Our feesContents
1. Title deeds.
2. Local Authority Search
3.Preliminary Enquiries
4. Standard Conveyancing Forms
5. Mortgage
6. Survey
7. Exchanging Contracts
8. The Deposit
9. Completion Date
10. Form TR1
11. Land Registry fees
12. Stamp Duty
13. Notes on Stamp Duty Land Tax
14. SDLT1 Form
15. Due Diligence
1. Title deeds.
These are nowadays nearly always a computerised record of the ownership of the property retained at the Land Registry and for a freehold property it is usually only the Land Registry document that is required. Until recently there was what was known as a Land Certificate or a Charge Certificate. Since December 2003 these are no longer required. For leasehold properties, however, the possession of the original Lease or at least a Land Registry copy of the original is vital and you should investigate its whereabouts and if you have the Lease you should keep it safely.
2. Local Authority Search and other Searches
Your solicitor will apply to the local council for what is known as a local authority search, which answers basic questions about the property and warns you if your particular property is going to be affected by major works, such as new roads, or if the property is subject to planning consent. However, be warned. It will not tell you that there are to be developments to the property next door, or behind and you may be advised to further investigate this possibility.
We should mention a point about the Local Authority Search.
The Local Authority search only gives a certain amount of limited information about the property and certain statutory information about the area. It tells us nothing about adjoining properties and if, for example, there were to be planning application for the building next door, or behind, to be used as a multi-storey car park we could not tell that from the Local Search. It tells us if there is a motorway within 200 yards or if the area is a housing action area but not if there is a motorway within 300 yards or if the roundabout at the end of the road is likely to be completely changed.
Furthermore, it cannot tell us anything about planning applications that are in the pipeline but which have not yet been formally lodged but which may nevertheless be known to the Planning Department. We would suggest therefore that you telephone, or better still call into the Local Planning Office and discuss with them any planning proposals in the area, or for adjoining properties, that will adversely affect your enjoyment of your new home.
Whilst in theory We could make the telephone call it would be better if you did so; (a) because you know the area; and (b) because planning authorities are very reluctant to give informal and sometimes confidential information to solicitors, but are much more willing to be helpful to members of the public.
Increasingly we also recommend other searches including Environmental, Chancel Check and Rail Searches
3. Preliminary Enquiries
These can be handled in one of the number of standard forms. These are effectively a Question and Answer format, which must be answered truthfully by all parties. Misleading and untruthful answers can prove to be very expensive as there have been a number of cases where Sellers glossed over problems with neighbours or problems with rights of way which are inevitably discovered after the purchase has been completed and expensive claims have been made against the Seller for being less than accurate in providing information about the house or flat that is being sold. If you have difficulties with the forms your solicitor will assist you.
4.1 Property Information Form.
A standard form used by all Solicitors. We will supply this for you to complete
4.2 Leasehold Information Form.
A standard form used by all Solicitors. We will supply this for you to complete
4.3 Fittings & Contents List
This is a printed form list in which you will be invited to list all items that you are taking, those which you are leaving and those which you might be willing to sell if the Buyer were willing to pay towards them
5.1 Mortgage
Most people borrow money from a bank or building society to help them buy their house. This is usually quite a substantial sum and the mortgage will be registered against the title of the property. If there are persons over the age of 18 years including your children living at the property who are not owners, they will need to sign a form of consent to the mortgage. They may need independent solicitors advice before they sign this form. They will need to sign that form before the mortgage is taken up by your Solicitor. You will also need to sign the mortgage deed, preferably in your Solicitor’s presence so that the terms of the mortgage can be explained to you and you understand the obligations that you are accepting by taking the mortgage.
5.2 Mortgage Panels
Every Buyer who needs a mortgage will seek support from a bank or other mortgage lender and these Lenders will use a Solicitor, either one that they select or if your solicitor is approved by your chosen lender then your solicitor will be appointed. The Mortgage Lenders need to approve every Solicitor who they appoint and when approved the solicitors are added to the Lenders Mortgage Panel after careful vetting. Nowadays nearly every lender makes it a condition of panel membership that Solicitors on their panels are Members of the Law Society Conveyancing Quality Scheme (CQS) if a solicitor firm is not a member of CQS then it is not likely to be appointed by the lender. WGS are accredited members of CQS and thus approved by all major lenders and also by most Secondary Lenders
6. Survey
This is usually carried out by a surveyor who you have instructed. Your bank or mortgage lender will carry out a valuation on their behalf to ensure that they are getting a property which equates to the value of the loan. However, this provides you with no information or security. If you are buying a property you are advised to obtain your own survey. Most lenders will provide, at your expense, either a valuation survey which really is for their benefit, or a full survey, at a higher cost, which is your survey. We urge you to have a full survey. This serves three purposes:
(a) It will tell you if there are any defects in the building which you should know about.
