Moving Home - The Legal Process
For England & Wales
Buying or selling your home has been likened
to death or divorce: It can be a stressful experience. But a problem
shared is a problem halved. We will help you through the process.
We will liaise with your solicitor to ensure as little hassle as
possible. If you are selling, we will undertake the marketing and
use our best endeavours to suit your requirements by introducing
a suitable purchaser at the best possible price. If you are purchasing,
we can match you to our wide range of properties on which we are
instructed. In either case, your solicitor or licensed conveyancer
will ensure that all the legal requirements are met and you are
selling, or purchasing, in accordance with your instructions.
To the uninitiated, the legal process can be
a minefield. First and foremost it is essential to understand that
the sale or purchase of land is fundamentally different from buying
or selling anything else. If you agree upon a price to buy or sell
a motor vehicle, but then change your mind, you can be sued for
breach of a verbal contract. This does not apply to land. For over
three hundred years, since the Statute of Frauds in 1677, the law
requires that the sale or purchase of land shall be in writing,
signed and contain all the important terms. So any offer made, and
any acceptance of that offer, which is in writing, should always
be endorsed with the magic words “subject to contract”,
to avoid either party being bound. If those words are not used,
then an exchange of letters could be sufficient to bind both parties.
To avoid that situation, it is better never to put anything in writing.
Along with your conveyancer we will ensure you are not bound in
contract by writing the necessary letter at the right time. If,
for any reason, it is essential to put your verbal agreement in
writing, the note should be worded “I confirm that, subject
to contract and survey, I am prepared to buy (address of property)
for a price of £XYZ”. The reason for adding ‘subject
to survey’ is to further limit your offer to a survey which
is satisfactory to you. If you are selling, the wording would be
“I confirm that, subject to contract, I am prepared to accept
your offer of £XYZ to buy (address of property)”.
At this stage there may still be negotiations
to be concluded. For example, does the agreement include, or exclude,
furnishings and fittings? By this is meant any of the moveables
that may be taken from the property without damage to the structure
- “chattels” in legal terminology. Misunderstandings
are very common and should be dealt with at the outset. Carpets
and curtains are the most common chattels. They can be excluded,
or included, in the price. And so can other items. It should be
remembered that the legal definition of “chattels” is
“personal property”. Often, a description of the property
will include (or exclude) “fixtures and fittings”. This
can be a trap for the unwary buyer or seller. As stated, in law,
a “fixture” is something adherent to the property which
cannot be removed without damage to the structure. For example,
a hob which is part of a fitted kitchen. As such, it is part of
the property and the seller has no right to remove it. Unless the
contract expressly makes reference to this item being excluded from
the sale, it cannot be removed. It adheres to the property and is,
in law, an immovable. The same can be said for plants and shrubs
in the garden, although light fittings may generally be removed
without damage to the ceiling.
To avoid delay, expense and uncertainty, it is
far better to spell out what exactly can be taken and what cannot.
With the increase in Stamp Duty, especially at the stepped rates,
it is now common for the asking price to exclude “fixtures
and fittings” to avoid falling into the higher duty band.
A separate contract and price is then concluded for these excluded
items, additional to the purchase price of the property. Just be
certain, at the very beginning, as to what is, and what is not,
When all is agreed in principle, the seller‘s
solicitor will prepare a draft contract to send to the purchaser‘s
solicitor for approval or suggested amendments. This is because
only the seller knows what title he can give; whether freehold or
leasehold and including any documents or events, such as the death
of the original owner and probate of the will vesting ownership
in the seller plus any encumbrances (easements) against the title,
such as rights of way. The best evidence of title is, of course,
the title deeds or lease and these may be handed to your conveyancer
or, if the property is mortgaged, obtained from the lending source.
The last statement from your mortgage provider will be a great help.
If the title is registered, your conveyancer will need to know the
title number so s/he can obtain all the necessary information from
the Land Registry.
At this stage, when the sale or purchase is still
going through the initial preparatory procedure, either side may
withdraw without liability and can do so right up until contracts
are exchanged. Often, with rising prices and the inherent delay
built in to the system, “gazumping” may occur. This
happens when the seller accepts a higher offer than the one already
agreed. Note that the seller has previously agreed a sale verbally
and then reneges on that agreement enticed by the higher amount.
The word “gazump” derives from the Yiddish word “to
cheat”. It does not mean that the seller is unable to cast
around for the best bid; it only occurs when he has already agreed
to sell at a definite price, but “subject to contract”.
There is little that can be effectively done to stop the practice,
as the seller is legally entitled to proceed with the best offer.
The purchaser can, when the offer is accepted, ask the seller to
agree, in writing, to treat with him alone for a specific period,
to allow the purchaser to conclude his enquiries and exchange contracts.
But the seller will rarely agree to disadvantage himself, especially
when the purchaser may still pull out with no liability whatsoever.
After receiving the draft contract from the “sellers”
solicitor, the “purchasers” conveyancer will send a
long list of printed preliminary enquiries in return covering virtually
everything that needs to be known about the property, including
insurance, guarantees, disputes, any unusual charges and, if not
already agreed, whether the seller intends to remove those fixtures,
fittings, plants, aerial, burglar alarm, telephone, etc. He will
also send off an official search, with a printed list of further
enquiries, to the local authority to see, for example, if the property
is subject to any local land charge or any adverse entries; how
drainage is connected, what building or other development has been
granted, proposed roads, compulsory purchase or mining activities
past, present or future.
Once all these enquiries and searches are complete and satisfactory,
the “purchasers” conveyancer will ensure that financial
arrangements, such as the mortgage offer, are in place so that the
purchase price can be paid on completion, with the date proposed
inserted in the draft contract. At this stage, the deposit, normally
10% of the purchase price, is forwarded to the “sellers”
solicitor. If the mortgage advance is more than 90%, the balance
is normally sent. The purchaser signs the contract which is sent
with the deposit.
The “sellers” solicitor will ensure
his client is ready to be committed. If so, a contract in identical
terms is signed and exchanged with the purchaser. Both parties are
now legally bound and neither can back out, without consent of the
other, as there would be a breach of contract.
The next step is for the “sellers”
solicitor to send proof of ownership of the property, normally the
lease or title deeds. The “purchasers” conveyancer will
check ownership and that it may be transferred to the “purchaser”
in terms of the contract, ensuring there is no undisclosed mortgage
and the seller is not bankrupt. S/he will then prepare a Transfer
Deed or Conveyance, to transfer ownership to the purchaser, signed
by the purchaser and sent to the “sellers” solicitor
for signature by the seller and return. Normally, prior to completion,
the purchaser will receive a statement of account from his conveyancer
setting out the financial position, taking into account any pre-contract
deposit paid to the estate agent and the deposit paid on exchange.
On the day agreed for completion, the balance of the purchase price
is paid to the “sellers” solicitor, normally electronically.
The keys will then be released to the purchaser who becomes liable
for the Council Tax and all other outgoings from that date.
Even with the best preparation, there are delays
inherent in the system which ensures that each side has the bargain
they agreed, without any hidden liability surfacing after completion.
Selling normally entails another purchase at the same time. Conversely,
your purchaser, unless a first time buyer, is trying to sell and
cannot exchange until his own property has been sold to provide
the purchase money and/or a mortgage has been obtained. Apart from
delays in searches and enquiries, being involved in a chain of transactions
means you can only move at the speed of the slowest link in the
chain. We will do everything we can to smooth out the delays that
inevitably occur. Your solicitor/conveyancer will do their utmost
to keep you informed of progress. But always ask them the reason
for delay; they are there to help and keep you fully informed.
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