Buying Your New Home Part III – Honing the transaction

Once again, I find myself apologising for the delay in moving this series forward.  Its been a hectic couple of months as I’ve been dealing with Tallents’ Solicitors’ admin as we move towards a new era of regulation from the Solicitors’ Regulation Authority.  There’s been a lot of new regulation and procedures to take on board, most of which solicitors have always done, in the main, but which now needs documenting in a different way.  However, that’s a story for another day.  Those who have been paying attention have got their contracts issued for their house sale and are probably wondering what happens next.

Next is actually where the work of the buyer’s solicitor really begins.  If I’m acting for a buyer, I need to check the title papers for the property.  A lot of the time, it is relatively straightforward, as the title is registered and all of the relevant information is on the title registers.  Sometimes, however, it is unregistered land and each of the documents has to be read in detail, to trace ownership and check any covenants (obligations) and easements (rights).  We have to make sure that the property can be used for what the buyer is expecting to us it.

Consideration has to be given to the specific circumstances of the individual property.  Does it have direct access from a public highway?  Is there a possibility that the property may have to contribute to the maintenance of a local church (Chancel repair)? Is there a possibility of a public footpath or right of way affecting the property.

The Buyer’s solicitor then carries out a number of searches – usually these are Drainage, Local Authority and, in Nottinghamshire, a Mining Search (although, interestingly, not in the centre of Newark, which is too close to the River Trent, and not in the heart of Southwell, where mining was forbidden within a couple of miles of the Minster).  Environmental searches are often requires, although solicitors with a good local history will have a reasonably good knowledge of former land uses in the area.

The solicitor must then interpret the search results.  There may have been works to the property for which there is no planning consent.  There may be planning consent that has not been implemented.  The local authority may be considering enforcement action for planning breaches.  All of these things need to be considered and, if necessary, resolved.  In recent years there has been more and more bureaucracy requiring paperwork (and I pass no comment as to whether this is a good or a bad thing).  Since 2002, any new windows need the proper paperwork.  Since 2005, all electrical and boiler work has needed it.  In the last 10 years, the Building Regulations became more complex and most works need completion certificates.

Whilst this going on, the buyer’s solicitor prepares a transfer deed for approval.  This is the document that both parties sign and that is ultimately the paper that hands over ownership of the property.

We’re not too far away now and next time we will look at exchange of contracts, completion and registration.  And I promise not to make you wait so long for the next one!

Buying Your New Home Part II – The First Steps

First of all, I offer my apologies to anyone reading this right now who is hoping to do their own conveyancing. There are a lot of stages and procedures and it may be some time before this series is finished! When I am finished, though, I would hope that you will all have some sort of overview of what I and my fellow property lawyers do to earn our money.

The first step that anyone contemplating buying or selling a property will have to do is choose a solicitor. If you look in your Yellow Pages or Thomson Local, you will see that there are quite a few out there. Some are local, some further away. All are desperate for your business. It is often (but not always) the case that those further away who are advertising in your locality are what High Street Solicitors would term ‘Conveyancing Factories’. With such firms, they carry out a lot of transactions and work in teams. Quite often the people you deal with will not be qualified but will have a qualified lawyer overseeing 20 or more of them. You may find that you will not speak to the same person twice on the telephone. It is also often the case that they will quote for headline costs that sound very low. You then discover the additional cost if there is a mortgage involved, for completing Stamp Duty forms and several other steps.

For some people this is fine. If you are only selling, the property is freehold and you have it mortgage-free, then you will be quids in. However, transactions like that are few and far between. Most people buy when they sell. A huge percentage have mortgages. Your property may be leasehold. You may only be selling part and retaining the rest.

High Street firms tend to be better placed in terms of conveyancing. Usually the lawyer dealing with you will know the area, know what specific items to look for. For instance, would a factory firm in Devon know that you need mining searches for properties throughout Nottinghamshire, but not in Newark or in Southwell? You could end up paying for searches you don’t need without that knowledge and experience on your side.

I know what you’re thinking. To quote Mandy Rice-Davies…”He would say that, wouldn’t he?” My answer is that I do have a position to protect but above are some of the reasons that I work at Tallents and not in a bulk conveyancing firm. We have systems in place to ensure that you have a named person dealing with your file (with bags of qualifications, bags of experience or (more often than not) both). You can always contact that named person and we don’t offer a charter to return calls ‘within 24 hours’ – we will, of course, be much quicker than that. Your advantage is that firms like Tallents rely on your business, your recommendation and want you to come back next time. We have to work hard to earn that from you.

OK…so we’ve looked at some differences in firms. Ultimately, though, word of mouth and recommendations are the best way to choose.

Once you have your solicitor sorted, they will open a file and send you a bundle of documents to review. Unfortunately, we are governed by more and more bureaucracy. Whether we are buying for you, selling, or both, we can no longer allow money to change hands until we are sure of who you are. (Another advantage of using a local firm with whom there may already be strong connections and who know you already). As I often tell clients, the Government has decided that everybody is a criminal and if they get away with it, its my fault! We therefore ask for certain ID documents. This used to be almost embarrassing and people baulked at it, but we’re now in a climate where such evidence has to be produced regularly for all manner of reasons.

When you are selling a property, the next stage is for your solicitor to obtain your deeds. Sometimes these are with a lender (particularly if you took out a mortgage more than 10 years ago). In more recent years, lenders suddenly realised that they were running out of storage space, so the Land Registry adapted its systems and most lenders no longer retain title deeds. Your ‘title deeds’, if there has been a transaction within the last 25 years locally, will be registered at the Land Registry and the worst case scenario is that, if you lose them, less than £10 will get you another copy from the Land Registry online.

