Conveyancing and Mortgages – Frequently Asked Questions

by:

FinanceLaw

These frequently asked questions and answers relate principally to conveyancing and mortgages in England and Wales. If you want to know more and in detail just contact a conveyancing and mortgage solicitor most of whom will give free initial advice. You should not progress forward in any way without first obtaining advice from a conveyancing and mortgage solicitor.

How long does it take from start to finish?

This is a question that is difficult to answer with any degree of accuracy. There are many factors that are outside the control of a conveyancing and mortgage solicitor who acts for the buyer or seller and any one of them can cause a delay. It is therefore not advisable to plan definite moving dates until contracts have been exchanged at which time buyer and seller are contractually bound to complete the transaction and even then things can go wrong if one of the parties in the chain has difficulty raising money at the last moment. The average conveyance takes between 6 to 8 weeks to complete from giving instructions to moving in.

What is exchange of contracts?

Under English law a contract for the sale of land must be in writing and this is achieved by each party to the transaction signing a separate copy of a written contract for sale and the buyer’s solicitor and the seller’s solicitor then exchange those written contracts so that the buyer has the sellers signed contract and vice versa. The arrangement to exchange contracts is now done over the telephone, at which time the contract becomes binding and physical exchange of contracts occurs a few days later by post.

When does the seller receive the sale money?

Once the firm of conveyancing and mortgage solicitors has received all necessary money from the buyer, including the conveyancing fee they should be in a position to send a cheque or make a direct electronic bank transfer, for a small charge paid to the bank, to the vendor of property on the date arranged for completion which is usually, though not always, about two weeks after exchange of contracts.

Where do I collect the keys from?

The seller’s estate agent will usually hold a set of keys which will be released to the buyer once the seller’s solicitors confirm to the estate agent that the sale has been completed. Completion takes place when the full purchase money is transferred from the buyer’s solicitor to the seller’s solicitor which, because of the large volume of transactions handled by the banks computer systems, can take place at any time during completion day.

What if I change my mind?

You can pull out anytime up to exchange of contracts but after exchange of contracts has taken place you are legally bound to complete the purchase. Failure to complete the purchase means that the other party could take court action to force you to complete the purchase or they could be awarded damages for your failure to abide by the contract. You can pull out any time before exchange of contracts and people often do for financial reasons or because they have changed their minds or because the property survey reveals problems.

What is the deposit for?

The deposit eventually becomes part of the money paid to buy the property and is usually paid at the time contracts are exchanged. The standard rate is 10% of the purchase price but purchasers often negotiate a smaller percentage. If the buyer withdraws from the sale after exchange of contracts or fails to complete within a reasonable time period the seller is entitled to keep the deposit. Many sellers’ exchange contracts with a nil deposit to ensure they have a binding contract which can be enforced by conveyancing and mortgage solicitors.

When does the buyer have to pay his money?

The buyer must normally pay 10% to the seller as a deposit at the time contracts are exchanged however this requirement may be waived by the seller. The balance money due under the contract is payable at the time of completion and any delay in payment at the date set for completion results in the payment of interest until such time as the balance is paid. The rate of interest is usually set at 4% over bank base rate to deter late payment.

What are Title Deeds?

These are the documents that show who owns a piece of land and they also contain information on financial charges that are registered against the land including mortgages and any restrictive covenants and rights of way that may affect the land. Old fashioned paper deeds are becoming something of a rarity as all transactions are now recorded electronically at the land registry which will provide a printout of the documents if requested.

What does it mean to own property jointly with another person?

There are two ways that land and property can be held jointly:-

    Joint tenants

This is the most common way to hold land. It is the way that most married and unmarried couples deal with ownership. It means that if one of the joint owners dies the property automatically transfers to the other at the moment of death no matter what is said in the will.

    Tenants in common

 Land that held under this regime does not automatically transfer to the survivor on death of the co-owner and will be disposed of either in the way that a will indicates or if there is no will under the intestacy rules whereby it will pass to the next of kin. It effectively means that each owner has a separate share which need not necessarily be equal, and can they dispose of their share as they please. In the event of death if the property is held as tenants in common it will be necessary to obtain a grant of probate or letters of administration to dispose of the deceased’s interest whereas if the property was held as joint tenants a death certificate is enough to prove the joint owners entitlement to the property.

What is a restrictive covenant?

This is a condition that is written down in the property deeds that imposes a restriction on how the land can be used. It is possible for a conveyancing and mortgage solicitor to make an application for a variation to the court under certain restricted circumstances or the person who originally imposed the restrictive covenant or the person who benefits from it may be prepared to grant a waiver.

What is stamp duty?

Stamp duty is a government tax that goes into the Chancellors coffers. It is paid by the purchaser of property. It only applies for property priced above a certain threshold and the rate is variable dependent on the price of the property. There are some areas of the country which have been designated as ‘disadvantaged areas’ where the stamp duty threshold has been raised.

Leave a Reply

Your email address will not be published. Required fields are marked *