(b) It gives you ammunition to negotiate price if there were hidden defects that you could not have seen when you first made your offer of purchase.
(c) If there are hidden defects which have been spotted by your surveyor but which you could not have known about then since you are entitled to rely upon your surveyor=s expertise in preparing a survey you might have a negligence claim if such defects should appear and prove to be expensive.
7. Exchanging Contracts
In the last century when the parties agreed to be bound to buy or sell a property the solicitors would meet and literally pass over a desk an agreement that each client had signed so that they, at that time, exchanged contracts and handed over the deposit. Nowadays, sadly, the two Solicitors almost never meet. Exchange of contracts is effected by telephone and each solicitor undertakes (promises) to deliver to the other the contract which his client has signed and the Buyer’s Solicitor also promises to deliver the deposit to the Seller’s Solicitor.
8. The Deposit
Usually 10% of the purchase price, which will be held by your solicitor in a stakeholder client account, and it can be used by you in the purchase of another property at the same time as payment of, or part payment of, your deposit. If your seller agrees to accept a deposit of less than 10% you must be warned that if you fail to complete the contract will contain an obligation for you to pay the full 10% which will be recoverable from you by legal action if, having failed to complete, you have not paid a full 10% deposit. The Contract will also provide for the Seller to be able to make other claims against you in the event of your delaying completion or failing to complete. The Seller will be entitled to be compensated for expenses and losses that the Seller has suffered if you have not fulfilled your obligation under the Contract.
9. Completion Date
When the parties are ready to exchange contracts they will need to agree on a completion date. That date will be the date of the actual move when the money will be transferred and the keys will be handed over. On the day of completion your Solicitor will receive the money, will redeem your mortgage if applicable, will deduct our fees as agreed with you, and, if selling a property, the money which remains will be forwarded to your bank or as you direct. Obviously if you are purchasing a property on the same day then your Solicitor will use the money received from your sale for your purchase.
10. Form TR1
This is the form that you will be asked to sign which, when selling, transfers the property to your Buyer and when buying transfers the property to you. The TR1 must always be signed by a Seller but frequently must also be signed by a Buyer when the Buyer is giving assurances to the Seller that the Buyer will in future fulfill the obligations imposed by the ownership of the property.
11. Land Registry fees
These are fees on a standard scale, which are charged by the Land Registry for registering your title in its computerised records of all properties registered in the UK.
12. Stamp Duty
Now known as Stamp Duty Land Tax. “SDLT”
This is now a major factor that you must take into account when you buy a property. Stamp duty is the most expensive element of house purchasing over and above the purchase price. As the rates change almost annually we recommend that you go to the attached link:
http://www.hmrc.gov.uk/sdlt/calculate/calculators.htm
You will need to pay stamp duty to your solicitor before completion as your solicitor if acting on behalf of a mortgage lender must be able to guarantee that stamp duty will be paid because without the payment of stamp duty the property cannot be registered.
13. Notes on Stamp Duty Land Tax (“SDLT”):
1. SDLT is a new tax effective from December 1st 2003 to replace Stamp Duty and is chargeable on all transactions for Sale of Land.
2. In theory the Tax Return SDLT 1 it is to be completed by The Client (the Tax Payer) who MUST SIGN a Declaration like any other Tax return. In practice we as Solicitors must complete most of it. WHY? Because we are answerable to Mortgage Lenders and we have a duty to ensure Registration of Title and cannot be left with a situation where the Return is not completed, the Tax not paid, the Tax Paid Certificate is not returned by the Revenue and we cannot register your title and the Mortgage.
14. SDLT1 Form
This is a new form imposed by the Land Registry. Before December 2003 your solicitor prepared a short form, which was lodged at the Inland Revenue and recorded the address of the property and its value for stamp duty purposes. Since 2003 a form must now be lodged comprising 71 questions, which is effectively a tax return. Furthermore it must be signed by you, the Buyer. It cannot be signed by your solicitor save where you have given a formal Power of Attorney to your solicitor to sign all other documents. At WPFggs we will assist you in completing the bulk of the form but it must be completed by you, signed and returned by us promptly as the form and stamp duty payable must reach the Inland Revenue within 28 days of completion otherwise penalties and interest are charged. [see above]
15. Due Diligence
Until recently the relationship between the solicitor and client was a pleasant and informal one. Since the introduction of the government’s money laundering regulations, whilst Solicitors hope it will still be pleasant, it has to be more formal and we, as solicitors, have to keep on our file, for a minimum of 5 years, evidence of your identity comprising a photocopy of the photo page of your passport having seen the original and a recent form of evidence of your name and address such as a domestic or mobile telephone bill.