Denise Stradling, from THP Solicitors' Residential Property team, explains the various stages of the conveyancing process when you buy or sell a property.
So, how does the conveyancing process begin?
Once a buyer has found a property to purchase, or in the case of the seller has accepted an offer on a property, they contact a solicitor to instruct them to move the process to the next stage.
Once the buyers and sellers have instructed solicitors, the estate agent will issue a sales memorandum to all parties involved, so that the conveyancing process can begin.
One of the big concerns at the moment is money laundering, so solicitors have a responsibility to protect against fraud when they start the process with your clients, don’t they?
Yes, to protect against fraud, one of the first things we need to do is obtain ID for each person that’s involved in the matter that we’re instructed on, so we can verify their identity. For a buyer we must also obtain information with regards to their savings, their mortgage etc .and how the money is being obtained for their purchase.
And that’s simply to check if, for example, if they are buying the property in cash or don’t have a mortgage, the money used to fund the purchase has not been obtained through criminal activities?
Absolutely, and to check that the money is indeed their funds and that there is no third party involved, to ensure we are complying with the Anti Money Laundry Regulations.
Right, so once that is done, I’m guessing you move on to the meatier paperwork?
If we are acting for the seller, they need to complete what we call the protocol forms, such as a Property Information and Form and Fittings & Contents form. They then need to return them to us together with any relevant paperwork that relates to the property, so for example, Fensa certificates for windows, planning and building regulation documents etc. We normally ask for as much information as the client has, so we can it put together with the property information form.
And that will save time, the more information you get upfront?
Yes, the more information we get at the start, normally the fewer enquiries will be raised during the process later on, so we tend to ask our seller clients to provide us with everything they have, so that way we know from looking at the paperwork what is needed, and which documents are required.
If a seller has a pack of information from when they purchased a property that’s always useful as it will have information from their previous sellers, and maybe more details of any works undertaken prior to their ownership.
The seller has to be very careful when completing those forms, don’t they? There was recently a well-publicised case when a seller ticked ‘No’ to a question about whether Japanese Knotweed was present on their property, but it turns out there was, and it ended up costing the seller £200,000 to compensate the person who had purchased their property. So, when you fill in these forms it’s important to do it honestly and accurately.
It is difficult, because some sellers don’t always know the answers to some of the questions but it’s very important that they are completed to the best of their knowledge/ ability because once it gets close to the exchange of contracts, the details and information provided in these forms are relied on by the buyers and their solicitors to be accurate and to be correct.
So once that paperwork is complete and people have provided all of the supporting documentation required such as guarantees, building permissions, and have said if they are leaving anything behind that will be included in the sale, the next stage is presumably to move on to drafting of contracts?
Yes, most properties today are registered at the Land Registry, so the Title documents are downloadable from their portal. Once we have these title documents, we can then prepare the contract, and send that together with the deeds and seller’s protocol forms and relevant information to the buyer’s solicitors.
And then if you are acting for a buyer, you need to scrutinise this information?
Yes, once we have received the draft contract papers from the seller’s solicitors, the first thing we tend to do is check the title plan and order the necessary searches that relate to it. So, it is always important to check the title plan to ensure that there is no missing land, because some properties may have two titles relating to that property, to make sure that when we apply for the searches, we are covering the full extent of the land.
We try to do the searches quite quickly because some Local Authority searches can take a couple of weeks to come back. Whilst we wait for those, we will review the draft contract pack, look at the title, protocol forms and documents provided by the seller’s solicitors.
When the searches come back, we will also review those and raise any necessary enquiries for information that we may need clarity on or if there are missing documents so that we can give a full picture to the buyer when we present our report to them.
About searches – what exactly are they?
There are three main searches that are carried out for most properties by the buyer’s solicitor: –
All the searches are specific to the property.
So once the buyers and sellers have exchanged information and the solicitors are happy with the responses they have had, what happens next?
Well once we know everyone is ‘ready’ we then start to talk about completion dates that are agreeable with everyone, and the buyer of the property will need to place a 10% deposit in order to proceed with an exchange. By this time, we will have reported to the buyer and sent the documents for signing, so it’s imperative we get those original documents back in order to be in a position to exchange contracts.
When it comes to exchanging and completion, is this normally done on the same day or is there a gap in between?
It depends on the chain but generally, there is a week between exchange and completion, the reason being that if the buyer is obtaining a mortgage, we need to request the funds from the mortgage lender and they normally require a minimum of 5 working days.
Sometimes, we do undertake a simultaneous exchange and completion on the same day, which can be quite stressful because you don’t know until the day if you are moving or not. And sometimes we have delayed completion dates e.g., in two months’ time, and this can be driven by various reasons e.g., people wish to move in the school holidays or have to accommodate work commitments.
As long as all parties agree to the dates, it can however be as short or long as it needs to be.
So, exchange means the ‘deal is done’ and you are committed to it and the completion is the day that everyone moves and swaps keys?
The point of exchange means that the sale or purchase is legally binding. So, for a buyer, at the point of exchange the buyer effectively owns the property and the seller holds the property on trust until the completion can take place. And then on the day of completion, the monies for the sale/ purchase are transferred through the banking system and once that transaction is complete then that is officially when completion takes place.
And once the property transaction is complete, you then go on to register the property for the buyer at the Land Registry?
Yes, for a buyer we submit an application within a month of completion to apply for their ownership with the Land Registry.
There are a lot of moving parts essentially, during that process, and presumably the longer the chain is the more complex it gets?
Yes, it really does depend on how quickly enquiries are responded to and dealt with and how quickly clients can get signed documents back to us. If there is a long chain that can delay things a bit, as you have more people to try and coordinate with, and progress on the same sort of time frame. For example, agreeing on completion dates when there is quite a long chain can be quite stressful if people want different dates.
If you were to give a person a tip, on one thing they could do to speed up the conveyancing process, what would it be?
If we are acting on the sale, and we have enquiries raised that the seller needs to respond to, turning around the replies quickly can make a difference. It’s good just to keep the lines of communication open between clients and solicitors on all sides so that everybody knows what is happening. One of the main stress points of buying and selling is that it can consume people’s personal life and increase stress levels, so ensuring everyone knows what the current position is can help to alleviate some of that stress.
Thank you, Denise. If you are looking to buy or sell a property and would like some advice or a quote for conveyancing please contact our Residential Property team.