What rights do tenants in common have in relation to each other?
If you own your property jointly as tenants in common there will be a note on the property register to the effect that both parties need to agree to any transaction. If you and the other owner cannot agree you may be able to apply to the Court for an order for sale of the property.
What happens on completion of a property sale?
The date for completion of a property sale or purchase is determined on the day of exchange which can be any day up to and including the day of completion. On completion the buyer’s solicitor sends the money electronically to the seller’s solicitor. Once the money is received by the seller’s solicitors, they telephone the estate agents to release the keys to the buyer. Completion should usually take place by 1.00/2.00 p.m. depending on the terms of the contract but, in reality, completion will take place when money is issued by the seller’s solicitor.
Do I need a solicitor to sell my property?
In short, no, but there are many very powerful reasons to do so and in the vast majority of cases people do utilise the services of a lawyer. There are stringent guidelines set down by the Law Society for accepting sale contracts prepared by non-qualified parties. Solicitors and conveyancers, whether acting for a buyer or a seller, are required to comply with money laundering regulations and owe obligations to verify the identities of all parties involved in a conveyancing transaction. Furthermore, if you have a mortgage on the property it is doubtful whether a buyer’s solicitor would be happy dealing with an unrepresented seller as they are unable to provide undertakings to pay off the mortgage on completion. So, whilst there is no requirement to engage a solicitor for your house sale it would undoubtedly be more beneficial for you and the buyer to do so.
Can the completion date be changed following exchange of contracts?
Yes, if both parties agree. Where both parties do not agree to change the date the party who does not complete on the agreed date may well face financial penalties for a delayed completion.
Can I speak directly to the seller or buyer?
The seller and buyer can speak freely to each other throughout the process of buying and selling a property. However anything agreed between them is not binding on either party unless agreed in writing by the solicitors in the transaction. If you have agreed something between you, you must inform your solicitors so that they can cover the agreement in correspondence.
When buying a tenanted property can you complete the same day as the tenant moves out of the property?
In theory, yes, but it is probably wise not to do so. Tenants tend not take as much care of property as owner/occupiers and if you complete the same day as the tenant vacates you may move into a house that has been left in a poor state. It is better for you to view the property once the tenant has vacated and inspect the state and condition, ask the seller to make any repairs/decorations (they should be holding a deposit to cover the costs) and exchange and complete shortly thereafter.
What are the penalties for delaying a property sale/purchase?
If you are unable to complete the purchase on the agreed completion date following exchange of contracts, you will be charged interest at the contract rate (approximately 9% as at November 2014) on the full purchase price until you do complete. You will be also liable to pay the additional legal fees to the other side’s solicitors for issuing a Notice to Complete (usually between £150.00 – £200.00 plus VAT). Finally should your buyer/seller incur any losses (e.g. furniture storage, fees/additional mortgage payments) because of your delay you could be liable for those costs as well.
Do I have to move on the day of completion of my property sale/purchase?
Generally if you are selling a property you agree to sell with vacant possession. Vacant possession means that all occupiers of the property and their belongings must be removed from the property. If you are the seller and need to remain in the your solicitor about. If you are buying a property there is no requirement for you to move in on the day of completion.
If the property is tenanted should I agree a conditional exchange of contracts?
Ideally you would want to ensure that the tenant has vacated the property prior to exchange of contract. Even if the seller has served notice on the tenant to vacate the property, there is no guarantee that the tenant will move out when they are required to and the seller may have to take Court action to get the tenant to vacate. This is a time consuming process. If the tenant is not happy about having to leave the property, they may not leave the property in a pleasant condition. You can agree a conditional exchange of contracts with completion, say, ten working days after the tenant has vacated. There are upsides and downsides to proceeding in this manner and you ought to discuss this with your solicitor.
What happens if the property is damaged following sale agreed?
Between agreeing to sell the property and exchanging contracts a lot can happen. It is always the buyer’s obligation to check the state and condition of the property by survey/inspection. The buyer is deemed to accept the state and condition of the property at the point contracts are exchanged for the sale and purchase. Having said that, the seller is under a duty to disclose anything to the buyer that they become aware of which may influence the decision of the buyer to proceed with the purchase. So if the property becomes damaged between the buyer agreeing to purchase a property and exchanging contracts the seller ought to inform the buyer. If you are the buyer it is always wise to have a final inspection of the property before instructing your solicitor to exchange contracts.
What happens when contracts are exchanged?
Historically, solicitors would physically go to each other’s offices to exchange contracts, but nowadays it is all done over the telephone. In a typical transaction, the solicitor acting for the first time buyer (a buyer with nowhere to sell) “releases” a contract to the seller and that release gets passed along the chain to the final seller who exchanges contracts. The solicitors then go back down the chain to exchange.
There is no need for a buyer or seller to be physically present as they should have signed the contracts and transferred the deposit money a few days prior to the anticipated exchange date.
Does a Declaration of Trust have to be registered at the Land Registry?
No. The Land Registry will require the buyer’s solicitors to inform them whether the property is to be held as joint tenants, tenants in common in equal shares or tenants in common in unequal shares, but the specifics of those shares do not need to be revealed.
Should I exchange contracts before I have had a survey carried out?
No. The buyer is deemed to accept the physical condition of the property on exchange of contracts. As a buyer you need to ensure that your survey is carried out and the results received prior to exchange of contracts. You can then ask the seller to deal with any issues raised by the survey and even re-negotiate the purchase price if necessary. Once contracts have been exchanged the buyer is not able to raise any issues revealed by the survey and will acquire the property as is.
