Sale Conveyancing Guide

Introduction to the Sale Conveyancing Tutorial

What follows in this page is a comprehensive guide to carrying out the conveyancing in the sale of a property. It covers freehold, leasehold, registered and unregistered land. It is separated into sections, so that the reader may study the whole document, or else skip to those topics which are of particular interest. In theory, this page should provide sufficient guidance to allow a layman to conduct his own DIY sale conveyancing; however this course of action is not without risk. Some of the more common pitfalls are discussed in a separate page - DIY Conveyancing Risks. It is recommended that anyone planning to try DIY conveyancing reads this page first.

Obtaining Official Copies

This section, and the next, applies to registered land. If the land you are selling is not yet registered with Land Registry, skip to “Deducing Title to Unregistered Land”.

You can Order Official Land Registry Documents from our sister site. We aim to return your documents via email within 24 hours.

As well as the official copies for the property itself you should, where the property is leasehold, order the freehold official copies and those for any intermediate leasehold title (i.e. relating to any headlease). Whether or not there is a mortgage on the property very few lenders now retain title deeds in respect of registered land therefore you should ask your client if he has the original lease and if not you should order this also.

Checking the Official Copies

The "Official Copies" page is a full tutorial on checking official copies, including a sample Official Copy and is recommended reading. When carrying out sale conveyancing, you need only perform a basic check, since it is up to the purchaser's conveyancer to pick up on any defects etc. You should check that the property address matches that of the property being sold, that the names of the proprietors match those of your clients, whether there are any restrictions on sale and that the financial charges actually registered match those which your client will have advised you of. Beware particularly of second charges to protect secured loans as many clients will not realise such a charge has been registered. It is a good idea also to check for any documents which the purchaser's conveyancer might request copies of. If you have the title deeds and the documents are with them you should send copies with the contract papers. Otherwise you should obtain copies from land registry.

For leasehold properties you should check the freehold Official Copies to ensure that the proprietor of the freehold and the landlord as advised to you by your client are one and the same and that the lease of the property you are selling is noted in the schedule of leases usually found at the end of the Charges Register. Although not essential as it is for the buyer or his conveyancer to identify any defects, it is wise to check the lease in order to anticipate any issues that are likely to arise. For an in depth discussion on checking the lease see the module “Purchase Conveyancing Guide”.

Deducing Title to Unregistered Land

The process for proving ownership of unregistered land is different and substantially more complex than for registered land. It is covered in detail in the following module “Deducing Title to Unregistered Land”.

Preparing the Contract Package

You are now ready to prepare the contract package. This should include the following documents:

• the draft contract
• Official Copies (including those for the freehold and any superior leasehold titles) if the title is registered of the epitome of title and copies of the documents referred to if the title is unregistered
• the sellers property information form
• the fixtures, fittings and contents list
• the seller's leasehold information form (if the property is leasehold)
• copies of any guarantees relating to the property that will handed over to the buyer on completion
• copies of any planning permissions, building regulations approvals, CORGI/Gas Safe certificates, NICEIC certificates etc.
• copies of any documents referred to in the property information form such as local authority notices, letters regarding disputes with neighbours etc.

The contract is drafted by the seller's solicitor (or by the seller directly if the seller is unrepresented). A valid contract for the sale of land must satisfy the requirements of s2 Law of Property (Miscellaneous Provisions) Act 1989, which is to say that it must:

• be in writing
• be signed by the parties to it
• contain all of the agreed terms

For help on drafting the contract, including where to obtain a precedent contract, see “contracts for conveyancing”.

The seller's property information form contains details a set of standard questions covering points such as whether any works have been carried to the property, whether there have been any disputes with neighbours, what services are connected to the property etc. The seller's leasehold information form asks questions about rent and services charges, disputes with the landlord etc. For further information and for precedent form click the relevant link: seller's property information form / seller's leasehold information form.

The fixtures, fittings and contents list is a checklist of items that might typically be found in a property. You as the seller then indicate in respect of each item either that it will remain on completion and be included in the sale, it will be removed, it is available for sale to the buyer and if so how much for or that there is no such item at the property. For a precedent (this is not in the Law Society's approved form but covers the same points) click fixtures, fittings and contents form.

Enquiries of the Landlord/Managing Agent

This applies only where the property is leasehold. For freehold properties skip to “Dealing with Pre-Contract Enquiries”. There is certain information that a buyer will always require from the landlord/managing agent and it is accepted conveyancing practice that the seller will obtain it on the buyer's behalf. Since the same basic information is needed in every case and since it will often take 2 – 3 weeks to get the information it can save time to raise a set of standard enquiries at the same time as issuing the papers rather than waiting for the buyer to raise them.

The information required from the landlord will be in respect of matters such as rent and service charges, whether any covenants have been breached by the tenant and whether any major works are planned to the property which are to be charged to tenants as well as details of the assignment requirements.

