Conveyancing is the process of legally transferring data from one person to another. The real conveyancing process takes place after verbal agreement for the sale of the property has been reached. At first glace the entire process appears very simple but this is not always the case. There are strict legal and procedural requirements for property transfer. The degree of complexity of the process can depend on whether the property is free from any interest or there are taxation or liability considerations involved. Completing the conveyancing process smoothly involves transferring the property without third party interest or claim. Banks and mortgage companies can hold legal claim to the title of the property. In the case of business transactions, property can be used as collateral to secure a loan. Doing the necessary background checks to make sure the property is free of any registered interests is an important part of the conveyancing process. There are several different options for the conveyancing process. Often, the real estate agents recommend services or legal personnel they are familiar with. Since the advent of the internet, online conveyancing companies are becoming a more popular choice for individuals who want to complete the process digitally. The modern conveyancing firms deal exclusively online and save both time and money.
The following is a general guide to the conveyancing procedure when buying a property. If you are in doubt about any specific issue you should consult your conveyancing solicitor.
Initial Stages: Once you have told the solicitor that you wish to use their services you should receive a Letter of Engagement or confirmation of Terms of Business. You should sign and return this as soon as possible so that they can start work. Funds will be requested to cover initial expenditure such as the cost of the searches. Your solicitor will write to the seller’s solicitor to confirm that they are instructed and request the draft contract. This should arrive with a pack that includes information on the property title and the standard forms collected by the seller. If the property is leasehold a copy of the lease will also be included. Many people buy houses in joint names and, as such, need to be aware of an important decision to be made in relation to joint ownership. There are two ways that you can jointly own property. Joint tenants: this is where both parties have equal interest in the property and if one dies the survivor automatically owns the property. Tenants in common: each one owns a specific share of the property and can leave that by Will, in the event of your death. Before you commit to buying the property your solicitor will ask you your wishes regarding shared ownership: You need to let your solicitor know from the outset if you are also selling a property and need the transactions to be tied together. Inform your estate agent which solicitor you plan to use so that they can send a “Memorandum of sale” to all the relevant parties together with a copy of the property particulars.
Legal Work prior to Buying: The solicitor will examine the draft contract documents and if necessary raise enquiries with the seller’s solicitor. You will be required to go through the standard forms that the seller has completed and let the solicitor know if everything is as you expected. If the property that you are buying is leasehold your solicitor will send a standard Managing Agents Questionnaire to the seller’s solicitor which will in turn be sent on to the relevant Landlord/ Managing Agents/ Residents Association.
Mortgage and signing of contracts: If you are taking out a mortgage your solicitor will receive a copy of the offer and go through the conditions. He will normally undertake legal work on behalf of your lender as well. Once the answers to all the enquiries have been returned they will be examined by your solicitor. If they are satisfactory you will be invited in to sign the contract and any mortgage documents. You will need to make arrangements for the deposit to be transferred into your solicitor’s bank account so that it is cleared in time for an exchange.
Exchange of contracts: Before exchange of contracts can take place your lender will require you to have a Building Insurance policy. All the parties involved need to agree on a completion date. From the point at which contracts are exchanged you are legally bound to buy and the seller legally bound to sell. Should either party back out the other will be entitled to claim compensation for losses arising. At the point that contracts are exchanged your solicitor will send your deposit to the seller’s solicitor. This acts as security for the seller in case you change your mind or for some reason are unable to pay the balance and complete the purchase. If that happens, the seller can keep your deposit, and may take you to court if the deposit is not enough compensation for breaking the contract. In the same way, if the seller exchanges contracts and then refuses to complete the sale, you could apply to the court for an order to force the seller to complete, or else get your deposit back and sue the seller for compensation. It is rare for the sale not to complete once contracts have been exchanged.
Between Exchange and Completion: Your solicitor will draw up the transfer deed so that the property can be registered as soon as possible after completion. Your solicitor will also carry out some further searches of a technical nature. During this period you should receive a statement from your solicitor showing all expenses and giving you a final figure, you should clear this amount before completion. If you are taking out a mortgage your solicitor will draw down the loan amount in time for completion.
On Completion: Completion is normally set for around lunchtime on the specified day although in practical terms completion takes place when the seller’s solicitor confirms that they have received all the money that is due. Once this has happened the seller should drop the keys off to the estate agent ready to collect. Your solicitor will arrange for the title deeds to be registered in your name and if the property is leasehold ensure that your name is entered on to the lease. They will also get the transfer stamped to officially approve the sale. Finally, if you have taken out a mortgage, the deeds are sent to your lender for safe keeping until you either sell the property or pay off the loan.
Conveyancing solicitors are a more costly option but can provide legal recourse if negligence or fidelity issues become a concern during the transfer process. If you have more complex issues such as taxation or will entitlements to deal with, the additional funds invested in a professional service can save you headaches and valuable time. Before you choose a conveyancing service, it is important that you consider all the issues that apply to your circumstance and engage a service that is most appropriate for you.
Source- http://www.mypropertyguide.co.uk
