The Guide to Conveyancing
You will have made or received an offer, and secured a mortgage in principle from your bank or building society. They will all say that from now on the going is easy and just takes a few weeks while the ?lawyers? tie up loose ends. It may not be that simple. This booklet aims to explain the work your conveyancer will be doing for you and help you phrase your questions and ask them at the appropriate time.
The Two Stages
There are two stages to any conveyancing transaction:
- Exchange of Contracts
Before the invention of telephones, clerks would be sent off, after the parties had agreed to buy and sell (exchange of contracts ), to investigate title to the property by examining documents and making sure that the Duke of Rutland really had bought from the Earl of Milton Keynes 15 years earlier. Traveling by hansom cab they needed at least a month to ensure that the deeds were all in order. Only then could the next stage (completion ) take place.
Why does the Conveyancing process take so long
The two-stage process is retained because it separates the uncertainty which always exists before both sides are committed to a contract from the practical matters of handing over the money and physically moving house. In this way as few costs as possible are incurred before exchange of contracts.
What if the Land is Unregistered?
Where land is unregistered,only the seller (if there is no mortgage-otherwise your Bank/Building Society) will hold the deeds. Each time the land is sold, ownership must be confirmed by studying all documents affecting the land for at least the past 15 years. It may be necessary to check back through deeds for a much longer time. This can be a complex and time-consuming task involving considerable knowledge of property law. It may therefore involve extra cost, but your conveyancer should alert you to this early on. It is increasingly rare nowadays to come across unregistered property and usually when it is encountered it must be converted into a registered title immediately after completion. On a first registration of the title the Land Register investigates and records the details of a person's title to land on a Register of the title. This Register will also include a note of all rights, or claim to rights, held by other people. After a title has been registered subsequent buyers need only refer to the Register to check it (i.e. there will be no laborious checking of title deeds). The once and for all registration of a title also carries state guarantee that the Register is correct, backed up by a compensation scheme. With unregistered property a sale and purchase is called a conveyance, whereas with registered land it is known as a transfer.
Before you Commit Yourself
You cannot have a contract to buy land unless it is in writing or there is some written evidence of it. This rule gives the buyer time to make the necessary investigations and arrange finance before becoming legally committed and gives the seller time to find somewhere else to live. The phrase subject to contract,is used to ensure that buyer and seller are not committed to a contract too early. It also, incidentally, enables gazumping i.e. where the seller accepts an increased offer from another buyer.
Before committing yourself to a contract there are three main points to consider:
- Your Mortgage
- The Property Survey
- The Conveyancing Report
You will receive a written offer of a mortgage which in theory the Bank/Building Society can later withdraw. Before accepting it you should make sure it allows you enough money and is not subject to any conditions that you are not able to satisfy. Banks/Building Societies may say they will withhold some or all of the money until specified works are completed, i.e. damp proofing, re-wiring, timber treating, etc. You must discuss any such retention with your conveyancing solicitor as soon as possible. It may be possible to sort the problem out before completion or could involve renegotiating the price or arranging a bridging loan until the specified works are finished. You must accept the mortgage offer (within the time limit-if any- given by the Bank/Building Society), by signing one copy and sending it back to them before they will instruct their conveyancers. Generally they will ask your conveyancing solicitor to act for them. It will cost more it two different conveyancers are used because there will be some duplication of work
You will have seen the property most recently and your inspection of it is very important. If necessary, go back again and look out for anything out of the ordinary. In particular check:
- Wiring: old round plugs and switches generally indicate that rewiring is needed; Damp: look for blistering wallpaper just above the skirting boards; it could mean there is rising damp;
- Wood: look at the window and door frames and with a thumbnail see how soft the wood is. If it gives they might need replacing
- Roof: have a good look from the outside. If it sags or there are several loose tiles you will need to know more
- Brickwork: flaking bricks are going to let in water more easily. Check for re pointing. Climbing ivy can be very attractive but also very destructive.
If any of these problems come to light you will definitely need a full structural survey. With older property you will sometimes also need to have a specialist firm inspect the walls and timbers for possible damp, woodworm, dry rot, etc.
Conveyancing Matters: Our job in a Nutshell
Things will probably happen in this order: Your conveyancing solicitor will:
- Send for the draft contract and other papers from the seller's conveyancing lawyers
- Make local searches and enquiries
- Make preliminary enquiries regarding the property, and the draft papers sent back by the seller's conveyancers
- Receive and study the property seller's replies to those enquiries
- Seek and obtain instructions from your Bank/Building Society
- Make other property searches and enquiries where appropriate
- Report back to you with the draft contract for you to sign
- Discuss your surveyor's report with you if necessary
- Obtain the deposit from you
- Exchange contracts.