Frequently Asked Questions

Additional Enquiries & Replies Pack

This pack includes additional enquiries (questions) we have had to ask the seller solicitors before you are in a position to decide whether you want to complete or not. The replies received are also attached for you to read – including letters and documents. If you have any questions or wish to raise more enquiries of the sellers let us know immediately, otherwise we will assume you are satisfied with the replies and documents and want us proceed to exchange and complete based on these.

Additional Enquiries - Restrictive Covenants

A restrictive covenant is a private agreement between land owners where one party will restrict the use of its land in some way for the benefit of another’s land.

Restrictive covenants, once agreed between the parties, are placed in the title deeds to the property. They bind the land and not the parties personally. Your buyer is asking you to confirm that these have not been breached. Once we receive the Buyer’s Solicitor’s enquiries, we will highlight the relevant sections on the title for you to read.

Additional Enquiries - Local Authority referred documents

This is a search of the local authority’s records, including planning, building control, highways department etc. It is a search of the subject property only.

You should hold documents from when you carried out the works or if the works are prior to your time of ownership your previous solicitor (from when you purchased) should have obtained these for you. If you do not hold these, your buyer’s solicitors are asking that copies be obtained from the Local Authority. Please have a look at their website for details on how to order copies.
Once we receive the Buyer’s Solicitors enquiries, we will highlight the relevant references on the extract from the local authority search which will assist you in obtaining these documents.

Additional Enquiries - Retention / Allowance

The buyer solicitor has asked you to deduct money from your sale price to cover a ‘Retention’. This is not a legal issue but a commercial decision only you can take.

What is a retention?
A sum of money deducted by the buyer to cover the risk of a shortfall in ‘service charge underpayments’ covering your period of ownership but only revealed often up to a year after you move out (simply because it takes that time for the Management Company accounts to be completed, sent to their accountant, audited and certified and returned to the Management Company to issue).

What is an allowance?
You simply agree to deduct the retention figure from your sale price and forget about it.
Most clients choose this because it is cheaper in the long run, faster and cleaner. If you choose to give with a one-off allowance and not a retention I will, as goodwill, carry out the extra work for free, to amend the contract to add this extra deduction clause (called a legal ‘allowance’).

Additional Enquires - outstanding replies

What additional enquiries are outstanding? On Report on Title to you as buyer, your lawyer will notify what enquiries the seller or the seller solicitors have been replied, those that you can take a view on, and those that you can’t. Until that point, your lawyer will still be title checking and will still be waiting responses and documentation from the seller’s solicitors to ensure there are no issues on the property you are purchasing. Prior to completion your lawyer will send you a Report on Title and comprehensive document pack, and also send some of these as your case progresses, such as searches. At report stage you will receive all relevant correspondence from the enquiries, property information form, fittings & contents form, leasehold information form (if a lease), guarantees, warranties, planning documents, building regulations certificates and copies of deeds and plans from land registry.

Additional Enquiries - Indemnity Insurance

Legal indemnity insurance is obtained in order to offer protection to a buyer (and a lender) where there is a defect in the title which cannot be resolved. It often provides a quick and low-cost alternative to the work required to correct a defect which will usually cost several hundred pounds in legal fees and will take several weeks.

The premium for a legal indemnity insurance policy is paid only once, and in most cases is automatically transferred to successors in title and lasts for the life of the property.
If you are purchasing it should be remembered, and be pointed out, that legal indemnity insurance does not remedy the insured defect, but merely offers financial compensation. You should also check each policy individually to see what actions might invalidate the cover. For all indemnity policies however, it is a condition that their existence must not be revealed to third parties.

How much will an indemnity insurance policy cost?
The premiums for indemnity insurance policies are charged on a sliding scale, depending on the value of the property, and they also vary depending on the risk insured. The cost will range from as little as £20 to as much as £300, or occasionally more for a non-standard policy.

What will an indemnity insurance policy cover?

The answer to this question depends on the particular risk you are intending to insure, but basically indemnity insurance covers loss of value to the property and legal costs.

Allocated Conveyancing Unit

Lack of communication is one of the biggest complaints made to the Ombudsman about lawyers. Take your time to find a lawyer who neither works alone on your case (ask what would happen if they were out, or on holiday etc.), nor works for a big team (where your case could get lost with less accountability and control). Don’t be shy to ask if your lawyer will be prepared to allocate a 2 or 3 person conveyancing unit to your case, covering issues if one or other is on the phone, for example.

