Wednesday, 31 January 2007
What are title deeds?
Title deeds refer to deeds and other legal documents which prove ownership of a property and usually include all deeds transferring ownership during the last 30 years. If a property is registered with Land Registry a Land Certificate replaces the title deeds. If there is a mortgage a Land Certificate is replaced by a Charge Certificate.
When is the sale complete?
Until contracts are exchanged, both buyer and seller can back out without any contractual liability.
The contract is a legally binding document. The exchange of contracts involves both parties signing the contract and returning it to the relevant solicitor.
Exchanging contracts is unlikely to take place until all of the following have been carried out.
Completion of the survey or valuation report by both buyer and lender.
Reciept of a formal mortgage offer, in writing, from the lender.
Completion of Conveyancing work.
Agreement on completion date.
Settlement of outstanding issues and appropriate written agreements.
Completion occcurs when funds are transferred and the buyer gets access to the property. Finally, stamp duty is paid and the purchaser is registered with the Land Registry as the legal owner of the property. Title deeds are then sent to the mortgage lender and the process is complete.
The contract is a legally binding document. The exchange of contracts involves both parties signing the contract and returning it to the relevant solicitor.
Exchanging contracts is unlikely to take place until all of the following have been carried out.
Completion of the survey or valuation report by both buyer and lender.
Reciept of a formal mortgage offer, in writing, from the lender.
Completion of Conveyancing work.
Agreement on completion date.
Settlement of outstanding issues and appropriate written agreements.
Completion occcurs when funds are transferred and the buyer gets access to the property. Finally, stamp duty is paid and the purchaser is registered with the Land Registry as the legal owner of the property. Title deeds are then sent to the mortgage lender and the process is complete.
What is a Land Registry Certificate?
A Land Registry Certificate gives details of the property including plans and a copy of the lease if it is leasehold. Land Registry is a government department responsible for maintaining and updating the register of all homes in Wales and England. A fee is payable to register ownership of a property. Land Registry has it's head office in London with district registries throughout the country.
What is the difference between leasehold, freehold and commonhold?
If a property is freehold it means that the land on which the propery is built is included in the price of the sale and therefore no ground rent or service charge is payable.
If a property is leasehold it means that the the land on which the property is built is not part of the sale and therefore the buyer will be required to pay ground rent to the owner of the land- the freeholder. The length of a lease can vary greatly so it is vital to check with the lender that the lease length is acceptable. Holding a lease will give the buyer the right of possession but not ownership of the property. As well as having to pay ground rent, very often a service charge is also payable and covers repairs, maintenance, keeping of common grounds and this is common in flats.
If a property is commonhold, this means that the buyer can purchase the freehold of a flat, jointly with other residents of the flats and is known as a commonhold association. A service charge and ground rent are not payable although a commonhold association's expenses on insurance, maintenance and admin will be payable for common parts of the building.
If a property is leasehold it means that the the land on which the property is built is not part of the sale and therefore the buyer will be required to pay ground rent to the owner of the land- the freeholder. The length of a lease can vary greatly so it is vital to check with the lender that the lease length is acceptable. Holding a lease will give the buyer the right of possession but not ownership of the property. As well as having to pay ground rent, very often a service charge is also payable and covers repairs, maintenance, keeping of common grounds and this is common in flats.
If a property is commonhold, this means that the buyer can purchase the freehold of a flat, jointly with other residents of the flats and is known as a commonhold association. A service charge and ground rent are not payable although a commonhold association's expenses on insurance, maintenance and admin will be payable for common parts of the building.
What are Home Information Packs?
Home Information Packs (HIP) are to introduced in June 2007 and are designed to improve the process of buying and selling a home. These will be compulsary for all sellers in England and Wales and is expected to speed up the process between an offer being accepted and contracts being exchanged.
Documents required are:
A list of pack contents, or index;
Evidence of title;
Sale statement outlining terms of sale;
Energy performance certificate;
Standard searches, e.g Local authority;
Leasehold information (if applicable);
Commonhold information (if applicable);
New Homes Warranty (if applicable);
Reports on a home that is incomplete (if applicable);
A Home Condition Report.
Authorised documents include:
Warranties and Guarentees;
Other searches.
The cost of producing a Home Information Pack (up to £1,000), is being passed on to the seller, therefore the expense will simply be incorporated into the price of the property.
Documents required are:
A list of pack contents, or index;
Evidence of title;
Sale statement outlining terms of sale;
Energy performance certificate;
Standard searches, e.g Local authority;
Leasehold information (if applicable);
Commonhold information (if applicable);
New Homes Warranty (if applicable);
Reports on a home that is incomplete (if applicable);
A Home Condition Report.
