A short(ish) guide to the legal aspects of buying a property in Devon
You buy the purchase property as seen, with all its hidden defects and faults. A valuation report carried out for your lender is not a survey. You must not rely on it to tell you about faults in the purchase property – see our survey advice guide.
Guarantees for works carried out to the purchase property may not be enforceable or transferable. You will often need to check for yourself whether a guarantee can be transferred, or if the company which did the work still exists.
We advise you not to treat the anticipated completion date as fixed until all parties are ready to exchange. No one can guarantee you will move into the purchase property on your “hoped for” completion day. The shorter the time between exchange and completion day, the more likely it is you will suffer inconvenience and wasted costs if your preferred dates are not achieved. This is why it is often not desirable to try to exchange contracts and complete your purchase of the property on the same day – while it can be done if you are lucky it can also inconvenience you considerably if it turns out not to be possible.
Do not confirm the completion day with your removal company, until contracts have been exchanged for the purchase of the property.
You generally will need to have buildings insurance cover for the purchase property from exchange of contracts.
Once contracts have been exchanged there is no turning back. On exchange of contracts the completion day for the purchase of the property is fixed.
Timescales: How long will it take to complete my purchase?
You and the other parties in the transaction including the Estate Agent and solicitors generally don’t know at the outset – because no one can be certain until all the people involved are actually ready to exchange contracts for the property purchase.
If the Seller is not buying another property, and there is no chain, and you don’t need a mortgage offer then it is possible for the transaction to move relatively quickly. Occasionally we deal with property purchases were completion takes place within a few days of the sale being agreed – and if there are special circumstances in your property purchase we will always try to achieve the earliest completion date for you – but generally you won’t be able to exchange contracts for your property purchase until the Seller and any other people in the chain (if there is a chain of transactions) are all ready to proceed.
On the other hand, delays can happen due to many factors, including delays in mortgage offers being issued, or one of the parties in the chain losing a buyer.
Your solicitor can only speak to other solicitors in the chain and to the Estate Agents. We are not allowed to speak directly to other sellers and buyers in the chain who are represented by other solicitors so information about progress or problems in other parts of the chain can sometimes be more easily obtained by you from the Estate Agent, sometimes from other solicitors by us. Remember to keep us informed of what you find out, and we will do the same with a view to progressing your property purchase transaction for you as smoothly as possible.
What is my anticipated completion date?
The anticipated completion date is a target for the completion of your property purchase. Your solicitor will actively work on your behalf to make the anticipated completion date for your property purchase your actual completion day when you will move into the property.
Your solicitor will keep you informed when the circumstances of your purchase, or events beyond our control, mean that the target will not be achieved, and needs to be moved.
The completion day, when you will actually move into the purchase property, is not fixed until contracts have been exchanged. You can make provisional arrangements with your removal company, keeping them informed of the anticipated completion date, but do not confirm your arrangements with them until your solicitor has told you that contracts for your property purchase have been exchanged.
What does the seller have to tell me about the purchase property?
The seller does not have to give you any information about the structural condition of the purchase property, or if the water, drainage, heating, light or electrical power systems work. You buy the purchase property as seen, with all its hidden defects and faults. After the completion day you will have to pay for all repairs, even if the building work needed doing before completion, so do not rely on any assurances given when speaking to the seller about the purchase property.
The seller’s solicitor will supply a Sellers Property Information Form. This is a standard list of questions about the purchase property which asks for information the seller would know from living in the property. Check none of the answers are different from what you expected. Tell your solicitor if you have any concerns about any of the answers.
Do I need a survey?
Yes if you want to reduce the risk of unexpected repair bills after the completion day.
If you buy the purchase property without having a survey carried out, you buy the property as seen with all its hidden defects and faults. The lender’s valuation report is not a survey. It must not be relied upon to tell you about defects and faults to the purchase property.
You should choose the type of survey to be carried out on the purchase property to suit your needs. You can have a home buyers report or a full survey. Your solicitor will give you some guidance about the different types of property survey and may be able to recommend a property surveyor for your property purchase.
What will the seller leave behind in the purchase property?
Your solicitor will send you a list, completed by the seller, of what is included, excluded, or for sale separately.
What Searches will you do?
See our Guide to Searches
What about contaminated land?
A local authority can now, at the cost of homeowners, clean up land which is so contaminated as to cause death, disease or serious injury to health.