AML - Anti-Money Laundering Regulations

What are Money Laundering Regulations? They were introduced by the Government by their Money Laundering Regulations 2002 and updated by legal directives issued by the Government. How strict are the money laundering rules. They are what are legally called ‘strict liability’ offences. This means someone can be in breach of money laundering rules even for innocent errors. Why were the Money Laundering Rules introduced? To reduce the risk of terrorism and illegal activity within the UK, and especially with billions of pounds being laundered in UK property. Are their penalties? Yes, penalties include thousands of pounds in fines, and in serious cases imprisonment. They can also lead to delayed completion, and risk the defaulting party paying compensation. these apply in all UK conveyancing transactions as these involve the use of money to purchase property. Lawyers are prevented from acting for any seller or buyer unless their client can pass these UK Money Laundering Regulations. Talk to your solicitor about this at your quote stage in case you have any risk of difficulties such if your passport is missing, or you don’t have sufficient ID evidence or your purchase money is coming from an external source, such as a family member etc., as this can slow you down and risk you not being able to move in time or at all.

AML - ID for Seller and Buyer

Why is ID needed? Under the Government’s Anti-Money Laundering Regulations both buyer and seller must evidence their true identity. This is to combat the billions of pounds criminals and terrorist groups, for example, are money laundering in the UK by buying and selling property.

Do I have to pass?

Yes. This is a strict liability offence and you will be liable to penalty, both financially and criminal, even for innocent errors.

What ID do I need to provide?

Your lawyer will send you a list of Government approved IDs. Follow that list. As for ID, you can send, for example, your passport or photo ID driving licence. As proof of your address you can send two separate documents, ranging from a recent utility statement or bank statement etc., showing your residing address.

AML - Can I email or do I need to post my ID documents?

By post. Given the high level of fraud and money laundering activity in the UK, best practice is for you to post your ID documentation to your lawyers. Some firms ask for your original passport etc., while others will accept copies.

AML - Source of Funds (Purchase only)

What is source of funds? The government requires a buyer only, or a donor of a gift to the buyer, to produce evidence that their funds are genuine. Why do you need to provide source of funds evidence? This is to battle the billions of pounds being laundered each year in the UK property market by criminals washing dirty illegal money by buying and selling property. Sadly, the strict provisions are needed, and cause extra work for both innocent buyer and seller but it is something both need to do, in order to buy and sell.

How do I pass source of funds?

Your lawyer will send you a source of funds questionnaire asking questions as to your occupation, income, savings, etc. It is not something they enjoy doing and please do not be offended when they ask you these questions as they are forced (for the right reasons) to ask these questions under the government Money Laundering Regulations Act 2002. Your lawyer will also ask for your latest bank statement showing source of funds. Each lawyer is different, but you must be guided by them.

AML - Digitial Technology

New technology is allowing some lawyers to utilise digital face recognition software to allow their clients to reduce their need to send ID evidence by post. Ask your lawyer about this. We are currently using both copy postal and digital AML checking.

Balance of Money to Complete

This represents the balance to be paid by the client to their lawyer in order to put their lawyer in funds to complete the conveyance. This amount will vary depending on whether the case is a sale or a purchase, on whether it is a freehold or leasehold and on third party disbursements such as stamp duty or the amount of the deposit paid. Essentially, prior to completion, your lawyer will send a completion statement to you, showing what you need to pay, i.e. on a purchase it would be the purchase price plus legal costs, plus 3rd party disbursements, less what you have paid so far.

Building Insurance as a buyer

The buyer must put building insurance in place in respect of the property on exchange of contracts. It is essential because if the property is damaged (i.e. fire, flood) they are responsible and could lose tens of thousands of pounds if not insured, of personal expense. If you have a lender, they will not allow you to exchange contracts without you firstly purchasing building insurance prior to exchange of contracts and secondly sending both them and us a copy of your insurance schedule before you exchange. If their interest is not noted, or you purchase the wrong cover which does not meet your lender mortgage conditions (or those of the Council of Mortgage Lenders), then you risk losing your 10% deposit and being sued for other losses such as hotel bills if the seller does not move in time and cost of their removals because your mortgage is delayed or withdrawn.

Completion

The completion date is the legal day the seller moves out and the buyer moves in. The time of day by which the seller must vacate the property on the completion date, is set out in the contract. It is normally either 1pm or 2pm. If the seller does not move out by the completion time on the completion date the seller can sue them for breach of contract.

Completion Financial Statement - Purchase

When is this sent?

Your lawyer’s completions team will prepare a financial completion statement for you, sent 5 working days before the completion date.

When do I send completion money?

You then need to send this money to complete prior to your completion date, to ensure your lawyer can send the balance payable to the seller on the completion date. Don’t forget, this money must appear as cleared funds, so the sooner you send the balance the less complications you risk, such as delayed completion. As a buyer, this will show you how much balance you will have to pay, first deducting your deposit, but adding third party costs such Stamp Duty, Land Registry, search disbursements, and legal costs, for example. If you are buying a leasehold, the completion statement may arrive just before completion because your lawyer may be waiting for apportionment statements from the seller’s solicitors or the management company, to ensure you don’t overpay for unpaid service charges owed by the seller for example. Overall for both freehold and leasehold, please expect a delay in general due to unforeseen circumstances that can apply.

