The intention of this Conveyancing Guide is demystify some of the terminology used in Conveyancing
The conveyancing process commences with the buyer and seller instructing a conveyancing solicitor or conveyancing lawyer . Unless there are exceptional circumstances the same conveyancing solicitor cannot act for both parties ( although the Council for Licensed Conveyancers have more lenient rules in this regard ) .
The purchaser's conveyancing lawyer or conveyancing solicitor should confirm they are instructed to the seller's conveyancing solicitor ( property lawyer ), at which point the seller's conveyancing solicitor will issue the contract package. Pre Home Information Packs and electronic storage of Deeds it was necessary to wait for title deeds to be delivered to the seller's conveyancing solicitor before the contract package could be issued however except in the case of unregistered land this is no longer the case. A conveyancing solicitor or property lawyer should be able to issue a contract within 48 hours of receiving the estate agent’s sales memo which details the purchaser’s solicitors name address etc. .
The contract package consists briefly of a draft contract, copies of the legal title ( known as Official Copies ) , copies of any deed/documents which affect the title, a Sellers Property Information Form ( SPIF ), Lease, Sellers Leasehold Information Form ( where the property is leasehold ), Fixtures, Fittings and Contents Form, all completed by the seller. If a Home Information Pack (HIP) is supplied it will include the result of Conveyancing searches which are otherwise carried out by the purchaser's solicitor. The more proactive conveyancing solicitors will also provide office copies relating to the landlord or freeholder’s interest but more importantly the management information for the property.
If not already obtained the seller's conveyancing lawyer may order the original deeds at this point and a provisional mortgage redemption statement should be requested for the purpose of budgeting.
Once the aforementioned contract papers are in hand purchaser's conveyancing lawyer will order the conveyancing searches ( other than those contained within the Home Information Pack ) and also raise any necessary conveyancing enquiries based on then initial review of the papers and in particular the Property Information Questionnaire. It is a good idea for the purchaser's conveyancing lawyer to draft the Transfer Deed for approval at this point.
It is then up to the seller's conveyancing solicitor to answer the Additional Enquiries. Some may be technical points relating to the leasehold contract and others may be relating to the state and condition of the property, comments on the fixtures and fittings list, enquiries about disputes etc. revealed in the in the Sellers Property Information Form, Sellers Leasehold Information Form or the Property Information Questionnaire (PIQ ) . These additional conveyancing enquiries will be passed to the seller to answer in his own words. The seller must be careful to ensure the answers he or she provides are accurate and that there are no obvious omissions as it will generally be a condition of the contract that the buyer is entitled to rely on the replies. The seller's conveyancing solicitor or property lawyer should check any replies and caveat them where necessary, for example if the question is asked: " Has the property ever suffered form subsidence ?" and the seller answers "No" this implies that the seller has detailed knowledge of the property even before his or her ownership. Usually this will not be the case and might be amended to "The seller is unaware of any problems however no warranty is given in this regard bearing in mind that the seller is not qualified to answer this question and the buyer must therefore rely on his own inspections and surveys". The same logic should apply to the seller when completing the Sellers Property Information Form, Sellers Leasehold Information Form and Property Information Questionnaire ( PIQ ).
According to conveyancing protocol and the recommendations of the Law Society, the buyer's conveyancing solicitor or conveyancing lawyer should not use a standard pre-- formatted pre-contract enquiry sheet. Such forms contain enquiries relating to the state and condition of the property, which are issues for a surveyor rather than a conveyancing solicitor. They not only create additional work for the purchaser's conveyancing solicitor or property lawyer but also place an onus on the seller to answer questions which he is not really qualified to answer - for example questions as to the condition of the property which ought to be covered by a survey or questions about events at the property prior to his ownership, and they should be rejected in the first instance. If the purchaser's conveyancing lawyers insist, as some will, then it may ultimately prove simpler to allow the seller to answer them, but in this case the seller’s conveyancing solicitor must be certain to check the replies carefully to ensure the seller is not making a statement which is clearly beyond the scope of his knowledge.
