Conveyancing Process Overview

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Introduction to Conveyancing Overview

What follows is a brief overview of  the conveyancing process from the point of view of both buyer and seller. For a more in depth look at particular topics use the menu on the left.

The conveyancing process begins with both buyer and seller instructing a solicitor. Except in certain exceptional circumstances the same firm cannot act for both parties.

The purchaser's solicitor will usually confirm they are instructed to the seller's solicitor, at which point the seller's solicitor will issue the contract package. Traditionally it was necessary to wait for title deeds to be delivered to the seller's solicitor before the contract package could be issued however except in the case of unregistered land this is no longer the case.

The package consists briefly of a draft version of the contract, Official Copies of the legal title, copies of any deed/documents which affect the title, a Sellers Property Information Form and a Fixtures, Fittings and Contents Form, both completed by the seller. If a Home Information Pack (HIP) is supplied it will include the result of conveyancing searches which are otherwise carried out by the purchaser's solicitor. If the title to the property is Leasehold, the contract package should also contain the Lease.

At this point the title deeds should be ordered by the seller's solicitor (if not already obtained) and a provisional mortgage redemption statement should be requested for budgeting purposes.

Once the purchaser's solicitor has received the contract package he will order the conveyancing searches and also raise any necessary enquiries with the seller's solicitors. It is a good idea for the purchaser's solicitor to draft the Transfer Deed for approval at this point. This is traditionally done after exchange of contracts however with many solicitors now being at a distance from their clients, and with a gap of more than 7 days between exchange and completion a rarity, leaving it until this stage will often cause problems on completion.

It is then up to the seller's solicitor to answer the enquiries. Some may be technical points relating to the contract and others may be relating to the state and condition of the property, comments on the fixtures and fittings list, enquiries about disputes etc. These latter will be passed to the seller to answer in his own words. The seller must be careful to ensure the answers he provides are accurate and that there are no obvious omissions as it will generally be a condition of the contract that the buyer is entitled to rely on the replies. The seller's solicitor should check any replies and qualify them where necessary, for example if the question is asked: "Is the central heating system in good working order?" and the seller answers "Yes" this implies that the seller has checked the system. Usually this will not be the case and might be amended to "The seller is unaware of any problems however he is not qualified to answer this question and the buyer must therefore rely on his own inspections and surveys".

According to National Conveyancing Protocol, the buyer's solicitor should not use a standard pre-contract enquiry sheet. These sheets are easily recognisable being usually pre-formatted and containing several enquiries which either mirror those raised in the Sellers Property Information Form or else are not relevant to the transaction. They also contain enquiries relating to the state and condition of the property, which are issues for a surveyor rather than a solicitor. They not only create additional work for the purchaser's solicitor but also place an onus on the seller to answer questions which he is not really qualified to answer - for example questions as to the condition of the property which ought to be covered by a survey or questions about events at the property prior to his ownership, and they should be rejected in the first instance. If the purchaser's solicitors insist, as some will, then it may ultimately prove simpler to allow the seller to answer them, but in this case the solicitor must be certain to check the replies carefully to ensure the seller is not making a statement which is clearly beyond the scope of his knowledge.

On receipt of the search results the purchaser's solicitor may need to raise some further enquiries. Once all the outstanding points are answered, and provided the purchaser's solicitor is in receipt of his client's Mortgage Offer, he will be in a position to report to his client. It is important to note that there are always two copies (or three if a broker has arranged the mortgage) of the offer produced. The offer that is issued to the solicitor is different to that issued to the client in two crucial respects. Firstly, it will contain the Mortgage Deed and Certificate of Title and secondly it will contain a covering letter addressed to the solicitor which is the lender's instructions to the solicitor to act on its behalf. With out these instructions a solicitor should no more act for a lender then he would a buyer who had not provided him with written instructions. The offer may contain Special Conditions which the solicitor (or purchaser) needs to satisfy before the funds will be released by the lender.

When reporting to his client the traditional method is for the solicitor to invite him to his office to go through the papers and sign the contract and Mortgage Deed. Often today however, particularly where the solicitor is at a distance from his client, a written report will be prepared and posted together with the papers. The client can of course discuss any points which might arise over the telephone.

The seller's solicitor should have had the contract signed by their client once it was approved and so once the buyer has signed his contract and paid his deposit both parties should be ready to exchange contracts. Exchange takes place over the telephone between the solicitors. The formalities are completed by each party forwarding the other his client's part of the contract, but it becomes binding at the end of the telephone call.

In order to complete the seller's solicitor must be holding a Transfer Deed signed by the seller. According to protocol this Deed is drafted following exchange, however given the timescales involved this is often impractical and usually it will be drafted, and signed, much earlier in the process.

He must also have obtained a redemption statement in respect of the seller's mortgage/s, as he must give an undertaking on completion to redeem all financial charges secured on the property.

A date for completion will be agreed prior to exchange and then fixed in the contract. Between exchange and completion the purchaser's solicitor must carry out the final searches, that is to say the OS1, OS2 or K15 and if the purchaser is obtaining a mortgage, the K16 (Bankruptcy Search). He must also submit the Certificate of Title to the lender. Note should be taken of the timescales imposed by the lender for issuing the advance monies. Most lenders require that the Certificate of Title be submitted 4 - 5 working days prior to the day on which funds are required, however some do ask for longer. A lender will usually issue funds on shorter notice however they will not offer any guarantees and therefore contracts should not be exchanged for a completion date which does not allow time for the full notice period to elapse. Instead, exchange should be delayed until the advance monies are actually received.

Monies will normally be sent by telegraphic transfer. This method only guarantees that funds will reach the destination on the day of issue - it does not guarantee delivery by a certain time. It is prudent therefore to request the monies for the day prior to completion in order to reduce the risk of placing the purchaser in breach of contract.

On the day of completion the purchase monies (less any deposit paid on exchange) will be sent by telegraphic transfer to the seller's solicitor. Provided his solicitor has received the funds the seller must give up possession to the purchaser by no later than the latest time for completion in the contract (2pm according to the Standard Conditions but often varied to 1 or even 12pm). The purchaser is equally obliged to ensure the funds reach the seller's solicitor by the contract time, and this highlights a quite fundamental flaw in the system for completion - the buyer is contractually bound to deliver funds to the seller by a given time, however the only method of transmission which, under the Standard Conditions, he is entitled to use cannot guarantee a delivery time! Surprisingly, this actually leads to relatively few problems, and provided the funds arrive with the seller's solicitors in time for onward transmission, late delivery is not usually penalised. The seller's solicitor must now redeem all financial charges secured on the property.

Following completion the transaction must be registered at HM Land Registry. There are 2 basic stages to the registration process. First, the Stamp Duty Land Tax return must be submitted. This applies whether or not stamp duty is actually due for the transaction. On receipt of a satisfactory return the Inland Revenue will issue a certificate in form SDLT5 which must be presented to the Land Registry upon registration.

The second stage is to submit an application to amend the register (AP1) which should contain the following documents: Evidence of discharge of the seller's mortgage/s, the transfer deed signed by both the seller and purchaser, the mortgage deed (if applicable), the certificate SDLT5 and a cheque for the appropriate registration fee. There is no fixed timescale in which the registration process should be completed however it will generally take between 6- 8 weeks.

Following completion the registration, evidence should be supplied to both the purchaser and the mortgagee, and thereafter the file may be archived.

Regards

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