Completion Financial Statement - Sale

On a sale, you will be owed money, so the completion statement will be calculated fully to your completion date and sent to you on completion to ensure no last minute figures are miscalculated. On completion, arrangements will also be made to send the seller their balance, after paying off any mortgage, third party disbursements, legal costs and estate agent commission and so forth. If leasehold, your lawyer will need your help in dealing with apportionments with any service charges etc. that you have paid upfront, or are due to pay prior to completion, or these can be deducted from the sale proceeds as an apportionment.

Contract Agreement

This document is the legal agreement between yourself and the seller.

Contract (The Agreement of Sale)

This is the contract signed on exchange of contracts which binds the seller and the buyer. It sets out the terms of what has been agreed such as the property, the price and the names of the parties. It also deals with the process if something goes wrong. It is no longer necessary for the parties to meet to sign the same contract. The seller’s solicitor prepares two copies of the same contract with each party signing their own copy of the document and at exchange, the contracts are exchanged between the respective lawyers, by telephone, at which time the completion date is inserted in the contract, and the deposit transferred to the seller’s solicitors.

Covenant, Deed of Covenant and Easements - Land Registry

The document you enter into with the management company to ensure you agree to pay for any service charges etc.

Conveyance - HMLR Land Registry

This is a document relating to the property that may have rights or benefits affecting the property.

Deposit - What is it?

A deposit is a sum of money, 10% of the purchase price, which the buyer pays to the seller (but via their own lawyer, sent to the seller’s lawyer) on exchange of contracts. It’s a deposit which legally binds the seller to sell, and the buyer to buy on the agreed completion date (also fixed on the exchange date).

Deposit - Why 10%?

The Law Society Contract of Sale, used by buyer and seller conveyancers to exchange contracts, states the deposit normally at 10%. If the buyer does not have 10%, this is more complicated, but your lawyer will explain your options. You may need to negotiate if they will accept 5% for example. If as the buyer you have a related sale, and your deposit is coming from that sale? This is easier to negotiate as the person you are buying from should allow you to use the deposit money coming from your sale to purchase, but knowing that even if you don’t complete, you are still liable to pay the seller the entire 10%. So on a related simultaneous sale, just send the difference.

Deposit - Don't pay until your lawyer sends you a Report on Title

When to send the deposit as a buyer?

You will be notified by your lawyer when they send you a Report on Title as they will also send you a letter which tells you the next steps you will need to take to proceed towards exchange.

When is the deposit payable by the buyer?

On exchange of contracts. It should arrive with your lawyer a few days to a week or more in advance.

Why should it arrive earlier than the exchange date?

Because the seller solicitors will require your deposit to be in your lawyer’s bank as cleared funds otherwise the seller solicitors cannot allow exchange. Many buyers send their deposit potentially a week in advance to ensure those funds are cleared and ready to be transferred to the seller solicitors on the day of exchange.

Should I send as soon as possible?

Yes, because your seller solicitors will not allow you to exchange contracts without knowing that you have transferred to our account cleared deposit funds.

How do I send the deposit?

By Bank CHAPS/ TT (Telegraphic Transfer) and not by BACS and cheque (to avoid clearance delays). Your lawyer will have provided their bank details in their very first letter to you.

Deposit - Can it be less than 10%?

Sometimes the buyer will not always be able to provide a full 10% deposit, this may be because they are obtaining a 95% mortgage, or they are receiving less money coming up the chain. What this means for the seller is that on exchange the reduced 10% deposit, sometimes 5% if normal, will be paid. However, the contract provides that if anything goes wrong and the buyers cannot complete, then after a process is followed, the seller keeps the buyer’s 10% deposit. If the buyer doesn’t put the 10% deposit down, then the seller will have to pursue a claim, potentially via a litigation lawyer. The chance of a failed completion is slim, but still a risk for you to be aware of.

EPC - Energy Performance Certificate

Each home that comes on the market for sale will need an EPC. This means the property has to be inspected and an Energy Performance Certificate prepared. The Energy Performance Certificate is similar to the certificates now provided with domestic appliances such as refrigerators and washing machines. Its purpose is to record how energy-efficient a property is as a building. The certificate will provide a rating of the property from A to G, where A is very efficient and G is very inefficient.