What concerns should I have about the Green Deal Scheme?
The repayment instalments under the Green Deal Scheme attach the electricity bill for the improved property rather than the original property owner/tenant making the improvements. The seller or landlord is under a duty to disclose that they have received finance under the Green Deal Scheme to the buyer/tenant. A solicitor acting for a buyer would need to ensure that the Green Deal finance is repaid from the net sale proceeds. They may also need to refer the existence of a Green Deal Scheme to the buyer’s lender. Note that from the 1st April 2018 homeowners will not be able to let out their property if the Energy Performance Certificate has less than an “E” rating.
What time of day should my property sale/purchase complete?
The contract will say either 1 or 2 pm. In reality it will be whenever the seller’s solicitors receive the completion funds.
Does the seller and the buyer sign the same copy of the contract for the sale/purchase of a property?
No. The seller signs one copy and the buyer signs another. When contracts are exchanged the seller’s signed contract is passed to the buyer and the buyer’s signed contract is passed to the seller.
Is a Tin Mining Search required in Devon?
No. In some parts of North Devon and Cornwall a Coal Mining Search is required. In most parts of Cornwall a Tin Mining Search is required.
What searches will I need to carry out when buying a property?
The minimum searches required by mortgage lenders are a Local Search, a Water and Drainage Search and an Environmental Search. You can also choose to have a Planning Search. Some areas in the country require specific searches like a Coal Mining or Tin Mining search.
How long after signing a contract will I exchange?
There is no set timescale; it will depend on whether everyone else in the chain is ready to exchange.
My solicitor has given me an incomplete sale contract – should I sign it?
Parts of the contract cannot be completed until exchange takes place. The contract cannot be exchanged until it has been signed by the seller and/or the buyer.
Why won’t my solicitor give me a completion date?
It is the estate agent’s job to negotiate completion dates between all the buyers and sellers in the chain. Solicitors can advise on whether a suggested date is realistically achievable but cannot guarantee a completion date until contracts have been exchanged.
What are the stages of a property sale?
- Seller issues contract and evidence of Title to the buyer.
- Buyer carries out searches/raises enquiries on the Title to the property and the results of their searches.
- Seller responds to enquiries.
- Upon receipt of search results, enquiries and the buyer’s mortgage offer the buyer’s solicitor prepares a report for the buyer and asks them to sign papers.
- Once the seller and the buyer have signed contracts, contracts are exchanged and a completion date set.
What can I do if my new build house is not ready on schedule?
New build property contracts are generally exchanged with completion being 10 working days from receipt of the notice to complete sent by the seller’s solicitors. That notice should not be issued until Building Control have signed off the property as being habitable. The estimated build complete is only an estimate and should just be taken as a guide. Keep in contact with the site office as they should be able to keep you advised on when the property is likely to be ready.
What does exchange mean?
Exchange is the point when a buyer and a seller become contractually bound to a sale/purchase of a property. There can be serious financial implications for either the buyer or the seller for not proceeding to complete once contracts have been exchanged.
When is a chain complete?
A chain typically starts with a first time buyer (someone with nothing to sell) and ends with the seller who does not need to buy. There can be a lot of buyers and sellers between the first time buyer and the end seller (a chain), or just a single buyer and a single seller. The chain is complete when all the people who need to buy in that chain have found somewhere to buy.
When is a Deed of Variation needed?
Deeds of Variation are most commonly required for flat sales/purchases when there is something wrong with the lease e.g. there is not enough rights of access or the term is not long enough or the flat is not adequately described. In order to resolve the problems the landlord and the tenant (and a lender where there is a mortgage) enter into a document to make the necessary amendments to the lease. This document is called a Deed of Variation.
What questions will a solicitor ask prior to completion?
As all the questions relating to the property ought to have been asked and answered prior to exchange of contract, there should not be many questions your solicitor will need to ask you. If you are a seller your solicitor is likely to ask you to confirm the amount payable to the estate agents and mortgagee from the figures they have received, how you would like to receive your net sale proceeds (cheque/bank transfer) and to whom those sale proceeds should be paid and what the new contact details are.
How soon after I have agreed the sale of my property will my mortgage payments stop?
Mortgage payments will not stop until you have completed the sale of your property. Do not just rely on the solicitor paying off your mortgage on completion. You must ensure that you also cancel any standing orders/direct debits for the property on the day of completion.
Why won’t my seller’s solicitors talk to me?
It is always a difficult conversation for any solicitor when the other party calls to speak to them. The solicitor is not trying to be rude or awkward. Professional Rules of Conduct dictate that as soon as anyone is represented by a solicitor, communications can only be made between those parties’ solicitors. This protects both buyers and sellers in the transaction from any untoward information being passed that can impede the progress of the sale/purchase.
Will restrictions on your property delay the sale?
Quite possibly – it depends how quickly the restrictions are picked up by the buyer’s solicitor and who has the benefit of the restriction. Generally professional bodies, e.g. management companies, have systems in place to be able to provide compliance certificates quickly. However, you do need to bear in mind that they do work to their own timescales and cannot/will not be rushed. If you cannot find the person with the benefit of the restriction easily or at all, this will cause some problems but most solicitors have a trick up their sleeves to help in these circumstances.
Can I work on the property I have agreed to buy between exchange and completion?
Yes, but only with the seller’s agreement. However, even though contracts have exchanged there is still a risk, albeit small, that completion does not happen. If you have improved the seller’s property how would you get your money back in that situation? On the other hand if you are the seller, you would need some mechanism in place to reinstate the property at the buyer’s expense should they fail to complete the purchase.