However, solicitors generally look for more than this simple document which proves your ownership. Purchasers will be interested in planning consents, warranties, certificates and more. Sometimes a Land Registry Title Information Document will raise issues that only an old deed can provide the answer to.

The additional paperwork I referred to above will include a fittings and contents form for you to complete stating what is included in the sale and what is not, and a Property Information Form. This latter form gives the buyer an indication of some important matters which will not show up on the deeds – have there been any disputes? Who has looked after which boundaries? Have there been any extensions, new boilers, new windows or electrical works? These documents ultimately form part of the contract so you have to fill them in carefully.

So, we now have you identified and we have your paperwork. At this point, I think its only fair to leave you hanging and continue to retain the ‘mystique’ of the Law which is enshrined in words such as ‘indenture’ and ‘easement”.

Part III to follow.

Buying Your New Home – Part 1 – Overview

Happy New Year to you all.

I thought that I’d put together a little series explaining the steps involved in basic conveyancing transactions

These days contracts are usually exchanged over the telephone and most solicitors will call their clients immediately to let you know the good news. It’s safe to crack open the champagne now. Things can go wrong between exchange and completion but it is extremely rare. I have dealt personally with only two cases in 18 years.

In the first one the purchaser died the day before completion was due to take place. It was resolved for the deceased’s spouse and the seller’s were quite understanding so there was no additional cost to my client, although there could have been.  In the second case, the purchaser’s lender had overlooked the issue of funds, causing a lot of stress for the solicitors involved.  However, we were able to get all parties in the chain into their new properties over the weekend under licence and then completed on the Monday.  The only cost here was about £100 in interest along the chain and this was paid by the defaulting party.  As everybody had got into their properties when they expected, I imagine nobody particularly gave it a second thought over that weekend.

Nevertheless there are a number of legal procedures that must be dealt with before completion can take place. The main ones are as follows.

Evidence of title/contract

The vendor’s solicitor will send your solicitor a copy of the deeds or a summary of their content. If your solicitor has any questions he will make enquiries before contract.  He will also carry out the necessary searches.

Draft transfer/conveyance

The vendors’ solicitor will send your solicitor a draft transfer (for registered property) or conveyance (for unregistered property). This is the deed which passes the vendors’ interest in the property to you.

Mortgages

Your solicitor will write to your mortgage lender to ensure that the mortgage money is available in time for completion.

Engrossment of transfer or conveyance

When both solicitors are satisfied with the terms of the deed it will be ‘engrossed’, ie a final version will be prepared for signature by both sides.

Signing of final documents

You will be asked to sign the final documents and provide a banker’s draft (or, more often these days, a telegraphic transfer) for any further money required to fund completion over and above your mortgage advance.

Final searches

Your solicitor will conduct a final Land Registry search in case the vendor has just been declared bankrupt (in which case the property would no longer be his to sell) and to ensure that no last minute charges have been registered against the property. These could affect the mortgage lender’s security.

 

Over the next few weeks, I’ll explain each of these steps in a bit more detail.  The amount of work required for any particular stage will vary depending upon the location of the property, its history and the quality of the package supplied by the vendor’s solicitors at the outset.

Business on your terms? Or your customer’s?

Terms and conditions are, in essence, the terms of contract between a business and the customer. For a business, they are designed to protect its rights, limit liabilities and provide some peace of mind that you will receive payment when selling goods or providing services. For customers, they also provide protection if a business fails to live up to its promises. Jeremy Blatherwick from Tallents Solicitors in Newark, explains the key facts regarding terms and conditions that every business owner should be aware of.

Says Jeremy,

“Never underestimate the importance of getting the wording of your terms and conditions right. It’s not enough to simply copy them from a similar business, or get them from the internet. They form a legal contract with your customers, so you should always consult a solicitor when drawing them up.”

At their most basic, terms and conditions should cover:

• Costs
• Delivery arrangements
  

  Jeremy Blatherwick

• Payment terms – in advance, or in arrears? Is there a discount for paying early?
• Credit limits and credit periods – if you don’t set any, then the law defaults to 30 days
• Your right to charge interest on late payments and claim compensation for any debt recovery costs
• Termination rights
• Your commitment to quality
• The Data Protection Act and what you will do with your customer’s data.

Jeremy continues,

“It’s also very important to understand ‘when’ you should make customers aware of your terms and conditions so that they are legally binding and enforceable. It’s not sufficient just to print them on the back of your invoices, sit back and hope for the best.

 “Customers should be made aware of, and agree to, your terms and conditions long before the invoice is sent to them. We recommend that terms and conditions should be explained, or made available, to customers at the very start of your relationship with them, for example on your estimate or quotation for work, or on your website.

 “At the very least, they should be given to the customer when they place an order with you. This gives the customer the opportunity to consider and raise any issues before proceeding with the order.”

In the event of a dispute, the enforceability of terms and conditions is greatly weakened if they have not been incorporated into an agreement before it is completed.

Jeremy says,

“Terms and conditions that have just been sent out with a delivery note or invoice do not afford the customer the opportunity to raise any issues before you make a request for payment. In dispute situations, terms and conditions that have been issued in this way may not form a legally binding contract between you and the customer as the contract has already been entered into and obligations will have, most likely, been completed, whether satisfactory to both parties or not.”

Jeremy concludes,

“For peace of mind, we recommend that business owners review their terms and conditions regularly, and always consult a solicitor when drawing them up. Not to do so could leave a business out of time and out of pocket for something that could have been sorted quickly and easily.”