| Buying or selling your home are amongst the | | | | your meter read on the completion date. If you |
| most important decisions you will ever make and | | | | have a telephone and are moving locally you may |
| require a great deal of thought at every step | | | | wish to contact British Telecom or Telewest |
| between deciding on a move to the hiring of a | | | | Communications to arrange for the transfer of |
| removal van. They also require vital legal | | | | the number to the new address. It is not |
| formalities and the purpose of these notes is to | | | | advisable to make any of these arrangements |
| assist you to understand those formalities. | | | | until after Contracts are exchanged, unless the |
| The Buyer's Offer | | | | completion date comes very shortly after the |
| If you are buying a property it is wise to make | | | | exchange date. |
| the offer subject to Survey and Contract. This | | | | Mortgage |
| allows you to have a change of mind and not | | | | Your sellers are not under a duty to disclose any |
| continue with the purchase if, for example, an | | | | physical defects in the property to you and you |
| adverse Survey is obtained or a Mortgage cannot | | | | should therefore arrange to carry out your own |
| be secured, When you make an offer to the | | | | survey of the property. We would recommend |
| Seller or the Seller's Estate Agents ALWAYS | | | | that you do not simply rely on your mortgage |
| make the offer subject to Survey and Contract. | | | | company's valuation because although this may be |
| NEVER sign a document at this stage without first | | | | expressed to be a survey it is, in fact, merely a |
| obtaining your Solicitor's advice. | | | | valuation for the benefit of your mortgage |
| The Contract | | | | company only. If any works are required to the |
| The Seller's Solicitor draws up a document known | | | | property as a result of an adverse survey, we |
| as the Contract. This document gives full details | | | | would advise that you speak to your lender and |
| of the Agreement reached between the Seller | | | | obtain estimates as soon as possible via the |
| and the Buyer. It sets out the purchase price, the | | | | estate agents. It will be your responsibility to |
| names and addresses of the Seller and Buyer and | | | | satisfy yourself that the works have been carried |
| describes the property. It also states whether the | | | | out and acceptable to your lender prior to |
| property is Freehold or Leasehold. The Contract | | | | completion. If you confirm to us that the work |
| will also include any Special Conditions which have | | | | has been done we will be happy to arrange a |
| been agreed between the Seller and Buyer, for | | | | re-inspection, if necessary, but we regret that we |
| example, whether the Seller will carry out any | | | | are unable to deal with contractors directly. |
| repairs to the property before the completion | | | | In most cases, this firm will also be instructed to |
| date. | | | | act for your Lender and we must comply with |
| National Conveyancing Protocol (or Transaction) | | | | their instructions which will accompany your |
| This is a Scheme recently introduced by the Law | | | | mortgage offer. We will report to the Lender on |
| Society and which has been adopted by Keith | | | | the property and on any other material matter |
| Park Solicitors and a large percentage of Solicitors | | | | affecting the loan. (If there is any conflict, we |
| Firms nationally. The steps involved in the sale and | | | | would not be able to act for both you and the |
| purchase are carried out in accordance with this | | | | Lender). |
| Protocol, the aim of which is to ensure that the | | | | Upon sale if you have a fixed rate mortgage or |
| Seller's Solicitors provides the Buyer's Solicitors | | | | have received a discounted mortgage we would |
| with as much information as is possible about the | | | | advise that you contact your lender to see if any |
| property at the outset of the transaction. This | | | | penalties will be incurred should you redeem your |
| helps to narrow the time gap between the | | | | mortgage before a certain date. It is your |
| agreement on the sale or purchase and the actual | | | | responsibility to ensure that the early penalty |
| exchange of Contracts. Unless you write to the | | | | portability conditions are adhered to. |
| contrary we shall assume that you have no | | | | Surveys |
| objection to us using this "Transaction". | | | | When a Mortgage is being obtained the Bank, |
| Leasehold Property | | | | Suilding Society or other such Institution will have |
| This arises when a property is let by the owner | | | | carried out at your expense a Mortgage Valuation. |
| of the Freehold to the owner of the property for | | | | It is also wise for a more comprehensive Survey |
| a period of years usually 999 years. The Lease | | | | to be arranged, either a House Buyer's Report or |
| will be a long and fairly complex document. The | | | | a full Structural Survey. |
| important Clauses contained in Leases usually | | | | It is important to note the Lender's Valuation |
| include those relating to the term of years, the | | | | Report is for the Lender and is only required by |
