Our guide to conveyancing: what do conveyancing solicitors do?
It’s early 2014, and there are signs that the economy in the UK is recovering. One of the indicators of this is that the number of people being granted mortgages in 2013 was the highest for several years.
So, people are buying houses again. This means we are using solicitors for our property deals – we are using conveyancing solicitors.
Here is our complete guide to how a conveyancing solicitor will help you.
|1) What is conveyancing?||7) Conveyancing for a buyer|
|2) Conveyancing for a seller||8) Receiving the contract|
|3) Drafting a contract||9) Enquiries|
|4) Answering enquiries||10) Searches|
|5) Exchange||11) Exchange|
|6) Completion||12) Completion|
Conveyancing is the legal process of buying property. It happens when the title or ownership in property is transferred to the buyer or new owner.
As it is a legal process, and a complex one at that, there are solicitors who specialise in this area of property law. Conveyancing solicitors have the experience and legal know-how to protect their clients’ interests throughout conveyancing transactions and make sure that the transactions are completed properly.
The answer to the question “what do conveyancing solicitors do?” changes depending on whether you are talking about the seller’s solicitor or the buyer’s solicitor. Let’s look at the role of the seller’s solicitor first.
The number of administrative tasks that a conveyancing solicitor for a seller has to undertake is fewer than the number of tasks undertaken by a buyer’s solicitor.
However, these tasks are still vitally important for the success of the sale and therefore a conveyancing solicitor’s expertise is necessary. It is advisable to hire a solicitor as soon as you decide to sell your house to avoid unnecessary delays to the conveyance. They will communicate with the buyer’s solicitors on your behalf throughout the process.
One of the first things the seller’s solicitor will do is draft the contract of sale.
They will use any letters between the seller and buyer about the sale to draw up a draft contract that reflects the sale agreement between the two parties.
No two contracts of sale for property are the same as no two properties are the same, and so the seller’s solicitor will spend time ensuring the draft contract reflects the property in question and the sale agreement.
It’s important to note that it is just a draft at this stage and that it may change substantially before both parties eventually sign it.
Although the details of a sale contract will vary with each property, there are a number of things that are always included. The contract will consist of two parts – the particulars of sale, which set out the property details, and the conditions of sale, which set out the proposed date of completion and the deposit amount that must be paid by the buyer on exchange.
The seller’s solicitor will receive a list of questions from the buyer’s solicitor about the property. These questions will be about a range of issues including disputes, the property’s boundaries, utilities, contents included in the sale, planning constraints and permissions, rights of way, and restrictive covenants.
The seller’s solicitor must answer these enquiries within a reasonable time and will need the seller’s help to answer them.
During the buyer’s enquiries they may discover an issue with the property that could cause them a problem once they have brought the property.
One example could be if there is a restrictive covenant over the property. A restrictive covenant is a promise not to do something with the land. It “runs with the land” which means the promise still applies even when the property is sold from one person to another.
In order to cover the buyer if and when the problem manifests in the future, their solicitor may ask the seller to buy indemnity insurance. Indemnity insurance will pay the buyer should the problem arise after the sale is complete and is often required in order for the sale to continue to completion.
Exchange occurs when both the buyer and the seller are happy with the draft contract, are ready to make the agreement between them legally binding, and have agreed a date for completion.
The solicitors for both parties will make sure they have identical copies of the contract and will get their client to sign their copy. The contracts are then exchanged and signed again. The seller’s solicitor will receive the deposit from the buyer’s solicitor on exchange.
After exchange the seller’s solicitor will receive the draft transfer document from the buyer’s solicitor. This document transfers the title from the seller to the buyer. Once the parties’ solicitors have agreed on a draft, the buyer and seller will need to sign it.
On completion the seller’s solicitor will receive the balance of the sale price from the buyer’s solicitor. They will then need to send the buyer’s solicitor the title deeds and transfer document in order to transfer the title of the property to the buyer.
On completion the seller no longer has any ownership rights over the property.
The conveyancing solicitor for the buyer has quite a bit more work to do than the seller’s solicitor because of the legal principle ‘caveat emptor’ or ‘let the buyer beware’.
This means that when a person buys a property, they are buying it as they see it, faults and all. Therefore the buyer’s solicitor must make sure that the buyer knows any and all issues with the property before they buy it.