Exchange of Contracts

This is when a legally binding contract is made. Until contracts are exchanged nothing is binding – either party can walk away from the transaction with no penalty. After exchange of contracts neither the buyer or seller can change their minds, the seller cannot increase their price, the buyer cannot reduce it, the buyer is protected if someone tries to ‘guzump’ (outbid your price) and the seller is protected if prices go down. This is also the day the move-in-completion date is fixed and provided to the lawyers in order for them to insert it into the exchanged contract. This date is mutually agreed between the buyer and seller, via their estate agent, and not through the solicitors as this will cause delay. Prior to exchange the seller and buyer will agree dates between themselves and then notify their respective solicitors who will try to fit in with the suggested date. If there are unforeseen delays, for example, if the buyer does not receive a search or mortgage offer in time, or any other complication then the completion date does not take place and the defaulting party will be in breach and pay compensation. For this reason, do not firm up commitments such as giving notice on a job, arranging removals or arranging to go away without exchanging contracts.

Exchange - How long does it take?

This varies in the UK depending on your chosen lawyer, on the time of year (as some periods are busier than others) and if you have a chain for example. This can range from 3 to 4 months. Completion can take up to 5 months from the start of you instructing your lawyer. Speak to your lawyer before you instruct them. Our own average is within 2 months.

Expedited Exchange and Completion

The Law Society Conveyancing Contract states you leave 20 working days between exchange and completion dates. If you wish to amend this to a shorter time period then you can do so. However, it will involve solicitors squeezing in 20 days’ work into fewer days, for which solicitors charge an expedited fee.

Expedited – 16-20 working days:

We make no charge for goodwill purposes.

Expedited – less than 15 working days between exchange and completion:

This is so short that we have to charge something. For additional work the SRA costs code allows our terms to charge an hourly rate (at £200 per hour). This could take in the region of up to two additional hours. However for goodwill we charge a one off discounted fee of between £97 and £149 (depending on how many days you leave and how busy we are). We hope this helps you. We repeat that whilst the Law Society Contract of Sale (5th Edition) asks you to leave 20 working days, we will try to meet an expedited date and we will charge a nominal discounted rate for this additional work.

Note, if you do want an expedited completion date of less than 20 working days, then please let us know as soon as possible so we can check whether we can fit you in.

Fixtures, Fittings and Contents Form

This is a list of the items at the property which the seller must complete stating if they are either included or excluded from the agreed price. This form is completed at an early stage by the seller and sent to the buyer, so that both parties understand what is included in the selling price. If you are the seller, when you let us have the form we will send you a copy back so that you know what you have agreed to. If you are the buyer, we send you a copy of the form as soon as it is received by ourselves from the seller’s solicitors so that any difficulties can be resolved at an early stage.

Freehold

This describes how the land is owned. Land is either freehold (usually houses) or leasehold (usually flats).

General Confirmation of understanding and instructions to exchange

This document provides your instructions and authority to exchange.

Gift Paperwork - For Buyer and Donor

The government AML – Anti Money Laundering Regulations apply to any person introducing money into the purchase. This includes a donor (someone making a gift, such as a relative). We understand it can be frustrating to ask the donor to not only make the gift, but then put them through the added stress of having to complete documents, make certain declarations, and provide ID and evidence showing where those funds came from. It is equally frustrating for us, with many more hours spent than we actually charge you, but it is a necessary complication due to money laundering in the UK.

Due to the billions of pounds being illegally laundered in the UK, through property, to fund criminal and terrorist transactions, the government requires this procedure before you are allowed to use donor money in a property purchase. One of the main requirements is that the government needs you to show where all of the purchase money is coming from, and they require us as solicitors to make sure that this is complied with.

If you are getting a mortgage to help you buy the property, your lender also needs you and your donor to provide both ID and Source of Funds documents together with signed declarations confirming that the money is a gift. If the requirements of both are not fully satisfied your lender won’t release the mortgage funds and the government wouldn’t let you purchase as all buyers have to comply with these. Also if you are obtaining a mortgage, your lender will either insist or prefer you purchase an indemnity insurance policy to cover where the borrower (i.e. you) are subject to a claim at any time within 5 years of your purchase. This is because the administrator in bankruptcy can reclaim that gift against you within those 5 years. It also covers if the donor gift is disputed, for example by a third party they owed money to, or if they change their mind or the estate disputes that gift. Your lawyer will notify you of this policy, and its cost, if applicable, but it is fairly cheap.

What do we do?

Our own process is very comprehensive so as to fully protect our clients and safeguard their risk of claim against their lender, or not obtaining their loan, if the gift process does not meet the lender requirements on or post completion. We will send you our gift procedure as soon as you notify us if you are buying with the assistance of a gift.

Gazumping

Where you are a buyer and another buyer outbids you or increases their offer and it is accepted pre-exchange of contract. You will have lost the purchase to that other party. The government currently does not prevent this.

HMLR Title Plan

This is the legal document that outlines the property on a plan.

HMLR Title Register

This is the legal document that outlines the property, who owns it, and describes restrictions or charges.

 

Indemnity Insurance Block Policy

This is our block policy offered by us to you for free, covering restrictive covenants, building regulations and planning permissions.