| Ground Rent and the Lessee's Covenants which | | | | the Lender for confirmation that the property is |
| are restrictions on use and obligations applying to | | | | adequate security for the Loan. Thus a not very |
| the property. | | | | detailed report would be carried out if the Buyer |
| Joint Ownership | | | | was paying £100,000.oo but the Loan was only |
| When two or more people buy property they can | | | | for £15,000.00. In addition, as the Lender's |
| buy as "Joint Tenants" or "Tenants in Common". | | | | Valuer does not have a Contract with the Buyer, |
| Most people who buy property do so as "Joint | | | | following recent cases, it would be difficult for the |
| Tenants", This means that if one co-owner dies | | | | Buyer to successfully sue the Lender's Valuer |
| his or her share in the property automatically | | | | should the Lender's Valuer have been negligent in |
| passes to the survivor. The alternative is a | | | | preparing the report. |
| Tenancy in Common which is more appropriate | | | | For an additional fee it may be possible to arrange |
| for co-owners who have no personal relationship. | | | | for the Lender's Valuer to carry out a more |
| If a Tenant in Common dies then that person's | | | | detailed Survey and Report at the same time as |
| share does not pass automatically to the survivor | | | | the Mortgage Valuation. A "House Buyer's Report |
| but forms part of the Estate of the deceased | | | | and Valuation" is a concise and economical report |
| person and passes under their Will. | | | | on the condition of the property and includes a |
| A Tenancy in Common may also be required if | | | | Valuation. The Surveyor will inspect the main |
| the Buyers are putting in unequal deposits and the | | | | structure including roof space, if accessible, and |
| person putting in the larger amount wishes to | | | | drainage. A "Full Structural Survey" is particularly |
| ensure that he or she retains a proportionate part | | | | useful for old or large properties. |
| of his or her share in the property when it is sold. | | | | The Surveyor will report on everything that is |
| If an unmarried couple are purchasing a property | | | | visible, the outside of the roof will be examined |
| they may wish to instruct us to prepare a | | | | and a sample of floorboard will be taken up where |
| Cohabitation Agreement/Trust Deed, which can | | | | practicable. The Survey will cover the structure of |
| include details of their intentions should they split | | | | the building, outbuildings, nearby trees that may |
| up and the property is sold. | | | | be the cause of damage and the services and |
| Property Information | | | | drainage. In either case the Surveys may suggest |
| When instructions are received from you to act | | | | that there should be further tests, for example if |
| on your sale, a Questionnaire will be forwarded | | | | wet or dry rot is suspected or a defective damp |
| for you to complete. This contains questions | | | | course. We can put you in touch with an |
| relating to your property for example, enquiries | | | | independent Surveyor or ask your Lender's |
| such as to the ownership of the boundary fences, | | | | Surveyor to carry out a further Survey on your |
| disputes with your neighbours, availability of | | | | behalf. We can also put you in touch with |
| Guarantees etc. This information is then supplied | | | | Specialist Firms providing other necessary reports. |
| to the Buyer's Solicitors when the draft Contract | | | | You must always rely on your own and more |
| is sent out. It is vital that you read the front page | | | | importantly your Expert's Report and inspection |
| of the Questionnaire before completing your | | | | of any property which you are considering |
| replies and if you have any Guarantees, Reports, | | | | purchasing. If there are any problems they must |
| Planning Permission etc in your possession you | | | | be discovered before exchange of Contracts so |
| should forward such to our office when returning | | | | that you are in a good position to re-negotiate the |
| the Questionnaire. | | | | terms of the transaction or, if necessary, to |
| Fixtures, Fittings & Contents | | | | withdraw. Nothing can be done about any defect |
| If you are selling, we will send you a Schedule for | | | | which you discover after the exchange of |
| your completion and return with the Property | | | | contracts as the seller is under no legal obligation |
| Information Questionnaire. In the "included" section | | | | to compensate you. For these reasons we |
| you should list all items which you have agreed | | | | strongly recommend that you consider having at |
| with the Buyers are included in the agreed sale | | | | least a House Buyers Valuation. |
| price, Anything which you are selling as an extra | | | | Buildings Insurance |
| sum should be listed separately. Be particularly | | | | Once Contracts are exchanged the property |
| careful also in listing those items which you wish | | | | becomes the Buyer's Insurance risk. If a |
| to take with you to your new home. The | | | | Mortgage is involved the Lender will make it a |
| Schedule will form part of the Contract and you | | | | condition of the Loan that the property is |
