Residential Property FAQs
The conveyancing department deals with all types of property transactions including multi-chain transactions, re-mortgaging and leasehold transactions. Our clients include first time home buyers, private clients, developers and property investors.
Frequently Asked Questions
What is the difference between a freehold and a leasehold property?
Freehold means that you fully own the property and the land. Usually it is a house. A leasehold property is usually a flat or maisonette and you own it for as long as is specified in the Lease. You are granted the right to live there by the freeholder and the Lease provides for an annual ground rent (usually modest in the case of residential property) to be paid to the freeholder, specifies the rights and obligations of the freeholder and the leaseholder and any rules and regulations applying to leaseholders and occupiers and sets out who is responsible for insuring, repairing and decorating different parts of the property and how the cost of expenses incurred by the freeholder is to be shared between the leaseholders and when the contributions (service charge contributions) are due.
What does a purchase involve?
A purchase will involve us writing to the seller’s solicitors to request a draft contract package. We will then raise enquiries and undertake title investigations. We will also request searches (except where acceptable searches have been provided by the seller as part of a Home Information Pack) which include a local authority, drainage, environmental and chancel liability search. Once all this information has been collated we will then provide you with a report on the title and it is usually at this stage that we also provide you with the contract for your signature. Once you have signed the contract, you will then be in a position to proceed to an exchange of contracts subject to all other parties in the chain also being ready to exchange contracts. If you are buying with the benefit of a mortgage, we will also, in almost all cases, act on behalf of your Lender. Once the purchase has completed, we will deal with the Stamp Duty Land Tax requirements and we will also register your title to the property at the Land Registry.
What is a HIP and when is it needed?
A HIP is a Home Information Pack. The HIP is required before the property is placed on the open market for sale. We can prepare the HIP, which includes an Energy Performance Certificate giving an energy rating for your property, together with a sales statement, an index, title details relating to your property, a local authority, drainage search and chancel liability search. Please contact a member of the residential property team for further information
What does a sale involve?
We will apply to your Lender for your title deeds and prepare a contract package for your buyer’s solicitors. We will also ask you to complete Property Information Forms (preferably at an early stage as part of the preparation of a HIP) which will form part of the contract package. These will then be sent to the buyer’s solicitors, who will raise enquiries. We will respond to the enquiries, liaising with you at the same time. We will deal with the exchange of contracts and all the completion requirements, which will include redeeming your mortgage and settling the Estate Agents’ invoice.
I have agreed a sale. What do I need to do now?
Once you have agreed a sale of your property, we will then send you our information package, which will guide you through the conveyancing process in greater detail. Our information pack will also include the Property Information Forms (including the Fittings and Contents Form) which you will need to complete if these have not already been prepared as part of your HIP and which form part of the draft contract package. You will need to provide us with confirmation of your identity, together with details of your existing mortgage, if applicable. We will then apply for your title deeds and prepare a full draft contract package. If you are also purchasing a property, you will need to arrange your survey and we can provide you with guidance on this. You will also need to apply for your mortgage. We would also recommend you complete some rough calculations at this stage to ensure you have sufficient funds available for the purchase.
How long does it take?
It is difficult to provide an absolute time frame, as it will depend on a number of factors which will vary with each transaction. However, we generally say that a freehold purchase or sale transaction will take between 6 to 8 weeks to complete. A leasehold transaction usually takes a little longer.
What does exchange mean?
This is the day on which the contracts for the sale and/or purchase are “exchanged” between solicitors. All parties become legally bound to proceed with the transaction and it is also at this point that you agree (as part of the contract) the completion date, which is generally a couple of weeks following the exchange. On exchange of contracts you will pay a deposit. The exchange takes place by telephone and you do not need to be present. We will not exchange contracts without first confirming your instructions to do so.
What is the deposit and when do I need to pay it?
The deposit is paid on exchange of contracts and normally represents 10% of the purchase price. It can be less if the buyer is getting a mortgage of more than 90% of the purchase price If you are a first time buyer and will be receiving a mortgage for between 95% - 100% of the purchase price, you need to tell us this as soon as possible. Alternatively, if you have a sale linked to a purchase, we will use the deposit from your sale for your purchase. We will require cleared funds for the deposit but we will confirm this to you when you are ready to sign your contract.
What is the difference between exchange and completion?
Exchange is the date on which all parties become legally bound to proceed with the transaction and the completion date is the moving date and the date the funds are transferred. The exchange date will precede the completion date and the completion date is usually a couple of weeks following the exchange date. If you are buying a new build property from developers which may mot be structurally complete when your offer is accepted, then the completion date will be “on notice”. This means you will be given approximately 10 working days’ notice of the moving date, which then allows you time to finalise your purchase monies and for us to request your mortgage advance.