A property built on contaminated land may have a reduced re-sale value, or be more difficult to sell, and may affect your health. If after viewing the purchase property, or following comments made by your surveyor, you have concerns that the purchase property may be built on contaminated land, tell us. If you ask us to, we can carry out a contaminated land search against the property. The search looks for previous uses of the property which may have caused the land to become contaminated. See our Guide to Searches.
Is the purchase property at risk from flooding?
The risk to some properties from flooding seems to be increasing.
If you have concerns about flooding, ask your surveyor and check with the Environment Agency.
You can contact the Environment Agency at www.environment-agency.gov.uk
If, following your enquiries, you believe that the property is at risk from flooding, tell us and inform your buildings insurer.
What am I allowed to do as owner of my property?
Your solicitor will tell you about any rights which you as owner can exercise over neighbouring properties. We will also tell you about any rights which neighbouring owners enjoy over your property.
Your solicitor will tell you about any restrictions which can limit what you can and cannot do as owner of the property.
Your solicitor will not have seen the purchase property. Tell us immediately if any plan or information we send you is incorrect.
If I am buying a newly built property, what do I need to consider?
An insurance backed guarantee against poor building work might be available. The guarantee only covers certain types of building defects for a limited period of time. See for example http://www.nhbc.co.uk/
If by exchange of contracts, building work on your new property is not finished, then the completion day will not be a fixed date. Instead the completion day will be on a date notified by the builder, after the work is finished. This means moving arrangements may have to be made at very short notice.
You should enquire direct of the site office for information about: property specifications, landscaping, the progress of building work, negotiations about extras, the route of services to the property and arrangements for connection, and the final pre-completion inspection of the property.
You must inspect the property before the completion day. Tell the builder in writing about any work which is unsatisfactory or not finished off.
If I am buying a leasehold property, what do I need to consider?
If you are buying a leasehold property you will have a landlord. You may have to pay a ground rent and a service charge.
Your solicitor will tell you how many years the lease has to run. The lease tells you of any rights which you can exercise over neighbouring properties, and the rights which your neighbours enjoy over your property. It tells you about any restrictions on what you can and cannot do, and what you are responsible for.
Your solicitor will tell you about those parts of the lease which are important, but you should read the lease for yourself before exchange of contracts. Tell us if there is anything in the lease which you do not understand.
If you are buying a flat, you may have to make an advance payment to cover ground rent and service charge on the completion day.
When do I need to arrange buildings insurance cover?
You must make provisional arrangements for buildings insurance well before exchange of contracts. Your financial adviser can help you with this.
If you are buying a leasehold property your solicitor will tell you if the landlord arranges the buildings insurance.
What information does my solicitor need from me about my buildings insurance?
Name and address of company
Policy number /quotation reference
Amount insured
Number of flats covered by the policy (if a flat)
Where are my keys?
On the completion day the seller may give you the keys directly, or they may be left at the estate agents. Ask your seller what they intend to do with the keys. Keys will not be released to you until the seller’s lawyer has received all the purchase money from ourselves.
When will I receive my title deeds?
After the completion day your solicitor will register you as owner of the property at the Land Registry. This will take several weeks to complete.
The Land Registry no longer issue title deeds as such, but only a copy of the Register.
If you took out a mortgage, this copy will be sent to your lender. If you bought the property without a mortgage, we will send this copy to you. Your solicitor may also send you the following papers: NHBC documents, planning consent, building regulation approval, preregistration documents. Keep them in a safe place. They will be needed when you sell your property in the future.
What is the contract?
The contract, also called the agreement, describes what is being sold to you, and at what price. It also contains many standard terms to regulate the position should any dispute arise between you and the seller. Tell your solicitor if any of the details are incorrect.
What is the legal effect of signing the contract?
You will be asked to sign the contract in readiness for exchange of contracts. Signing the contract does not mean that exchange of contracts will happen, or that you have bought the property. Please leave the contract undated.
What is the transfer?
The transfer confirms the details in the contract. It describes what is being sold to you, and at what price.
What is the legal effect of signing the transfer?
You will be asked to sign the transfer in readiness for the completion day. Signing the transfer before exchange of contracts does not mean that exchange of contracts will happen, or that you have bought the property.
What is the mortgage deed?
The mortgage deed is your written agreement with your lender.
You will be asked to sign the mortgage deed in readiness for the completion day. Signing the mortgage deed before the completion day does not mean that you have taken out the mortgage.
How much money do you need from me to complete my purchase?
You can contact your solicitor at any time for an estimated figure of how much money your solicitor will need from you to complete the purchase of your property. This estimated figure will become more accurate as your purchase gets nearer to the completion day.