Authorised documents include:
Warranties and Guarentees;
Other searches.
The cost of producing a Home Information Pack (up to £1,000), is being passed on to the seller, therefore the expense will simply be incorporated into the price of the property.
What is a Local Authority Search?
A Local Authority Search is an application to the Local Authority for a certificate containing certain information about a property. This will be handled by the person appointed to carry out the conveyancing. The search checks with the Local Authority as to whether any new developments are planned in the vicinity of the property, e.g a new motorway, or anything else immediately adjacent to the property. The search will also check the water drainage systems and other social infrastructure. Also highlighted are any planning restrictions which may effect plans to extend or renovate the property. It is also useful to check nearby buildings or empty land to establish whether any planning permission has been granted for new developments. Local Authority searches can take anything from 2 weeks up to ten weeks to complete.
Can I do the Conveyancing work myself?
Most people hire a solicitor or licensed conveyancer, but it is possible to do the conveyancing work yourself. This is commonly known as DIY conveyancing. This can certainly be a cheaper option as there will be no fees incurred, and no VAT on any of the disbursements. However DIY Conveyancing can be risky if you lack the necessary expertise and are unfamiliar with the legal jargon. The conveyancing process is a vital part of property buying and is both complex and time consuming. Ensuring that it is done properly will prevent things from going disastrously wrong, e.g finding yourself involved in costly legal disputes or even finding that the seller did not have the right to sell!
Many mortgage lenders insist on hiring a professional and some sellers will reject an offer if the buyer palns to do the conveyancing themself.
DIY Conveyancing is particularly inadvisable if the property is not a house, if it is not a freehold or if it is not registered. If the property is being sold by a separating couple, special knowledge is required and DIY conveyancing should not be considered.
Many mortgage lenders insist on hiring a professional and some sellers will reject an offer if the buyer palns to do the conveyancing themself.
DIY Conveyancing is particularly inadvisable if the property is not a house, if it is not a freehold or if it is not registered. If the property is being sold by a separating couple, special knowledge is required and DIY conveyancing should not be considered.
Tuesday, 30 January 2007
What is a Structural Survey Report?
A Structural Survey Report is a thoroughly detailed report on the condition of the property to be purchased. Carried out by a surveyor, it should list both minor and major defects of the propery and highlight any maintenance work which may need to be done in the future. This type of report it especially important if the property is old. The surveyor is legally bound to tell you every detail of what they find. Knowing about any problems with the property can inform the decision to buy and to avoid unecessary or unforeseen costs once the purchase is made. If the survey reveals a major or costly problem, the buyer is free to reconsider their offer, or even to renegotiate the price.
What is a Home Buyers Report?
A Homebuyers Report is a type of survey giving basic details of the general state of repair of the property. Usually including a valuation report, it provides only information on areas of the property which are immediately accessible or visible. This report is used by the lender and contains information which the buyer can use in deciding whether or not to purchase. This report is more detailed than a mortgage valuation report but is not as in depth as a Structural Survey Report.
What is a Property Information Form?
A Property Information Form is a questionnaire to be completed by the seller. This provides the buyer to ask any specific questions about the property and the seller is legally obliged to answer all such queries honestly. Failure to do so may result in the buyer taking legal action.Issues covered include boundaries, any disputes with neighbours, fixtures and fittings and alterations.
What can I expect to pay for conveyancing?
Although conveyancing can be done individually, it is a complicated process and best undertaken by either a solicitor or licensed conveyancer. Licensed conveyancers and solicitors structure their fees differently, some will charge a percentage of the the property value, while others will charge a fixed fee. In addition to fees are disbursements, which are set costs payable to other parties. These costs are standard and include stamp duty, VAT, local authority and other relevent searches and postage- simply any other costs incurred by the solicitor or conveyancer carrying out the work.
What is the contract?
The contract is a legally binding document that sets out the terms of the sale process and is drawn up by the seller’s solicitor using information from the property deeds.
The contract will contain details of the property and items that are to be included in the sale, the buyers and sellers, the price, and the date on which the transaction will take place. The contract is in two parts: Particulars of Sale and Conditions of Sale. The Particulars describe the property and details of the lease or freehold. The Conditions contain information about the proposed completion date and any deposit required when contracts are exchanged. Both parties have to sign the contract.