A typical set of landlord enquiries can be obtained by subscribing to our service. The landlord or managing agent will usually charge a fee, which will be payable in advance of the replies being prepared. There is no standard fee and it could be anywhere from £50 - £300 and beyond. The buyer may of course have additional specific enquiries that he wishes to raise which may lead to an additional fee being payable.

Dealing with Pre-Contract Enquiries

Once the buyer's conveyancer has received the sale contract package he will usually wish to raise some pre-contract enquiries. According to the National Conveyancing Protocol these should be limited to enquiries on the title, and matters that could not reasonably be dealt with by the buyer's own inspections and surveys. This means that the solicitor should only be raising either legal points, such as suggesting amendments to the contract for sale, asking for copies of documents referred to in the property title, queries about rights and covenants etc., or else points arising from comments the seller has made in the Seller's Property Information form, for example if the seller has said the property has an extension the buyer's conveyancer might ask to see the planning permission and building regulations consent, or if the seller has said there has been a dispute with a neighbour the buyer's conveyancer might ask for details of how it was resolved. He may also raise pre-contract enquiries based on information received from any other source such as the results of the conveyancing searches or the estate agent's particulars.

If the property is leasehold and a set of replies to landlord enquiries have not already been supplied then the buyer should raise them at this stage. The Protocol is not binding and in particular it does not prevent the buyer's conveyancer from raising any points which his client has specifically asked him to raise.

Some of the enquiries raised will be for the conveyancer to deal with, while others should be passed to the seller.

The seller's conveyancer should not answer, nor ask his client to answer, any standard pre-contract enquiry sheets. Some conveyancers have a list of standard pre-contract enquiries, a copy of which they will pass to the seller's conveyancer on every transaction. Aside from the fact that they may well not even be relevant, making the exercise a waste of time, they are often designed to trap the seller into making representations which he is not in a position to make. A common example might be a question that reads "Is the central heating in good working order?” The seller will often happily answer "Yes" believing it to be true. By answering yes however the seller is implying that he knows it to be in good working order, because he has had it inspected by a qualified engineer, and not merely that he has no reason to believe it is not. If a fault then comes to light following completion, the seller would be liable.

If a buyer's conveyancer refuses to proceed without a standard pre-contract enquiry form being completed by the seller then the seller should be as non-committal as possible, for example in response to the central heating query he might answer "To the best of my knowledge but I have not had the system inspected therefore I can offer no warranty". The seller's conveyancer should check the seller's replies for instances where he may be accepting a liability for something he should not.

Following the introduction of the Land Registration (Amendment) Rules 2008, which came into effect on 10th November 2008, it is necessary for any party to the transaction (including any lenders whose mortgages are being discharged by DS1/3 as opposed to END) to be identified - that means that if they are not represented by a conveyancer they must provide a completed form ID1 or ID2 (ID1 for individuals; ID2 for corporate bodies). That form must be submitted to the land registry along with the application for registration the purchaser's solicitor will require it prior to exchange of contracts.

Exchanging of Conveyancing Contracts

Once the pre-contract enquiries have been dealt with, the seller has signed the contract, and provisional redemption figures have been obtained for all mortgages secured on the property, the seller's conveyancer is ready to exchange contracts. Exchange is the point at which the contract becomes binding on all parties. It is likely that the seller's conveyancer will be ready before the buyer's conveyancer since the buyer's conveyancer has the bulk of the work to do. Even though the seller has signed the contract, and you may have discussed exchange with him previously, it is good practice to speak to him on the day of exchange to ensure his position has not changed. For more on exchanging, see the topic "Exchanging Contracts".

Preparing for Completion of a Conveyancing Sale

Mortgage Redemption Statements

Immediately following exchange an up to date redemption statement should be applied for. Completion should not take place unless an up to date statement is received. At the least the entire sale proceeds should be retained by the seller's solicitors until the redemption statement is received.

Sale Conveyancing Completion Statement

The seller's conveyancer should prepare for his client a completion statement, which should show all the incomings and outgoings for the transaction, and the bottom line should be the balance due to the client. This will allow the client to see a breakdown of how the balance to him has been calculated and allow him chance to query any figures, for example if he believes the mortgage redemption figure to be wrong, or the estate agent's fee (which it is usual for the seller's conveyancer to pay on the seller's behalf, though there is no obligation to do so). The completion statement will also be a useful checklist for the conveyancer since it will list all the items that have to be paid from the sale proceeds and will tell him exactly how much to transfer to his client. Click here for an example completion statement.

Apportionments of Rent and Service Charge

If the property is leasehold there will usually be rent and service charges to pay. Where this is the case, they will normally be collected by the landlord for a given period, such as 6 months or a year, in advance. This means that unless the sale completes on the last day of a given period the charges will need to be apportioned between the seller and the buyer. This involves looking at what the seller has actually paid for the period in which the sale completes, deducting what he was liable for up to the date of completion and requesting payment from the buyer, along with the purchase price, of the balance. Consider the following worked example:

The annual service charge is £1,200. The service charge year ruins from 01 January – 31 December. The seller has paid in full for the year and the sale completes on 29 February. This means that the seller should only be responsible for the charge up to the end of February and should be reimbursed for the rest. To work out how much the seller should be reimbursed, first work out the daily rate of service charge payable. To do this divide the annual service charge by the number of days in a year, so 1200 / 365 = 3.29. Next, work out how many days the buyer should responsible for, i.e. how many days there are between the completion date (but not including the completion date) and the last day of the period. In our example that means counting from 01 March to 31 December. This means the buyer is responsible for 306 days at £3.29 per day so 306 x 3.29 = £1,006.74. This would be the apportionment due from the buyer along with the purchase price.

