The Conveyancing Process

What is Conveyancing?

For potential buyers and sellers alike, conveyancing is an extremely relevant topic. The term itself encapsulates an entire conveyancing process. Within this process occurs the legal proceedings that allow for the transfer of property from one owner to another.

Conveyancing covers the administrative transaction of property, once an agreement has been made between buyer and seller. It is essential for a licensed and experienced conveyancing solicitor to step into the exchange to protect the best interests of their client and ensure a fair property purchase. During the Conveyancing Process, the conveyancing solicitor takes on a variety of roles depending on their positioning for the buyer or seller.

The Role of a Conveyancing Solicitor

After accepting an offer on your property, or having your offer accepted by the seller, your next step is to find and instruct a conveyancing solicitor. Depending on whether you are buying or selling the property, your conveyancer will have different tasks to complete. However, no matter what side of the transaction you are on, there are pivotal processes that your solicitor will have a key role in. These will include:

• Drafting and negotiating contracts

During the negotiations for a property purchase, both buyers and sellers want to feel like they are getting the best possible deal. Sellers want to be able to receive the highest price for their property and buyers want to pay as little as possible. Having an excellent solicitor can be essential in these negotiations.

Although an offer has been agreed, there are factors within the exchange that can influence the price of the property and the bargaining that occurs. For example, the results of home surveys often allow buyers to knock hundreds or thousands of pounds off the price. This occurs when there is substantial defect or risk within the property. The buyer’s solicitor will negotiate with the sellers in this circumstance. They may be offered a lower price to cover the future repair costs or, ask the current owners to fix the issues before exchanging contracts. At any point, the solicitor may threaten their client dropping out of the sale, this encourages sellers to be more flexible with their price.

• Securing the Funds for the Purchase

Both the buyer and seller’s solicitor have a role to play in this process. The buyer’s solicitor must secure the funds in order to confirm the purchase and the seller’s solicitor is keen to acquire these funds to appease the seller.

During the early stages of the conveyancing process, the buyer should have completed a mortgage application. With knowledge that the application has been approved, the solicitor will request the funds from the lender after the contracts are exchanged. At this stage, the transaction is legally binding which allows deposits to be paid and the funds to be transferred. The seller’s solicitor will accept these funds. They will either be transferred to the seller or be used to pay off the remaining balance of their mortgage. After this point, the conveyancing process is very close to completion.

• Confirm the completion of the sale

On the day of completion, the buyer and seller are typically both busy moving into new properties. Meanwhile, each solicitor will have a number of tasks to complete. The buyers’ solicitors will transfer the funds to the seller’s solicitor. The seller’s solicitor will pay off the balance of the mortgage as well as the estate agents closing fees and deducts their own fees. They will then send the remaining balance to the seller. After completion the seller’s solicitor will receive the discharge documents. Meanwhile, the buyer’s solicitor will produce a completion statement, pay Stamp Duty Land Tax for the property to Land Registry and register the new ownership. This allows the buyer to receive the registered title from the Land Registry. Any necessary documents will also be sent to the mortgage lender.  At this stage, the conveyancing process and the transaction of property is complete.

The Conveyancing Process for Buyers

When purchasing a property, the conveyancing process will begin once you have had an offer accepted on the property. The solicitor’s job here is to allow you to complete the purchase of the property. Before this can happen there are a number of processes to be completed.

1. Property Searches

This process can take anywhere between 2 and 10 weeks to complete, depending on the amount of information required and its availability to the solicitor. The searches are carried out to ensure the safety of the property and whether there is anything in its history or future that should be noted to the buyer. Key points within the searches include:

Local Authority Checks:

There are a number of factors included within local authority searches, revealing a plethora of information about the property and local area. The information gathered from the checks can be vital in renegotiating the value of the property or making your purchase decision. This can completely alter your conveyancing process, making it incredibly important to carry out.

There are two main parts to the check. One of these is the LLC1 or, Local Land Charge Register Search. Within this, your solicitor will assess any restrictions on the land or property. There can be any number of restrictions on a property. Including whether your property is located in a conservation area or is subject to a tree protection order.