On receipt of the search results and in the case of a leasehold property, the Management Information the purchaser's conveyancing lawyer may need to raise some further enquiries. Once all the outstanding points are answered, and provided the purchaser's conveyancing solicitor or conveyancing lawyer is in receipt of his client's Mortgage Offer, he or she will be in a position to report to his client. It is important to note that there are always two copies (or three if a mortgage broker has arranged the mortgage) of the offer produced. The offer that is issued to the conveyancing solicitor or property lawyer is different to that issued to the borrowing client in two areas. Firstly, it will contain the required documents for signing by the buyer’s conveyancing solicitor and the buyer being Certificate of Title and Mortgage Deed ( sometimes referred to as a Legal Charge ) respectively and secondly it will contain a covering letter addressed to the conveyancing solicitor which is the lender's instructions to the conveyancing solicitor to act on its behalf. Clients often forget that the conveyancing solicitor is acting for the lender as well as buyer. This is why often the Terms of Engagement of a conveyancing law firm makes provision for where a buyer does not want certain matters disclosed to the Lender. In such circumstances the conveyancing solicitor or property lawyer has no option but to end their retainer with both parties due to the conflict of interest.
With no formal instructions the conveyancing firm can not act for a lender. The Mortgage may contain Special Conditions which the conveyancing solicitor (or purchaser) needs to satisfy before the funds will be released by the lender. In addition to the specific mortgage conditions the buyer’s conveyancing lawyer has to check the Lenders general conditions which can be found at the CML Lender’s web site. It is nit uncommon for the general conditions or specific conditions to result in the buyers conveyancing solicitor having to raise fresh enquires even if it appeared to all concerned that there were no further enquiries to be raised.
Once all concerns have been satisfied a Report on Title should be prepared by the conveyancer for the purchaser.
Once the purchaser has signed his contract and paid his deposit ( normally 10% of the purchase ) to his conveyancing lawyer’s account all parties should be ready to exchange contracts.
Exchange of contracts takes place over the telephone between the respective property lawyer s. The formalities are completed by each party forwarding the other his client's part of the contract, but it becomes legally binding at the end of the telephone call.
In order to complete the seller's conveyancing lawyer must be holding a Transfer Deed ( and other possible leasehold documents such as a Deed of Covenant or License to Assign – depending on the provisions of the lease ) signed by the seller. landlord and purchaser.
The seller’s conveyancer must also have obtained a redemption statement in respect of the seller's mortgage/s, as he must give a binding assurance on completion to redeem all charges secured.
If the property is leasehold the seller’s property lawyer should also check whether there are any outstanding service charges. Again this is because the seller would be contractually obliged to ensure that the service charge is clear. That being said the prudent leasehold conveyancing solicitor should check themselves rather than just rely on a contractual obligation on the part of the seller. Prevention is the best cure in this case.
A few days before completion the purchaser's conveyancing solicitor should carry out the completion searches as well as submit the Certificate on Title ( sometimes known as a Report on Title ) to the lender. Many lenders require that the Report on Title be sent 5 working days ( 7 normal days ) prior to the day on which funds are required.
Most banks or building societies will be send the mortgage advance by way of electronic transfer ( or BACS ). The danger with electronic transfers is that this method only guarantees that funds will reach the destination on the day of issue - it does not guarantee delivery by a set time. Many conveyancing lawyers therefore request the mortgage advance a day or two prior to completion in order to reduce the risk of placing the purchaser in breach of contract by not meeting the completion date.
On the set completion day the purchase monies ( less the deposit paid on exchange ) will be sent by telegraphic transfer to the seller's conveyancing lawyer. The seller’s conveyancing solicitor should telephone the seller as soon as the monies have arrived to notify him or her of completion and advise the estate agents to hand over the keys to the purchasers. Penalties do of course apply for late completion including interest penalties and damages set out in the contract. Once the completion monies are with the seller's conveyancing lawyer he or she must redeem all financial charges relating to the property.
Following completion the buyer’s conveyancing must deal with the registration of buyers new ownership at the Land Registry.
If the property is leasehold the chances are that lease relating to the property may well contain some specific post completion formalities for the buyer’s leasehold conveyancing lawyer . .
After the post completion formalities have been concluded the buyer’s Conveyancing lawyer should supply evidence of change of ownership to both the buyer and the lending bank.