| will not be able to change your mind about what | | | | insured and will usually offer to arrange the cover. |
| is included or excluded after Exchange of | | | | The buyer will of course be responsible for the |
| Contracts without the Buyer's consent or possibly | | | | payment of the premium which may be |
| being required to compensate the Buyer. | | | | unnecessarily expensive if it is added to Mortgage |
| Local Search | | | | and attracts the payment of interest. In the case |
| This is a standard form of enquiries made with | | | | of a cash transaction it is imperative that the |
| the Local Authority in which the property is | | | | insurance be arranged to take effect immediately |
| situated, The Search will disclose, amongst other | | | | after Contracts are exchanged. We will ask that |
| things, whether there are any relevant Planning | | | | you provide us with details of your policy before |
| Permissions or Improvement Grants and whether | | | | exchange of contracts can take place. |
| any road fronting the property is maintained at | | | | Contents Insurance |
| the cost of the Highway Authority or is privately | | | | If you are buying a property with the assistance |
| maintained It is important that you realise the | | | | of a Mortgage, the insurance, which will be |
| limitations on the results of the search. The | | | | arranged by the Lender, usually covers only the |
| search will primarily only be against the property | | | | bricks and mortar of the property. It is essential |
| you are acquiring, Whilst some matters. e.g. | | | | that you, manage to cover your contents, Basic |
| possible road developments within 200 metres of | | | | Contents Insurance covers the contents of your |
| the property are covered, no planning information | | | | home if they are stolen or damaged by natural |
| that does not specifically relate to the property | | | | disaster over which you have no control under a |
| you are acquiring will be revealed. If you are | | | | basic policy you can claim only the second-hand |
| concerned about possible development in the | | | | value of the goods, Some Policies provide new |
| surrounding area, you should contact the local | | | | for old with accidental damage and all risks cover. |
| Planning Authority direct. If you have any further | | | | These are more expensive but will cover the cost |
| queries about what is and is not covered by the | | | | of replacing the lost or damaged items at today's |
| search, please let us know. | | | | prices, you must however, ensure that the value |
| Since 1 st April 2000, Local Authorities are | | | | of your Contents Insurance covers the |
| required to prepare a definite list of sites within | | | | replacement cost. If you are under insured then in |
| their area where past uses have led to | | | | the event of a claim the Insurance Company will |
| contamination, The Local Authority search | | | | apply what is known as "averaging" and will pay |
| specifically asks the Local Authority whether the | | | | only a proportion of the claim. For example, if the |
| site does have some history of use which could | | | | Insurance Company consider that you have only |
| lead to contamination. As the Local Authority's | | | | valued your content at half of the value or |
| obligation to compile a register has only just | | | | replacement costs, then they will pay only half the |
| arisen, it is unlikely that any entries on the Local | | | | claim meaning effectively you will receive only a |
| Authority search would appear against the | | | | quarter of the value of replacement cost. Again, |
| property you are purchasing. This does not mean | | | | you should contact your Financial Advisor for full |
| that the site is not contaminated, simply that the | | | | advice on all aspects of Contents Insurance. |
| Local Authority has not yet investigated the | | | | A Buyer should also be careful when purchasing a |
| position, If, when you come to sell the property, | | | | Leasehold flat. If the Landlord is responsible for |
| it does appear on the Local Authority's register | | | | insuring the building it may not be the Landlord's |
| then you may find it difficult, if not impossible, to | | | | responsibility for Insuring the interior surfaces of |
| sell your property. Fortunately, it is possible to | | | | the walls, floor and ceiling to the flat. In this case |
| carry out an environmental search which would | | | | the Buyer should check whether these can be |
| highlight the history of the site of your property | | | | included on his Contents Policy. |
| and details whether or not any potential sources | | | | Final Formalities |
| of contamination exist within a 250 metre radius. | | | | On exchange of Contracts a completion date is |
| At the moment it is not compulsory to carry out | | | | fixed, this is usually in between two and four |
| such a search but it is likely that the lending | | | | weeks after Contracts are exchanged but is a |
| institutions will soon insist that environmental | | | | date to be agreed between all parties involved. |
| searches are carried out before they will accept a | | | | The buyer and the Seller will be asked to sign the |