Indemnity Insurance Policy

This is completely different from building insurance. This is a specialist insurance policy which, if available, will offer cover for a legal defect. it does not correct or fix the defect but it essentially allows buyers and sellers to be covered and proceed with their legal transaction without trying to rectify the defect or even risk being turned down if they do try to rectify it (after which the insurers will not insure the defect as you are on notice of it). The need is normally found when the buyer’s lawyers check the title and find defective title. Examples of defects include: breach of covenants, lack of easements or missing planning or building regulations. In such cases, in order for the buyer to proceed to purchase, they will either need the defect to be fixed, or in some cases, they can have access to what is called an indemnity insurance policy to cover the loss for that risk. It is not a cure but an insurance policy to cover financial loss. This has now become acceptable in most conveyancing transactions as a way to move. The cost can vary from less than a hundred pounds to up to £1000 for more problematic defects. The higher the risk the more the insurance company will charge for covering that risk. Your lawyer will be able to help you obtain this quote for you. They cannot provide it as it comes from a specialist insurance provider.

 

Land Registry

This is the central government organisation in England and Wales which retains records of who owns every piece of land, and under what conditions. This was set up in 1925 to simplify the conveyancing process and register all land. Whilst the majority of land is now registered to date not all land in England and Wales is registered today and this is partly due to the fact that land can only be registered following certain “triggering events”. The Land Registry has their own website which provides useful information. See our Useful Links page for a link to this site.

 

Leasehold

Temporary ownership of the property. When the lease expires, ownership of the property belongs to the freeholder. This normally applies to flats.

 

Legal Fee for basic costs estimate

This is a cost for the time that is spent by your solicitor on a normal straightforward conveyancing transaction. All solicitors regulated by the Law Society are required to set out their basic fees for this in their quote estimate but also set out a method to calculate additional charges for additional work if required by your case once it has started. Some solicitors will apply an hourly rate to all additional time spent. Each is different. AVRillo, for example, adopt a more modern approach, and we try to limit our additional charges by setting out a costs menu of discounted fixed rate costs for possible additional work. Whoever you choose to instruct, before you do so, you must look at their terms of business. If they don’t send this with their quote estimate then you are missing valuable costs information which risks you paying additional fees you did not know about when you started. You must therefore ask to see all terms with your email quote, as afterwards it may be too late.

 

Letters to Lender Head Office

These are letters that we send to your lender as part of our role in acting for your lender. We report to them on the points they have asked to be reported on.

 

Local Authority Search

This is a document which the buyer’s solicitor prepares and sends to the seller’s local authority and which raises questions regarding the property. It covers items such as whether the road serving the property should be maintained by the council (i.e. adopted by them rather than the buyer having to contribute privately), whether there have been any planning applications on the property, and a number of other things. The search is against the property only and does not cover the surrounding area. A word of warning – the search will not show any planning permissions or matters affecting land or buildings outside the boundaries of the property. You must therefore let us know at the start of the transaction if you require information on any particular point or if you wish us to ask any particular questions of the local authority.

 

Management Company / Landlord - who are they?

A landlord is also known as the freeholder. It is the person or company that owns the freehold, and from which you take a part of that freehold building and own as a leasehold for a term of years, under certain conditions, including service charges being applied yearly as well as Ground Rent.

Landlords can appoint a Management Company to manage the blocks within the freehold for which they charge a service charge. A management service company is appointed to carry out services, such as maintenance in the building or its grounds (for example, grass cutting, window cleaning etc.).

Management Company/ Landlord - Who can you chase if they are slow?

We can chase your Management Company or Landlord for responses to the buyer’s solicitors enquiries, but they are notoriously busy, and can be slow. We usually find that since you have a direct client relationship with the management company (as you are paying their fee for your lease pack to be released to you), then they tend to respond more quickly to you chasing them directly. There are also sometimes cost implications for requiring further information from the management company once the management pack has been received. We can request further information and chase this on your behalf but the management company may charge additional fees for this, whereas as you are a direct client of theirs they may not charge further fees for this information.

 

Management or Landlord Lease Pack - Costs

When selling a leasehold property, the buyer’s solicitors will want what is called a leasehold pack either from the landlord or the management company or both. These packs include mostly financial obligations you have as a seller, and which they as the buyer they are taking over. They will want to know if there are any service charges owed, if you have paid in advance, or if any owed by you, which you have to pay off prior to or on completion (by apportionment). What happens if there is a delay in the lease pack being provided? The buyer’s lawyers cannot advise their client to complete and the defaulting seller will be liable to pay compensation to the buyer for late completion.
 
Costs charged by the Landlord and/or Management Company will be down to you and your landlord and management company. Without you as the seller paying these, they will not release your information. These can vary from £300 upwards. You can pay them directly, but it will be down to your landlord or management company whether they want the money sent by your lawyer or if they will allow direct payment by you.

