after the sale has been concluded.
What steps are involved in conveyancing?
- Identification Verification
The first step includes the solicitor completing an identification of all parties involved in the sale, whether they are selling or buying, to make sure they are who they claim to be. This can be done through official ID checks such as proof of residence and passport, driving license or birth certificate etc.
Once parties decide to proceed with the purchase, a contract is drafted usually by a solicitor acting on behalf of the seller. The title to the registered land is accessed and all title documents and official documents are reviewed to ensure that the seller is entitled to sell the property. The following registers will be reviewed:
- Title Register – shows all owners, the prices paid and any charges;
- Proprietorship Register -provides the legal owner’s information and entries affecting the right to sell the land and;
- Charges Register: this lists the names of parties who have an interest registered against the party.
There are a wide range of checks that need to be carried out or arranged by your instructing solicitors, prior to the contract being finalised. This includes searches and surveys, which can both have a consequential effect on the value of the property. Searches are important and allow a party to identify any issues, such as, boundary disputes, planning limitations and any previous illegal extensions or modifications. Some of the searches that a solicitor will request include:
- Local Authority Searches:
Local Land Charges Search (LLC1) which provides information about the property, financial obligations and restrictions. There will also be a requirement to check CON29, which provides information on approved or proposed planning applications and restrictions on permitted development.
- Local Registry Searches:
The Title Register shows all owners, the prices paid and any charges. There will also be a requirement to check the Title Plan, which confirms the boundaries and location of the property.
- Environmental Searches:
This provides information on issues of flooding and contaminated land.
- Water Authority Searches:
During this search, it will be key to ensure that the property is not vulnerable to flooding, leaking or damp caused by public waterways. A Drainage Search assesses the sewer connection and water supply.
- Highways Search:
This is a detailed plan mapping out the extent of all rights of way and points where highways end and private land begins.
A qualified surveyor will also be engaged to ascertain whether it is reasonably priced and to undertake structural surveys of the building. The surveyor uses their expertise to inspect the property. Negative findings are used to further negotiate the price or request the seller to repair faults before contracts are exchanged.
What are the immediate steps before completion?
- An interest at Land Registry is lodged and transfer of the registered title is initiated.
- A completion statement is sent to the client including a breakdown of remaining sums (the solicitor’s fees, search fees, land registry fee and the balance owed on the property).
- Provides an undertaking ensuring the seller’s mortgage is dealt with once the transfer takes place (if applicable).
- Provides a completion statement setting out the balance of funds required for the purchase.
The purchaser’s solicitor conducts searches to check any new charges/interests which have arisen. This is to ensure no changes have occurred between exchange and completion. Once the remaining sum has been transferred and approved by the seller’s solicitor, completion occurs. This is known as “moving day.” The party buying the property will need to pay stamp duty, if applicable and register the sale with the Land Registry.
What is Stamp Duty?
Stamp Duty is taxation which is payable for the purchase of residential properties (including flats and houses) which are bought across England. The tax is typically due when a freehold property is bought, when buying a new or existing leasehold property or transferring land or property in exchange for a payment (including a mortgage).
Recent changes introduced by the government temporarily removes the stamp duty for first-time buyers purchasing a property worth up to £500,000 until 31 March 2021.
Information on current Stamp Duty rates can be found at https://www.gov.uk/stamp-duty-land-tax.
How much will I have to pay for conveyancing services?
The cost of conveyancing varies from one sale to another. Different authorities and solicitors will charge different prices, whilst more expensive properties will require more complex checks and higher fees. Below is an example of how the costs can vary depending on the value of the property:
A 3-bedroom semi-detached house in Timperley (£375,000) is estimated to cost £1,060.00 in conveyancing fees (a total of £1,895.00 including fees, searches and VAT), whilst a house with similar features in Twickenham (£860,000) is estimated to cost £1,720.00 in conveyancing fees (£20,822.00 including fees, searches, VAT and Stamp Duty) for a first-time buyer.
The article provides a basic outline on the residential conveyancing process and the role of conveyancers. Whilst the process is often straightforward, this is wholly dependent on the property, location and the buyer’s future plans with the property. Issues are likely to arise during searches where extensive information is uncovered, which could cause unwanted complications including further negotiations, delays and an increase in expenses. However, the use of conveyancers can make the process simple, as they are responsible for navigating the sale to completion.
This article is intended for guidance only and must not be relied upon for specific advice.