| property as a suitable security. We would advise | | | | final documents prior to the completion date so |
| you strongly to carry out the environmental | | | | that they are available for handing over on the |
| search at this stage and ask you to contact us | | | | completion date, the Purchase Deed is normally |
| should you wish a search to be carried out. | | | | called a "Transfer". If the purchase transaction is |
| Mining Search | | | | being financed by a Building Society or similar |
| This is an enquiry with the Coal Authority to | | | | organisation we will normally be instructed to |
| ascertain the position with regard to mining | | | | prepare the Mortgage Deed and ensure that they |
| (whether past, present or future) under the | | | | are signed and that the Loan monies are available |
| property the subject of the transaction and | | | | on completion. The Signed Mortgage Deeds must |
| whether any recent claims for subsidence | | | | be in our possession before the Loan monies can |
| damage have been submitted. It will also reveal | | | | be used for the purchase of the new house. |
| whether there are any disused mine shafts near | | | | Completion |
| to the property. If a Building Society or Bank is | | | | The completion date is the day on which the |
| providing a Mortgage for the Buyer we will almost | | | | Buyer's Solicitors hands over to the Seller's |
| Invariably be required by the Building Society or | | | | Solicitor the purchase monies less the deposit paid |
| Bank to obtain the results of a Mining Search if | | | | on the exchange of Contracts and in return |
| the property is thought to be within a Coal Mining | | | | receives the Title Deeds. The Buyer is then able |
| area. If anything of an adverse nature is revealed, | | | | to move into the new property. A Seller should |
| for example a disused mine shaft adjacent to the | | | | not part with the keys to the property until |
| property, we will send a copy of the result of the | | | | completion has taken place and his solicitor has |
| Search to the Building Society or Bank who would | | | | received the balance of the purchase money. For |
| no doubt refer the matter to its Valuer or | | | | convenience, it is often best for the Seller to |
| Surveyor. Depending on the comments of the | | | | leave the keys with his/her Estate Agent (if any) |
| Valuer or Surveyor, the Mortgage Application | | | | and for the Estate Agent to be instructed not to |
| could be turned down or if the Mortgage Offer | | | | release the keys until the Seller's Solicitor advises |
| has already been Issued the Offer could be | | | | him that completion has taken place. |
| withdrawn. The presence of coal workings within | | | | Post Completion |
| close proximity of the property may also affect | | | | There are further formalities requiring attention |
| future saleability. | | | | after completion. |
| Water Search | | | | In the case of a purchase it is necessary to |
| The Law Society recommends that a drainage | | | | produce the Purchase Deed to the Inland |
| and water search (or CON29DW) is undertaken | | | | Revenue to pay any Stamp Duty which is due. |
| as part of every property purchase. The search | | | | Stamp Duty is paid by the Buyer and if you are a |
| helps to avoid costly mistakes relating to drainage | | | | Buyer it will be shown in the Completion |
| and water assets and owner liability issues under | | | | Statement which we prepare and send to you |
| and around the property. The search will be of | | | | following exchange of Contracts. After the Deeds |
| interest to clients who are purchasing a property | | | | have been stamped an application to the Land |
| with the intention of developing or extending it in | | | | Registry is made to register the change of |
| the future. Depending upon the location of water | | | | ownership. This may take several weeks for the |
| pipelines or sewers, such developments can be | | | | Land Registry to sort out. Registration attracts |
| refused If the property is situated too close to | | | | the payment of a fee which again is calculated In |
| these assets. | | | | accordance with the purchase price This fee is |
| Environmental Search - Optional | | | | also paid by the Buyer and again, if you are the |
| An Environmental Search provides essential site | | | | Buyer, it will be shown in the Completion |
| history and other environmental information for | | | | Statement. |
| properties in mainland Britain. The Report will help | | | | Eventually the Deeds are returned to us and in |
| any homebuyer to make an informed decision | | | | the event of there being a mortgage, are passed |
| about purchasing a particular property and | | | | onto the lender to be retained until such time as |
| whether it will provide a suitable environment and | | | | the Mortgage has been repaid. In the case of a |
| investment for the family. The Search is designed | | | | sale any outstanding Mortgages must be |
| to satisfy the concerns raised by the Law | | | | discharged out of the sale proceeds before we |
| Society and the Search provides a property | | | | account to you for the balance. Some mortgage |
| specific map showing site history information to | | | | lenders no longer require the title deeds to be |