The contract will contain details of the property and items that are to be included in the sale, the buyers and sellers, the price, and the date on which the transaction will take place. The contract is in two parts: Particulars of Sale and Conditions of Sale. The Particulars describe the property and details of the lease or freehold. The Conditions contain information about the proposed completion date and any deposit required when contracts are exchanged. Both parties have to sign the contract.
What is the process of conveyancing for the seller?
There are 3 stages involved in buying or selling a property: agreeing the sale; exchanging of contracts; and completion. At each stage both buyer's and seller's solicitors have specific tasks to carry out.
Stage 1: Agree the sale.
The seller's solicitor will: apply for both the seller's title deeds and land registery; ask the seller to complete a property information and fixture, fittings and contents form; prepares and sends a contract to the buyer's solicitor; and negotiate a completion date.
Stage 2: Exchange of Contracts.
After this stage the contract becomes legally binding, i.e the buyer must buy and the seller must sell.
The seller's solicitor will: confirm the completion date; obtain a settlement figure from the lender; recieve the buyer's deposit; and approves the transfer deeds, obtaining the seller's signature.
Stage 3: Completion.
The seller's solicitor will: recieve the balance of the purchase price; pay off the balance of the mortgage; forward the deeds to the buyer's solicitor; and either send the balence to the seller or use it to purchase another property
Stage 1: Agree the sale.
The seller's solicitor will: apply for both the seller's title deeds and land registery; ask the seller to complete a property information and fixture, fittings and contents form; prepares and sends a contract to the buyer's solicitor; and negotiate a completion date.
Stage 2: Exchange of Contracts.
After this stage the contract becomes legally binding, i.e the buyer must buy and the seller must sell.
The seller's solicitor will: confirm the completion date; obtain a settlement figure from the lender; recieve the buyer's deposit; and approves the transfer deeds, obtaining the seller's signature.
Stage 3: Completion.
The seller's solicitor will: recieve the balance of the purchase price; pay off the balance of the mortgage; forward the deeds to the buyer's solicitor; and either send the balence to the seller or use it to purchase another property
What is the process of Conveyancing for the buyer?
There are 3 stages involved in buying or selling a property: agreeing the sale; exchanging of contracts; and completion. At each stage both buyer's and seller's solicitors have specific tasks to carry out.
Stage 1: Agree the Sale.
The buyers solicitor will request payment for expenses; recieve the contract from the seller's solicitor and make any necessary additional enquiries; carry out local authority searches; ask the buyer to agree the property information form; recieve the mortgage offer from the lender; and reports to the buyer with the contract asking for the deposit.
Stage 2: Exchange of Contracts.
After this stage, the contract becomes legally binding, i.e the buyer must buy and the seller must sell.
The buyer's solicitor will:send the contract and deposit to the seller's solicitor; prepare the transfer and mortgage deed, obtaining the buyer's signature;arranges and prepares any final searches; and request their fee.
Stage 3: Completion.
The buyer's solicitor will:send the balance to the seller's solicitor; recieve the deeds; register the transfer with land registery; and send the title deeds to the lender.
Stage 1: Agree the Sale.
The buyers solicitor will request payment for expenses; recieve the contract from the seller's solicitor and make any necessary additional enquiries; carry out local authority searches; ask the buyer to agree the property information form; recieve the mortgage offer from the lender; and reports to the buyer with the contract asking for the deposit.
Stage 2: Exchange of Contracts.
After this stage, the contract becomes legally binding, i.e the buyer must buy and the seller must sell.
The buyer's solicitor will:send the contract and deposit to the seller's solicitor; prepare the transfer and mortgage deed, obtaining the buyer's signature;arranges and prepares any final searches; and request their fee.
Stage 3: Completion.
The buyer's solicitor will:send the balance to the seller's solicitor; recieve the deeds; register the transfer with land registery; and send the title deeds to the lender.
Monday, 29 January 2007
What is Conveyancing?
What is Conveyancing?
Conveyancing is a term given to the legal process of transferring ownership of a property from one person to another. This process is usually carried out by a solicitor or a licensed conveyancer. The buyer needs to ensure that they get good 'title' to the land; i.e., that the person selling the house actually has the right to sell it. The system of Conveyancing is designed to ensure that the buyer gets the land together with all the rights that go with it, and knows about any restrictions in advance.
Conveyancing is a term given to the legal process of transferring ownership of a property from one person to another. This process is usually carried out by a solicitor or a licensed conveyancer. The buyer needs to ensure that they get good 'title' to the land; i.e., that the person selling the house actually has the right to sell it. The system of Conveyancing is designed to ensure that the buyer gets the land together with all the rights that go with it, and knows about any restrictions in advance.
Subscribe to:
Posts (Atom)