 

Mortgages - IFA (Independent Financial Advisor)

Around 50% of buyers need a mortgage to buy a property. This can go up or down depending on price values and lending criteria. Ensure that you have planned sufficiently to make payments towards your mortgage and that you have sufficient cover in place should your circumstances change. As we specialise in conveyancing we do not provide financial advice. We recommend you always seek advice from an independent financial advisor before you embark on this. You can contact the IFA for an independent financial advisor.

 

Mortgage Offer & Deed

The mortgage offer contains the amount you are being offered, as well as the terms of this offer.

 

Mortgage - Early Repayment Penalty - Sale

This early repayment charge depends on your mortgage. Some lenders impose penalties if you pay off their mortgage early, normally if they have given you a better rate of interest.
 
If your lender notifies your lawyer that they have charged an early repayment fee on their loan, it will mean your lawyer will have to deduct this before they send you the balance of your sale money in order for your lender to remove their mortgage off your property at the Land Registry.
 
If you don’t agree with the early repayment charge, you have a customer relationship with the bank and will need to ask them to send this to us in writing. This is to protect you from being in breach of contract if they later state that the Early Repayment Charge was payable. If your lender does not write to your lawyer to change their mind, your lawyer will pay off the early repayment charge from your balance of net sale proceeds.

 

Mortgage Lender-Legal Work Generally

Lenders require you to appoint a separate lawyer to deal with their lender work, and you pay for that fee. It is a condition of your mortgage as they will need independent legal verification that work has been done correctly to protect their loan, and that you have not breached any conditions. This applies both on a sale and on a purchase, with different lender requirements for each.
 
You can usually appoint the same lawyer who deals with your conveyancing, and they should charge a reduced rate for goodwill, as you will be an existing conveyancing customer, even though the lender work is separate. You should check if your lawyer is on your lender panel of approved lawyers because no single lawyer is on every single UK lending panel. If they are not on your lender panel, they will be able to act for you separately on your conveyancing and suggest another lawyer to act on your lender work, or you choose your own lender lawyer. If you do not know your lender when you instruct, ensure you notify them as soon as you know.

 

Mortgage Lender Work - Purchase

Your lender needs someone to act on their behalf during the conveyancing transaction. This can be either us acting on behalf of your lender or an independent third-party solicitor acting on behalf of your lender.

We must be on your lender’s panel and comply with your lender’s rules during the transaction (which is stated in the CML handbook). The work involved acting for a lender imposes strict duties on the solicitor involved. Some of the duties involved are the tasks which we have listed below for you:

  1. Taking instructions from yourselves with regards to the mortgage.
  2. Receiving the mortgage offer from your lender.
  3. Checking the mortgage conditions contained in the mortgage offer.
  4. Reporting to you on the mortgage offer.
  5. Reviewing the lender requirements (under CML handbook).
  6. Carrying out pre-contract searches required by the lender.
  7. Carrying out enquiries required by the lender.
  8. Carrying out bankruptcy search required by the lender.
  9. Carrying out the OS1 search in the name of the lender as required by them.
  10. Checking the mortgage deed and other relevant documents for the lender.
  11. Preparing the document requesting the mortgage funds for you to complete on the purchase.
  12. Making an application to HMLR for registration of the mortgage on the property.

How much are lender lawyer costs? Mortgage providers estimate these in their mortgage offer but this is an estimate only. Check with your lawyer as they will provide the correct figure for you. This applies if you have a lender for your purchase (mortgage). Lender lawyer costs can range from £200 to £600. We charge £397.

Mortgage Lender Work - Sale

If you are selling and you have an existing mortgage on the property, your lender requires an independent lawyer to act for them in order to deal with the removal of the mortgage on the property (redeem the mortgage) and make payment to them. This has to be done carefully as, if they get it wrong, the lawyer will be liable to pay your lender any under payment directly, before they claim that back from you. In addition, your appointed lender lawyer will need to give a personal promise to pay your full mortgage, even if the figures are wrong. That undertaking has to be given to the buyer solicitors in order for the buyer lawyers to approve completion.
 
Check with your lawyer for the correct costs. This applies if you have a lender for your purchase (mortgage). The cost for this usually ranges from around £100 to £200 plus VAT. At AVRillo we charge £197 plus VAT.

 

Mortgage Lender - Can lawyers chase by phone?

No. Your lender will have specifically stated in their rules in the CML – Council of Mortgage Lenders handbook, that your lawyer can only chase in writing. We sometimes find that  chasing in general, even by letter, can cause the outstanding request to be put back because some lenders want to deal with all requests in one go. So if they see a later chase, they bring the previous one back to be allocated with the latest chaser, potentially delaying the response you require by a number of weeks.
 