If the seller has not yet paid the service charge (unless it is demanded in arrears) then it ought to be paid from the proceeds of sale and apportioned in the same way. If it is demanded in arrears then it is necessary to calculate the amount the seller would have paid had he not sold before a demand was received. To do this, again work out the daily rate (if no estimate as to the charge for the period is available it be necessary to base calculations on the previous demand) and multiply it by the number of days from the start of the period up to and including the day of completion.

Retentions against Service Charge Balancing Charges

Service charges are usually demanded and paid at the start of a period based on an estimate of what the landlord believes he will spend during in that period. Inevitably therefore he wills sometimes under estimate what he needs to collect. Once the final accounts for the period are produced, should this reveal that not enough has been collected the balance will be payable by and will be collected from the tenants in the form of a balancing charge.

This creates the possibility that a balancing charge may be demanded after a sale has completed which relates in whole or part to a service charge period before the date of completion of the sale, so that the former owner ought to be responsible. Nonetheless, the landlord will be entitled to issue the demand to the owner for the time being, i.e. the purchaser.

To ensure the purchaser does not lose out in this way by having to pay balancing charges which ought to be paid by the seller, the purchaser's conveyancer will often ask for a sum of money to held back from the sale proceeds (a retention) pending production of the final accounts. If the final accounts reveal that a balancing charge is payable this can be deducted from the retention and the remainder can be returned to the seller.

Where a retention is being held, the terms on which it is held (i.e. the amount and the latest date by which it can be released) need to be agreed and a clause needs to be added to the contract to reflect the agreement. The following is a suggested clause:

“The Seller agrees that his solicitor will hold a retention from the sale proceeds in the sum of £X pending production of the final accounts of Some Flats Management Company Limited for the 2010/2011 financial year. On production of the accounts and in the event that a balancing charge is payable the Buyer will, via his solicitor, calculate what proportion is due from the Seller and will provide the Seller's solicitor with a completion statement. Provided the Seller's solicitor agrees with the Buyer's solicitor's calculation the Seller irrevocably instructs his solicitor to release the amount due to the Buyer in accordance with the completion statement. In the event that the retention is insufficient to meet the proportion due the Buyer will accept the full retention in full and final settlement. In the event that no completion statement is produced by [a date by which the final accounts should have been produced and the buyer's solicitor should have had time to produce a statement] the Seller shall not be liable to the Buyer for any monies that would otherwise have been due and the retention shall be released to the Seller in full”.

In addition the seller's conveyancer should confirm in writing that he will hold the retention. If the seller is unrepresented the retention should be held by the buyer's conveyancer.

Transfer Deed

Once contracts are exchanged, the seller's conveyancer must prepare the file for completion. Firstly he must arrange for the seller to sign the Transfer Deed. This is prepared by the buyer's conveyancer as a draft, traditionally following exchange but these days usually beforehand, and it must be approved by the seller's conveyancer. If after exchange the buyer's solicitors have still not supplied a draft deed then the seller's conveyancer must ensure that this is done or else draft their own. Completion should not take place without a signed transfer deed.

Replies to Requisitions on Title

If not already done, then following exchange of contracts the buyer's conveyancer will raise with the seller's conveyancer "Requisitions on Title". This is a standard set of questions, the most important of which are asking for confirmation of what deeds will be provided on completion, a request for undertakings to repay all charges secured on the property, and a request for the bank details for the payment of the purchase monies.

Completion of the Sale

On the day of completion, the buyer's conveyancer will transfer the purchase monies by CHAPS/telegraphic transfer to the seller's conveyancer's account. The latest time for completion of the sale will be fixed in the contract, but effectively completion takes place when the funds are received by the seller's conveyancer and when the seller has vacated and delivered the keys to the estate agent (or to anywhere else that is agreed between buyer and seller). On receipt of funds, the seller's conveyancer should telephone the estate agents to authorise them to release the keys to the buyer, the buyer's conveyancer so that he can inform his client, and of course the seller. He should then ensure that the mortgage is repaid on the day of completion and that he submits a form DS1 to the lender for sealing, unless the lender uses END (in which case they will lodge evidence of discharge of their charge electronically. For a fuller discussion on completion, including dealing with any problems that might occur, visit the "Completion" page.

Post Completion

Barring any problems, all that the seller's conveyancer need do post completion is to ensure that the discharge document/s are obtained from the lenders in respect of any financial charges paid off on completion, and that these are forwarded to the buyer's conveyancer. Once this is done the seller's conveyancer will normally archive his file.