Your solicitor will try to let you know the exact amount we need from you at least one week before the completion day. But very often, due to the shortness of the time between exchange and completion, your solicitor can only tell you the precise amount of money
needed, at very short notice.
The money which you need to send to your solicitor must be cleared, and so be able to be used, in time for the completion day.
Lenders need up to seven days notice of the completion day. Any less notice runs the risk the money may not be available on the completion day.
Is a deposit really necessary?
When contracts are exchanged, a 10% deposit is due to the seller as part payment on the property, although the seller will frequently accept less. If you fail to complete the purchase the seller can keep any deposit paid and you then have to pay any balance, so that the seller receives the full 10% as compensation.
If you are selling and buying properties, the deposit your solicitor will receive on your sale may be sufficient to cover the deposit on your purchase.
Why is a written mortgage offer so important?
Before exchange of contracts your solicitor will need written confirmation that your lender will provide the money you require, and upon what terms.
What do I need to check in my mortgage offer?
You need to understand the terms of your mortgage offer. Tell your solicitor if you do not.
Check the amount you are borrowing, and will have to repay, are correct. Remember, the amount your solicitor will receive from your lender will be less any deductions specified in your mortgage offer.
When you take out a mortgage you agree with the lender to make regular monthly mortgage payments, and to keep the property both in good condition and insured. If you fail to keep your agreement with the lender they can sell your property to pay off the mortgage loan. Make sure you understand the penalties that could apply if you decide to pay off your mortgage early.
If the lender sells your property for less than the mortgage loan, you still have to pay the unpaid debt.
Your solicitor will tell you about any special conditions that will need to be satisfied before exchange of contracts.
Can I transfer my existing mortgage to my new property?
No. You will need to make a new mortgage application, even if you are staying with the same lender.
Can I transfer existing loans to my new property?
All loans on a property (such as a business overdraft facility, Legal Aid charge, or personal loan) must be paid off out of the sale proceeds, unless the lender concerned agrees to transfer the loan to your new property.
This may take some time for the lender to organise, and if you want to do this you should contact the lender for consent as quickly as possible.
If the lender gives their approval, they will send written instructions to your solicitor.
How will I receive any balance money?
If there is any money left over after legal costs, and all other purchase expenses have been paid, your solicitor will pay it to all named buyers jointly, to either a named joint account, or by separate payments.
The payments will be by cheque, unless you prefer electronic transfer directly to your bank, for which we will make a charge.
Why is my first mortgage payment higher than expected?
This happens when the time between the completion day and your first payment is more than one month. If you have concerns about the amount of your payment, check with your lender.
What does exchange of contracts mean?
From the moment of exchange of contracts, you have bought the property.
Exchange of contracts is carried out on the telephone. The contract to buy and sell the property is binding from the moment telephone exchange happens.
On exchange your deposit will be sent to the seller’s solicitor .
There is no turning back once contracts have been exchanged. Neither you or the seller can change your mind about buying or selling the property without having to pay compensation.
On exchange of contracts the completion day is fixed.
We will contact you once contracts have been exchanged. This is the time to confirm the completion day with your removal company.
We will not exchange contracts unless you agree that we can do this.
When can I give notice to quit to my landlord?
If you are in rented accommodation, you will have to give notice to your landlord. Do not give notice to end your tenancy before contracts have been exchanged, as this could make you homeless.
What is the completion day?
On this day we complete your purchase by sending the money to the seller’s lawyers. You can move into the property, and the seller must move out.
Ask the seller what time they intend to move out of the property.
Why can’t the completion day be at a weekend?
The completion day must be between Monday and Friday. The banks will not transfer money at weekends.
Where possible, pick a completion day to allow at least one week between exchange of contracts and completion. This will give you more time to finalise moving arrangements. It will also help us carry out all the tasks that can only be done after exchange of contracts, but must be finished before the completion day.
What if the seller fails to move out?
Tell us immediately you know that the seller does not intend to move out of the property on the completion day.
We will question the seller’s solicitor to find out if the completion day is simply delayed, or if the seller is refusing ever to complete the sale of the property to you.
You can claim compensation from the seller if completion is delayed or does not happen at all. We will advise you about which expenses you are entitled to claim.
What will happen if my completion is delayed?
If completion is delayed because your money was not cleared, you will be responsible for any wasted costs or compensation claimed by the seller and their solicitors.
If you fail to buy your property on the completion day, you will have to pay substantial compensation. The seller can keep the deposit, and recover additional compensation by taking you to court.