Can the client chase the lender by telephone?
Yes and it’s faster. The fact is that only you have a direct client relationship with the lender, your lawyer does not have this. You get a different telephone line to call, and as you pay your lender fees, and have that direct relationship, they tend to respond to you faster. If you have a mortgage broker acting on your purchase they can also chase the lender directly on your behalf which achieves a quicker response than your lawyer waiting for a postal reply, as they cannot speak to them by phone.

 

Official Lease - Land Registry

This document is the contract between the landlord and the tenant, the document that will then be passed onto yourself.

 

PIF - Property Information Form

This is a questionnaire about the seller’s property which the seller is duty bound to complete which we will then send to the buyer’s solicitor. It covers such items as guarantees, neighbour disputes and boundaries, planning permissions, occupation and other matters. Failure to disclose information may give rise to the risk of the buyer taking action against you. To help speed up the transaction we send you these out at an early stage in the process. This will speed up our ability to send out an early contract.

 

Post Completion Work

Post completion work is carried out after the completion date. It covers applying for and chasing all relevant documents and ensuring they are dealt with and registered. On a purchase, the Stamp Duty has to be paid, the Certificate collected in, the AP1 Land Registration application lodged to ensure the buyer is registered as the new owner on the deeds, to ensure all this is done within the priority period to avoid fraud risk for the buyer. If there is a lease and mortgage then they also have steps needed to protect the buyer. New deeds have to be collected. On a sale, different work is involved depending on whether there is a lender, such as paying off the mortgage, waiting for a certificate of discharge, lodging this with the buyer.

 

Preliminary Report on Title - Freehold

This document outlines our initial findings on your purchase property and our current understanding of the property.

 

Preliminary Report on Title – Leasehold

This document outlines our initial findings on your purchase property and our current understanding of the property.

 

Prep for Completion Work

There is much work for the lawyers to carry out between exchange and completion. The Law Society Contract used by many conveyancers, provides for a fixed time of 20 working days between exchange and completion to ensure all the work is carried out correctly, i.e. without negligent mistakes, which would otherwise affect both buyer and seller, and risk financial loss. The amount of work will depend on whether there is a lender involved or whether it is a freehold or leasehold transaction.

 

Protocol Forms - Fixtures and Fittings Form

This is a list of items which the seller intends to either leave or remove from the property on completion.

 

Protocol Forms - Leasehold Information Form

This is a form filled out by the seller providing additional information about the Leasehold element of the property such as service charge costs.

 

Protocol Forms - Property Information Form

This is a form filled out by the seller. It is designed as a space for the seller to provide information on the property directly to yourself about a number of things including guarantees, boundaries and utility details.

 

Report on Title - Do I have to read it?

Yes, definitely.
 
Your lawyer will have checked your legal title, to ensure you are able to buy and sell in the future, or mortgage it in between. That means it is capable of being purchased without defective title according to the CML (Council of Mortgage Lenders) standard-whether you have a mortgage or not. However, as an individual buyer (hence why the Report on Title has been sent to you prior to the exchange of contract stage for you to sign off that you have read the report, all documents, and instruct your lawyer to exchange), it is now for you to check whether there is anything within this report which will affect your personal circumstances that you have not made your lawyer aware of and they could not reasonably imply because they have not inspected the property, and those circumstances are personal to you, i.e such as future plans for the property. As soon as you return the report with your signed paperwork, you will be in a position to exchange contracts.

 

Report on Title

The Report on Title is a brief summary of our investigation on the legal title of your property. We only send this when we feel that the legal title you are buying will satisfy the conditions of the CML (Council of Mortgage Lenders standards). It doesn’t matter if you have a current mortgage or not, but it is the minimum we will allow for a report to go out to you, as it is the standard which we know will protect you when you go to sell or remortgage. It refers to things such as restrictions, obligations and rights amongst many other legal parts you should be aware of regarding the legal title you are buying.

Searches - Chancel Search Result

This search looks for any Chancel Repair Liability, a legal obligation on some property owners to pay for certain repairs to a church which may or may not be the local parish church.

 

Searches - Company Search

This search will reveal the company history, including any enforcements against the company or insolvency.

 

Searches - Flooding Search Result

The Flooding search will reveal if your purchase property is at risk of flooding.

 

Searches - Environmental Contamination Result

The Environmental search, also referred to as a Contamination search, reveals if your purchase property is affected by contamination.

Searches - Landmark Energy & Infrastructure Report

This search will reveal if the property you are purchasing is affected by wind turbines, HS2 or fracking, as well as other energy schemes.

 

Searches - Local Authority Search Result

The Local Authority Search will look at all information held by the Local Authority about the property including any planning permissions and building regulations.

 

Searches - Mining Search

This search will reveal any mining areas close to the property, whether historic or not.

 

Searches - Official Coal Authority Report CON29

This search will reveal any coal areas close to the property, whether historic or not.