This way the solicitor can ask the seller to reduce the asking price of the property or indemnify the buyer against future costs.
The buyer’s solicitor receives the draft contract of sale from the seller’s solicitor. The buyer’s solicitor will review the contract and negotiate changes with the seller’s solicitor throughout the conveyance process until exchange.
The buyer’s solicitor will send the seller a list of questions called the ‘preliminary enquiries’, which are intended to find out as much as possible about the property and any potential issues with it.
These standard enquiries include questions about the boundaries of the property and who is responsible for maintaining fences and hedges. In addition, the enquiries will also ask about any disputes concerning the property, for example disputes with neighbours (often to do with boundaries and hedge or fence maintenance).
Importantly, the enquiries will determine if there are any restrictive covenants over the property or any shared rights of access. Restrictive covenants stop an owner from doing something with or to the property and ‘flow with land’, meaning they do not go away when the ownership of the property changes hands.
Shared rights of access are access routes to the property that are shared, such as a driveway. These are things the buyer will need to carefully consider before buying the property.
The preliminary enquiries also ask about the property’s utilities, contents included in the sale, and planning constraints and permissions.
If the buyer’s solicitor thinks the enquiries bring up any issues, they will advise the buyer on the best course of action to mitigate these issues.
Another important role of the buyer’s conveyancing solicitor is to apply for the necessary searches. Searches tell the buyer about the property and the surrounding area and are important because they can raise important issues which may influence the buyer’s decision to go ahead with their purchase.
There are a number of searches that the buyer’s solicitor may carry out in relation to the property. However, not all of the searches will be necessary for all properties.
There are some searches which are only relevant for some properties and the buyer’s solicitor will use their expertise to determine which searches are necessary. Searches which are more subjective include commons searches and coal mining searches.
Standard searches include local authority searches and water authority searches.
Local authority searches will tell the buyer’s solicitor if there are any major road works planned near the property or if a new major road is going to be built in the near vicinity, as this can affect the value of the property.
A local authority search will also reveal a number of other issues, such as any planning permissions or refusals, contaminated land and radon gas, and the building control history.
The buyer’s solicitor will assess the results of all the searches and make changes to the draft contract if necessary. They may also require the seller to buy indemnity insurance to protect the buyer if any of the potential issues arise in the future.
Once the exchange of contracts has occurred, the sale agreement between the buyer and seller is legally binding. Therefore the buyer’s solicitor will make sure the buyer is completely satisfied with the agreement before they sign the contract.
On exchange the parties’ solicitors will both have an exact copy of the agreed upon draft contract. They will get their client to sign their copy and then the contracts will be exchanged so both parties have signed both contracts. The date of completion is also set at exchange and the buyer’s solicitor will transfer the deposit to the seller’s solicitor.
After exchange the buyer’s solicitor will send the buyer a mortgage deed to sign. This will contain the final terms of the formal agreement with the buyer’s lender.
The conveyancing solicitor will also need to draw up the transfer document and send it to the seller’s solicitor after exchange.
In addition, final searches will be completed by the buyer’s solicitor at this stage in the conveyancing process.
Final searches include Land Registry checks, which will reveal if there are any registered interests, such as a mortgage, against the property of which the buyer is not yet aware. The buyer’s solicitor will deal with any problems brought up by the final searches.
On completion the buyer’s solicitor will transfer the balance of the purchase price to the seller’s solicitor. They will also receive the transfer document and title deeds from the seller’s solicitor. There are then a few final things they must do on the buyer’s behalf to complete the transfer of title.
- Firstly, the solicitor must register the transfer of ownership and the mortgage lender’s interest with the Land Registry
- They must pay the stamp duty land tax and send the deeds to the buyer’s mortgage lender, which will be kept until the buyer sells the property or pays off the mortgage
- Finally, the buyer’s solicitor will send the buyer a statement of completion and receive their fee from the buyer. They will also deduct any disbursements
The conveyance has now come to an end and the buyer has become the new owner of the property, with the help of their conveyancing solicitor.
As you can see there is an awful lot for a conveyancing solicitor to understand and deal with. Some people do try to undertake some of the jobs themselves, but this is fraught with problems and can really hinder the process.
It makes much more sense to let a professional deal with everything. They will be much more likely to ensure that nothing goes wrong and that things run smoothly. The last thing you want with the pressure of buying or selling a property is for unnecessary problems.
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