What is conveyancing procedure
It is a procedure involving several consequential steps which has to be followed before the transaction is lawfully completed. When you decide to buy or sell a property and instruct a solicitor with respect to this transaction, the whole job will be in his hands and he will inform you of the steps he is taking throughout the transaction. The steps for the Buyer’s and the Seller’s solicitor differ. After taking instructions the procedure is as follows.
The Seller’s Solicitor will prepare a draft a contract and will send it to the Buyer’s Solicitor for approval. He will also obtain title documents from the Land registry. Title documents are the evidence of ownership of the property and various other rights. The Buyer’s Solicitor will make pre-contract searches and pre contract enquires, investigate and rise queries on title/current ownership of the property.
Precontract searches and enquiries
Pre contract searches and enquiries is a set of questions to be asked the Seller’s Solicitor and Local Authority with respect to the concerned property in order to find out whether there are any third party rights and interests in the property. Failure to investigate and do those searches and enquiries may result in you buying the property which in the end may partly belong to those third parties and not solely to you. If the Solicitor fails to investigate properly you will have a right to sue him for Professional Negligence.
The Seller’s solicitor will deduct the title/ownership of the property and answer pre-contract enquiries and queries on title. When answering the questions the Seller or his Solicitor must not deliberately conceal the facts and current state of the property. Failure to do so may result in you buying the property which in fact is not what you thought it was. You could have a remedy in suing for a breach of contract in this instance. The buyers solicitor must be cautious as the sellers solicitor however has no duty to disclose the facts which are discoverable upon inspection. The Buyer’s solicitor will then report on title and approve or amend the draft contract.
Both solicitors exchange contracts. At this point the agreement is legally binding and there is no step back. It is therefore very important to decide before the exchange of contracts takes place whether you want to go ahead with the transaction. The Buyer’s solicitor will prepare a purchase deed , raise standard requisitions and do pre-completion searches. The Seller’s solicitor will then approve the purchase deed and answer the requisitions. (e.g. discharging mortgage, the amount required on completion from the Buyer). Both solicitors will then prepare for completions and the completion takes place.
Standard requisitions and pre-completion searches
Standard requisitions and pre-completion searches are again necessary to be carried out as final searches for any third party interests in the property before the completion takes place.
Post Completion matters
For residential transactions SDLT (Stamp duty land tax) is payable for any consideration of more than £125,000. If the property is considered to be in disadvantaged area the threshold rises to £150,000. In commercial properties no SDLT is payable for any consideration of £150,000 or less.
Differences in residential and commercial conveyancing
Residential conveyancing deals with residential property as opposed to commercial. For residential transactions there are common Home Information Packs. It is a collection of information and documents about the concerned property . (E.g. sale statement, energy performance certificate, searches, evidence of ownership, any information about leasehold). Your solicitors may decide to adopt the National Protocol in residential conveyancing transactions.