 

Searches - Planning Search

This search will reveal planning application information about the property.

 

Searches - Water and Drainage Search Result

This search looks at the sewerage supply and water connections to the property.

 

Specific issues on purchase

This document outlines any specific information that we want to bring to your attention and the property you are purchasing, such as any major works or indemnities.

 

Stamp Duty

Stamp Duty is a government tax charged to the buyer only. Unless an exemption applies such as first time buyer, then they are liable to pay the full stamp duty rate.
 
Ask your lawyer to calculate the Stamp Duty tax you need to pay. They should be able to work this out when they send you their quote estimate. It is based on your purchase price. This is a tax form and if you instruct your solicitor to complete this for you then they will have the expertise to do this.
 
Stamp duty varies depending on the value of the property, and the capacity of the buyer. Properties under a certain value are stamp duty exempt, and others over a million pounds pay at the highest rate. If you own more than one property, then you will be liable to additional rate stamp duty tax.
 
Stamp duty becomes payable on completion if you have instructed your lawyer to complete your stamp duty form and make payment. If you are completing your own stamp duty form as buyer, you will need to make payment prior to completion and obtain the stamp duty office SDLT5 certificate of payment for your solicitors to complete and submit your AP1 Land Registry as new owner within the priority period, failing which you risk being attacked by a fraudulent buyer taking illegal ownership.
 
How much do I pay to instruct my lawyer to complete my stamp duty tax form?
It depends on your lawyer. The charge will be contained in their terms. If not, you must ask them. The benefit of them doing this for you is firstly, they take the time to do this and not you (it has some 70 questions listed); secondly, it does have penalty implications if it is incorrectly completed (so by paying your solicitor to do this for you, they, and not you, face the government penalty if they get it wrong).

 

Stamp Duty (SDLT) Declaration

This document allows us to complete the SDLT for you on completion.

 

Survey

Why should I carry out a survey?
As in law when buying a property it is always “sold as seen”. It is for you, as the buyer, to discover any physical defects by inspecting the property and via a survey. At the very least we believe a RICS HomeBuyer Report should be commissioned in the first instance. You have some safeguards if the survey reveals a problem which requires further investigation as pre-exchange you are not bound to purchase the property and you can decide whether to continue with your purchase at all.
 
What is a survey?
This is a report carried out by a surveyor on the physical state of the property you are buying and is different from a mortgage valuation if you are obtaining a mortgage which you cannot rely on. The valuation merely satisfies the lender that the property is of a sufficient value to protect their interest in the loan, therefore not the full value of the property. Do not rely on the mortgage valuation survey, it will not protect you. 
 
Who takes out a survey?
The buyer should instruct a separate independent surveyor to prepare a survey on the the property. The surveyor will give you the choices of survey and explain what each does. These can range from a HomeBuyer Report, to a full structural survey, the latter being more expensive, but more comprehensive. The choice is yours.
 
Who should I instruct to carry out the survey?
This is down to choice. Potentially from the same surveyor who carried out the valuation survey for your lender, or the buyer can instruct someone else they choose or someone the agent may know for the area and particular property being purchased.

 

Survey-Valuation from your lender

This is not a survey as such, it is more a valuation commissioned by your lender to cover their loan only. It will not protect you at all as firstly, not only is the contract with the surveyor and your lender, and not you, but secondly, it does not cover the full market value of your property for example.

 

Survey - Can my lawyer advise on a survey or valuation?

No. It is beyond their expertise. Your lawyer will look at the legal aspects of the property. The survey is about the structural elements of the property and you must both inspect the property and talk to your surveyor about your property, as they too will have inspected it. Don’t forget, instruct your own surveyor and do not rely on the mortgage valuation report.

 

Title Deeds

Our policy is to speed up your transaction. We request title deeds at a very early stage as they are the documents which evidence that the seller actually owns their property. Further, it sets out any rights or obligations that affect the property. Both of these will be required to issue a contract on your behalf and both are required by the buyer before they proceed further. If we act as your solicitors for the dale of your property, our policy is to ask you at a very early stage (so that we can save valuable time) for your title deeds. If you have a mortgage then your bank or building society will normally be holding your title deeds. We will need to know your mortgage account number and the name and address of the lender.

 

TR1 - Transfer Deed

As the buyer’s solicitors this is a document which we prepare and send to the seller. If we are the seller’s solicitor we ensure that the transfer deed has been properly prepared by the buyer. This is a vital document as it passes the ownership of the property from the seller to the buyer. It is dated with the completion date and will be sent to the Land Registry after completion. The Land Registry will use this transfer deed to change their records and show the buyer as the new owner of the property.

 

Transfer - HMLR Land Registry

This is a document relating to the property that may have rights or benefits affecting the property.

 

TR1 - transfer of Land

This is the legal transfer between yourself and the seller.