| enable you to pinpoint potentially contaminative | | | | deposited with them following dematerialisation. |
| historical land uses. Environmental Data is an | | | | You may wish us to hold your deeds in our |
| essential part of Residential conveyancing and | | | | storage facility for safe keeping or alternatively |
| provides a comprehensive site history of | | | | we can forward the documents to you. It is |
| Information for all 0f mainland Britain and the | | | | advisable that the deeds are held by us in case |
| location of potential risks in relation to a property | | | | the documents are lost or destroyed Whilst in |
| and potential landfills and other factors affecting | | | | your possession as they will need to be produced |
| the actual site where the property is situated. We | | | | to your solicitor in the event of a future sale. |
| would strongly advise that you have an | | | | You may wish to surrender an existing Life |
| environmental report carried out prior to | | | | Insurance Policy upon completion of a sale, before |
| exchange of contracts taking place as tile | | | | doing so however, we would recommend that |
| implications of contamination being found in the | | | | you speak to your Financial Advisor regarding the |
| future and an environmental notice be served | | | | advisability of surrendering such Policy. It may be |
| upon your remedial/clean up works can be costly | | | | in your long term interest not to do so. |
| to rectify. Should you wish us to carry out an | | | | Estate Agents Account |
| environmental report on your behalf please | | | | In the event of a sale it is normal for the Estate |
| instruct us immediately and we shall advise you of | | | | Agent to forward to us his account for payment |
| the cost. | | | | and this is usually paid by us out of the proceeds |
| Deposit | | | | of the sale unless we receive your written |
| On the purchase of a property it is normal to pay | | | | instructions not to do so. Some estate agents |
| a deposit when Contracts are exchanged. It is | | | | contracts contain a clause regarding an early |
| traditional for the deposit to equal 10% of the | | | | payment discounted commission rate. Please |
| purchase price (less any deposit that you may | | | | ensure that you read your contract carefully and |
| have paid to the seller's Estate Agents). In certain | | | | should it contain a clause to this effect you must |
| circumstances, for example where a sale is also | | | | advise us immediately and provide us with a copy |
| involved or a 95% Mortgage has been Obtained, it | | | | of the contract. We cannot accept any liability for |
| is possible that the Seller may agree to accept a | | | | late payment of your account if we are not |
| reduced deposit. A Buyer does however, remain | | | | made aware of such clause. |
| liable to make the deposit up to 10% in the event | | | | Confidentiality |
| of the Buyer failing to complete the transaction | | | | The information which we hold in connection with |
| after Contracts have been exchanged and as a | | | | any business undertaken on your behalf is |
| result of such actions the deposit being forfeit t0 | | | | confidential and cannot be communicated by |
| the Seller. We will also require documentary | | | | ourselves to any party without your consent. |
| evidence as to the source and origin of the funds | | | | There are times when we need to pass on |
| to be utilised for the purchase where you are | | | | information in your best interests, for example in |
| providing in excess of 10% of the purchase price. | | | | the case of a purchase the Selling Agent may |
| Exchange of Contracts | | | | wish to know the progress of the transaction and |
| Once satisfactory Searches and information have | | | | whether your Mortgage has been confirmed. If |
| been received and when the financial | | | | such information is not given the Agent may |
| arrangements, such as the obtaining of a | | | | consider advising the Seller to re-market the |
| Mortgage have been concluded, the Contracts, | | | | property. |
| which each party will already have been asked to | | | | Tax Implications |
| sign, are then exchanged and the deposit paid. At | | | | Whilst we will be dealing with the legal aspects of |
| this point the deal becomes binding and both | | | | this transaction to ensure that the legal estate is |
| parties are committed to the transaction. If the | | | | transferred validly, we are not in a position to |
| Buyer backs out after the exchange of Contracts | | | | advise you on any possible tax consequences of |
| then the deposit is forfeit and action may be | | | | the transaction. If you are concerned that there |
| taken by the Seller for Breach of Contract. If the | | | | may be such consequences, we would strongly |
| Seller refused to complete, the Buyer may take | | | | advise you to seek the assistance of an |
| action for Breach of Contract. | | | | accountant or contact us and we can recommend |
| After exchange of Contracts you can make the | | | | you to a Financial Advisor whose services you |
| necessary arrangements for your removals and | | | | may or may not wish to use. |
| contact the appropriate Service Boards to have | | | | |