The second part of the checks includes the CON29. Within this form, the solicitor will identify information regarding planning decisions or schemes that may affect the property. This can include proposals for new roads or railway lines. It will also highlight any compulsory purchase orders which could force you to sell your new home in the near future. Finally, there are a number of environmental components, such as whether your property is situated on contaminated land.

Any number of factors revealed in this check can hold up the conveyancing process. There is information that can heavily influence your purchase decision so it is highly pertinent to coordinate with the solicitor for the results of this check.

Land Registry Checks:

During the conveyancing process, your solicitor will make checks of the title deed and title plan. These are inexpensive documents that tell you the history of the property. This information includes who owned the property, how much they purchased it for and any essential information regarding the property.

It is an essential document required during the conveyancing process as it confirms that the seller is indeed the owner and that they have the right to sell the property to you.

Chancel Repair Liability:

The law states that any property under chancel repair liability is obligated to make payments for the repairs to the church. This law was introduced for land and homeowners inhabiting property that was formerly owned by the church.

It is advised that new buyers have the check completed to assess whether they are liable for the payment. The law has been upheld in several cases of appeal, meaning it is very difficult to get out of payment when you are naïve to it.

Once your solicitor runs the check, you should have results which indicate whether or not you are in an affected area. If there is any suspicion that the property is liable and you go through with purchasing the property, it would be wise to take out an indemnity insurance policy. The policy will insure you against unexpected repair bills, meaning you shouldn’t ever have to face large unanticipated payments.

2. Securing the Mortgage

Ensuring you have access to the correct funds for the purchase of the property is a completely vital stage in the conveyancing process. It is really important to have your mortgage application completed and approved before exchanging contracts.

Any complications after exchange can cause legal and financial consequences. It would be excruciatingly disappointing if you reach exchange and cannot secure the funds for the purchase. The sale would have to be called off, you would likely lose your deposit and face several other consequences for pulling out after signing the exchange contract.

To ensure you are prepared and ready for the request of your funds, you should get started as soon as possible. One of the first things you should do before even beginning to look for a new house is to request a mortgage agreement in principle. This informal agreement with the mortgage lender gives you an idea of how much you would be approved to borrow. This information helps you set your budget and gives you the knowledge that so long as you keep a consistent financial status, you should be approved for your mortgage.

The next stage to acquire the funds for the property occurs after your offer is accepted. Instructing a solicitor to begin the conveyancing process is usually top priority, completing your mortgage application should be second on the list. The sooner the mortgage is approved, the better. Whilst the conveyancing process can take up to 12 weeks, a mortgage approval usually only takes 2 weeks. Having this prepared early on in the conveyancing stage can be vital for a quick and simple conveyancing process. You would be ensuring the funds are available to be requested by the solicitor as soon as possible and preventing complications in the process.

3. Exchanging contracts

The exchanging of contracts during a property transaction creates a legally binding agreement for the transfer of that property. Up to that point, an informal agreement was made but both parties were free to leave the transaction. After exchange, there are consequences and far more extreme penalties should either party attempt to leave the transaction.

Contracts are exchanged after the document has been confirmed and signed by both the buyer and seller. This occurs towards the end of the conveyancing process after a number of items have been agreed. These include:

• The price to be paid for the property and its fixtures and fittings
• The availability of a mortgage and surveys have been completed
• Funds are available for the deposit
• The conveyancing solicitor has completed all essential checks
• Buildings insurance has been arranged
• A date of completion has been agreed and written into the contract.

Both parties will sign an identical version of the contract. Your solicitor will then exchange these with the other party.

4. After Completion

Whilst the buyer moves into their new property, there are only a few final tasks to be completed to finish out the conveyancing process. Each of these ties up the last loose ends and ensures that all of the documents are in order for the transfer of property.

One of the key things the buyer’s solicitor will do after completion is ensure the payment of Stamp Duty Land Tax. This payment is required for the UK government as a tax for property purchase. The amount to be paid is calculated based on the value of your property. There are various value brackets that determine the percentage of the property that is paid in SDLT.

