Conveyancing Process Part Two

By Author: Jenny Khan
Total Articles: 2
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Conveyancing Process Part 2 details the process followed by conveyancing solicitors in general from exchanging contracts to registration of the property title. This is generally the easier part of the transaction but sloppy conveyancing practice at the beginning can makes the process unnecessarily cumbersome and protracted. The process detailed in this report is that followed by Conveyancing Solicitors at www.phew.co.uk Please contact the Phew! Conveyancing team for further information.

The Conveyancing Process: Exchange of contracts
Deposit

On exchange of contracts of a purchase it is usual to pay to the sellers' solicitors a deposit of up to 10% of the purchase price, but it is sometimes possible to agree to a 5% deposit.

Once we have your deposit in cleared funds, signed contract and authorisation, we can proceed to the exchange of contracts with the seller and agree a completion date. The deposit will be forwarded to the seller's solicitors on exchange of contracts, as security in case you do not proceed with the purchase. (Please read the section below on Money Matters)

Exchanging contracts
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Until the exchange of contracts, there is no legal liability on either the purchaser or seller to proceed and either party may withdraw from the transaction at any time.

Once contracts have been exchanged (usually by a telephone call between solicitors) both parties become legally bound by the terms and conditions of the contract and will be required to complete the contract.

The agreed completion date will be included in the contract; you will not be able to change the completion date once contracts have been exchanged. If you cannot complete on the contractual completion date your deposit may be forfeited and you may be sued for breach of contract.

Stamp Duty Land Tax (SDLT)

The completion of the SDLT form is your responsibility and you may complete this form on your own. However, when we act as your agent in completing the SDLT form we may make a reasonable charge. In which case our charge would be reflected in the estimate of costs provided.

Please note that there are strict time limits that must be followed. In the event the SDLT form is not received by the Inland Revenue within 30 days of the date of completion, you will be charged penalties.

The Conveyancing Process: Pre-completion

Between exchange and completion the following takes place:-

Transfer

The seller will sign the transfer document. This is the document that we lodge with the Land Registry to prove the existing owner agrees to the transfer of ownership of the property to you.

Mortgage funds

If there is a mortgage lender involved, we will contact them to release your mortgage funds in time for completion. Please note, to avoid late completion we request for mortgage funds two days prior to completion. This may mean that you will be charged interest by the bank for 2 additional days.

Final searches and enquiries

By this stage, Land Registry searches would have been completed. These searches disclose any mortgages that are on the property and any disputes concerning the property.

Financial Statement

We will send you a financial statement showing the amount required to complete the transaction. This statement will detail all expenses incurred on your behalf or about to incur and includes our fees. It also states the stamp duty payable.

Building Insurance

From the point that contracts have been exchanged, you may become responsible for the property, which means you should obtain suitable building insurance to cover the property. Buildings insurance should be for the full reinstatement value (as specified in your valuation report) and your lenders interest should be noted on it.

The Conveyancing Process: Completion

On the day of completion, we will send to the seller's solicitors via telegraphic transfer the purchase monies. The seller's solicitors will then confirm receipt once they have received the money, and will then authorise the seller to release the keys to you.

Unless you state otherwise all correspondence from the day of completion will be sent to your new address.

After completion the following happens :

 The seller's solicitors will forward the transfer and title deeds to us.

 We make an application to the Inland Revenue to pay the stamp duty on the property.

 We make an application to the Land Registry to register the property in your name.

Exception to the rules: simultaneous exchange & completion

If the property is vacant and all parties are in agreement with this method of completion, we can arrange for contracts to be exchanged and the transaction to be completed on the same day.

5. Registration

Once the property has been registered in your name, we will send the title deeds to your mortgage lender, who will hold on to these as security until the mortgage has been paid off. You will receive a letter confirming registration of the property in your name with a certified copy of the registration documents showing your ownership of the property.

RESOURCES:
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