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Eastenders is no guide to buying a home in real life

That scene in TV’s Eastenders on Christmas day when Phil Mitchell handed over the keys of his pub to buyer Mick Carter in exchange for a large bag of cash really should have carried the warning “DO NOT TRY THIS AT HOME. ”

I mean, buying dodgy gear off a bloke in a boozer is one thing, but buying the boozer from a dodgy bloke is something altogether different.

For those who don’t watch this programme, the resident hard guy of Albert Square, Phil Mitchell, has been owner of the Queen Victoria pub (always known as “the Vic”). He planned to sell the pub and accepted an offer from local businesswoman/black widow Janine Butcher. But Phil and says he has got a higher offer from someone else, so Janine will have to come up with another £250k within 24 hours – in cash –or the deal’s off.

Janine’s plans to get the money together are thwarted first by being blackmailed over her confession that she murdered her husband Michael, and then being arrested after the recording of her confession was passed to the police.

So while Janine is being carted away by the Old Bill, Phil ‘sells’ the Vic to new character Mick Carter in exchange for a large bag of cash – and apparently on Christmas Day!

It seems that the producers of these soaps always sacrifice the realities of buying a property for dramatic licence. No-one expects TV dramas to include all day-to-day details that are involved when buying or selling a house. But all too often they just ignore the realities completely and give viewers a totally misleading impression.

Not only Eastenders is at fault here. Emmerdale once showed people moving into a home the day after they had bid for it at auction – it doesn’t happen like that in real life!

Would you expect to hand over your cash and get nothing in return?

But why is buying a home, or any other building, so different from buying anything else? Why could Mick find he has handed over his money and got nothing in return? And why could both Phil and Mick soon be getting visits from the police and the Inland Revenue?

There are two important points involved in the legal transfer of land and any sort of building. First of all any agreement for the sale and purchase of such property must be in writing and comply with the provisions of Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Secondly the actual transfer of ownership can only be done by a transfer deed in the correct form and signed by the seller, which then has to be registered at the Land Registry.

You need a transfer deed to acquire ownership of a home

Just handing over a large bag of money and getting the keys won’t do the trick. If Phil decides to pocket the money and not sign anything Mick won’t be able to do a thing – at least legally. He doesn’t have a written contract, so he can’t easily sue Phil. And without the transfer deed he won’t be able to get the change of ownership registered.

Being in possession doesn’t help – Phil could easily turn round and say that Mick is just there to manage the pub for him, and without a receipt for the cash there is no evidence of the payment.

Does the seller actually own the property?

But does Mick even know if Phil actually owns the Vic? One of the main reasons for instructing a solicitor to act on any property purchase is so that the solicitor can check the seller’s title, to make sure that the seller can actually sell the property.

Checking the title also involves finding out whether the seller has any mortgages or other debts secured on the property. If Mick hasn’t had these checks carried out he could find himself liable to pay off Phil’s mortgage!

Land and buildings can also be affected by many other legal matters – for example the owners of a neighbouring property could have a right of way, or a property could be subject to covenants which restrict its use in some way and prevent further development. All such matters can affect the value of a property.

It is also necessary to check whether the seller has a freehold or leasehold title. That could make a huge difference to the value for a commercial property such as a pub, but even for residential properties it will affect the value. A lease is for a fixed period of years, and when the length left on a lease of a flat falls below 70 years its value can fall dramatically.

Without a local searches your dream home could turn into a nightmare

Another reason to instruct a solicitor before buying any property is so the solicitor can make searches with the local council to find out if there is anything which could adversely affect the property.  

For instance an older building (such as the Vic) could easily be a Grade II or even Grade I listed building which would severely affect any plans for alterations or improvements. Perhaps the council has already served a planning enforcement notice in respect of some previous breach of planning regulations? 

On the other hand the council might be planning to purchase the building compulsorily as part of an improvement scheme, or it could be adversely affected by plans for a new road.  

Without a local search Mick could now find out that his dream property won’t be such a good buy after all.

Getting your transfer registered is crucial – and don’t forget Stamp Duty

Even if Phil does subsequently sign a transfer deed, Mick has still got to get it registered. Until the transfer is registered the buyer does not legally own the property.

But before a transfer can be registered any stamp duty payable must be paid to H. M. Revenue & Customs – the Land Registry will not register any transfer without proof of payment.  

Normally a buyer’s solicitor will arrange for payment of any stamp duty as part of the conveyancing work. However buyers can arrange to do this themselves through the HMRC website if they want to (and provided that they don’t have a mortgage. )

Buyers who don’t have a mortgage can also submit transfer applications to the Land Registry without going through a solicitor. But in order to try and prevent fraudulent transactions the Registry now requires evidence of ID for any party to a property transfer who is not represented by a solicitor or licensed conveyancer. This will entail an unrepresented person completing a form and producing evidence of ID either to a solicitor or at a land registry office.

Why you shouldn’t try buying a property with a large bag of cash

Phil and Mick might well think that they can get solicitors to sort out the legal work afterwards. But being told that the purchase price was paid in cash is going to look very suspicious. Solicitors who find out that this has been going on are required to make a suspicious activity report (SAR) to the National Crime Agency, who can then decide to make further investigations to find out the source of this cash.

Criminals have often tried to launder money from drugs, prostitution and other illegal activities through property transactions. So solicitors are required to be on the alert for any potential money-laundering schemes. So don’t expect to complete your purchase by taking a large sum of money to your solicitor, they won’t be able to accept more than £1, 000 in cash.

And don’t expect to complete your purchase on Christmas day or Boxing day – apart from the fact that solicitors’ offices are going to be closed then, they are officially bank holidays which means no money transfers can take place.  

The writers of Eastenders could have quite a few plot lines from this transfer – perhaps Phil disappearing with the money and refusing to sign anything so Mick can’t get the transfer registered. Or what about Phil not declaring the sale for Capital Gains Tax and getting done for tax evasion (that’s what they got Al Capone for!) But this probably isn’t exciting enough for them.

Another legal area which never seems to bother anyone on these TV programmes is licensing law – surely if you buy a pub you need to get the licence transferred? But that could open another whole can of worms!

It is accepted that soaps such as Eastenders are supposed to be entertainment and not factual. But it is a pity when such programmes have such misleading ideas about how property transfers take place. It seems to give the impression that the legal side of transfers is quite unimportant – a bit of legal mumbo-jumbo – when in fact it is very important for both buyers and sellers to have proper legal advice throughout.

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