The conveyancing solicitor will also request the title deeds of the property and ensure proper registration of the new owner(s). This documentation will then be sent to the mortgage lender to be held until the balance of the mortgage is paid.

The final stage for the buyer in the conveyancing process is to pay your conveyancing solicitor for their services. The legal process and purchase of the property is now complete and you can settle into your new home.

The Conveyancing Process for Sellers

1. Property Questionnaires

After accepting an offer from a buyer, the conveyancing process starts for the seller. Property questionnaires will be requested by your solicitor in order to ascertain your best knowledge of the property.

The information provided by the seller is designed to provide buyers with the necessary information that a home owner should know about their property. It is required that the questionnaires are filled out truthful and to the best of the owner’s knowledge. If it is discovered that the owner has not been truthful there can be penalties pursued by the buyer’s If this information is revealed before exchange, the buyers could get nervous and even drop out of the transaction.

The transaction forms that will be filled out depend on the solicitor and the property in question. The most common scenario involves the completion of a TA6 as standard. This questionnaire contains general information about the property. The sellers contact details are included, as well as information regarding the council tax, utilities, sewerage, proposed developments and building works. There will also be information focused on boundary or neighbour disputes. This would include any instances of noisy neighbour complaints or boundary disputes from either party.

Other peripheral information is gathered in a number of further questionnaires. For owners who do not hold the property freehold, a TA7 will be completed by Leaseholders or a TA9 for commonhold. A TA10 form is completed regarding the fittings and fixtures that will remain in the property and detail those that are removed. The TA13 gathers information regarding the finalisation of the purchase. This includes how and where the seller will complete, the arrangements for hand overs of keys and the clearance of their mortgage and any liabilities on the property.

2. Pay off Mortgage

Before contracts can be exchanged, arrangements must be made to pay of the mortgage. In many cases, property sellers will use the funds from the sale of the property to pay off the remaining balance of the mortgage. In some cases, a valuation of the property will need to occur so the lender can agree the appropriate amount to be paid.

The redemption figure should be agreed with the lender to be paid on completion. This allows your solicitor to pay the lender using the finances transferred by the seller. The remaining balance will be used to pay estate agents and conveyancing fees. The final amount is returned to the seller.

3. Exchange contracts

At the beginning of the conveyancing process, the seller’s solicitor will draft an exchange contract. This will be sent to the buyer and their solicitor for review. After this, the buyer’s party can negotiate a number of terms. Negotiations may come as a result of home surveys or the conveyancing checks completed by the solicitor. These changes or additions may be added to the contract for approval or negotiated with the seller’s party.

There are also a number of factors to be agreed between the buyer and seller. This namely being a date for completion, typically between a week and a month after exchange. As well as the fittings and fixtures to be left installed at the property. There may also be a clause which mentioned whether the buyer should pay an additional cost for the inclusion of these fittings. From the buyer’s perspective, adjustments may be made in cost based on the results of surveys. Any conditional clauses, such a property repairs, will also be discussed and included at this stage in the conveyancing process.

Once the negotiations are complete, the contract can be signed and exchanged by both parties. Once exchange is complete, the transaction is agreed and becomes legally binding. Neither buyer nor seller can pull out of the exchange without consequence.

In most cases, the buyers deposit should be transferred to the seller after signing contracts. The final things for the seller to do is pack up the property and prepare to move out. This may involve booking removals services or arranging for storage of their belongings.

4. Completion

For a seller, completion day is fairly simple. The main task is to vacate the property and hand over all sets of keys to the estate agent. The buyer will be notified that the property is available. They can then collect their keys and move into their property. Your solicitor will handle the payment of your mortgage. The remaining balance will be transferred into your ownership that day.

Final Thoughts

The conveyancing process can greatly differ from the perspective of the buyer and the seller. It can vary again between each property. On average, the conveyancing process can take anywhere from 2-12 weeks or even longer. The timescale of the process all depends on each check, survey and negotiation that occurs along the way. When taking part in a property transaction, both buyers and sellers should be prepared for unexpected changes and delays. Being flexible to change is the best way to stay relaxed during the conveyancing process.