What do we need to do on exchange of contracts?
Once contracts have been exchanged, you will need to make sure the building insurance for the new property is placed on risk. You will be responsible for the property even though the sellers may remain in occupation until completion. It is also at this stage that you can firmly book your removals. You will also need to organise the balance of your finances and will need to make sure we are in receipt of cleared funds the day before the moving date. We will provide you with a financial statement confirming the amount of the balance monies required following exchange of contracts. You will also need to contact your service providers (local council and utility companies) and notify all relevant parties of your change of address.
What happens on completion?
On a sale, we will settle the Estate Agents’ invoice and redeem any existing mortgage. We will also liaise with the Estate Agents to release the keys to your property once the (balance of the) purchase price has been received. On a purchase, we will transfer the purchase monies to the seller’s solicitors. We will call you to confirm completion has taken place and to notify you that you can collect the keys to your new property from the estate agents.
When can I collect the keys?
It is difficult to say at exactly what time your purchase will complete. This is because we are dependent on the banking system and the speed with which other parties involved in the chain can transfer their funds. However once we have heard from the seller’s solicitors that your purchase monies have been received and the estate agents have been instructed to release the keys, we will call you. Generally this is around lunchtime.
When do I need to pay your fees?
You will need to pay our fees on completion of your transaction.
Who pays the Stamp Duty Land Tax (SDLT) and when?
The buyer is responsible for the SDLT which is due on completion. We will advise you of the amount of SDLT when we ask you for the balance monies required to complete the purchase. We will deal with the payment of the SDLT to H M Revenue and Customs.
What is a Chancel Liability search?
Chancel repair liability affects medieval churches and properties located within the parish of a medieval Church. The reason that this is now significant is due to the decline in Churchgoers. There are not enough contributions being made to Church funds and as a result the Church has had to look to other means of obtaining money for repairs. In addition there have been some recent court cases where people living on what was previously rectoral land were forced to pay many thousands of pounds for the upkeep of the chancel of their parish Church, which had fallen into disrepair. It is almost impossible to tell whether a property is affected by the liability to contribute to chancel repair unless a detailed search of historical data is carried out in the National Archive. Where a property is burdened by this liability, then an overriding interest exists in favour of the Church. Because of the new Land Registration Act 2002, all overriding interests have to be registered before 2013 but if they have not been registered by this date then the Church cannot enforce the interest. As a result of this, we now undertake chancel liability searches on all purchase transactions. We will discuss the search result with you and the available options.
Please contact our Residential Property team on:
tel: 01825 762281
email: ResProperty@dawson-hart.co.uk
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Glossary
The unconditional agreement to an offer. This creates the contract. Before acceptance, any offer can be withdrawn, but once accepted the contract is binding on both sides. Any conditions have the effect of a counter offer that must be accepted by the other party.
Failure by one party to a contract to uphold their part of the deal. A breach of contract will make the whole contract void and can lead to damages being awarded against the party which is in breach.
Where parties act together in a contract as partners they have joint and several liability. In addition to all the partners being responsible together, each partner is also liable individually for the entire contract - so a creditor could recover a whole debt from any one of them individually, leaving that person to recover their shares from the rest of the partners.
A person or business deemed liable is subject to a legal obligation. A person/business who commits a wrong or breaks a contract or trust is said to be liable or responsible for it.
Where one party to a contract makes a false statement of fact to the other which that other person relies on. Where there has been a misrepresentation then the party who received the false statement can get damages for their loss. The remedy of rescission (putting things back to how they were before the contract began) is sometimes available, but where it is not possible or too difficult the court can award damages instead.
Is often included in long-term contracts and contracts of employment to stop the parties working with competitors during the period of the agreement and for some time thereafter. However, unless carefully written the courts will see them as being a restraint of trade and not enforce them. In property matters it is a provision in a deed limiting the use of a property
Words used on documents exchanged by parties during contract negotiations. They denote that the document is not an offer or acceptance and negotiations are ongoing. Often the expression without prejudice is used when subject to contract is meant.
An agreement to do or to refrain from doing something usually found in a lease or registered against land at the Land Registry
An arrangement to release cash from the value of your home by way of lump sum, income or both.
Two or more persons own land together each of whose interest passes on death automatically to the other not under their wills.
Two or more persons who own land in shares which pass under the terms of their wills or intestacy.