Frequently Asked Conveyancing Questions Explained

Frequently Asked Questions

The current rates for stamp duty (as of 25th Match 2012) are as follows:

Property Value (residential only) Stamp Duty Due
£0 to £125,000 0%
£125,001 to £250,000 1%
£250,001 to £500,000 3%
£500,001 to £1,000,000 4%
£1,000,001 to £2,000,000 5%
More than £2,000,001 7%

For property purchased less that the £125,000 there would be no stamp duty payable. Previously up until 24th March 2012 budget, first time buyers were aided to get on the property ladder by not paying stamp duty for any property purchased up to and including the value of £250,000. This represented a significant minimum saving of £1250 to £2500 if the property was between £125,001 to £250,000. Unfortunately this threshold was raised after being in place for 2 years to help first time buyers. The savings were significant enough for struggling first time buyers to allow them to buy their first property.

Conveyancing transactions take a variety of durations depending on the complexity of the transactions as no two transactions are the same therefore it’s impossible to give an exact duration. For a standard purchase of a property, the standard time taken by most conveyancing solicitors is usually 8 to 12 weeks. The purchase of a property occurs in two parts, the exchange of contracts (legal binding from this point forth) and following this completion. Exchange can occur between 4 to 8 weeks into a purchase transaction. Once exchange occurs, a date is set to complete the transaction. The duration between the exchange and the completion is agreed with the clients prior to exchange and can be anywhere from same day to 4 weeks after exchange usually.

For property buyers who are not using a mortgage lender, the conveyancing process can be expatiated considerably. The red tape surrounding lending money against the property would not be necessary and therefore the process can be completed in a matter of weeks as long as there are no issues such as tenant in the property and also if the sellers solicitors are able to cooperate.

Obviously unforeseen circumstances can elongate the conveyancing process as conveyancing is a two way process and both parties (property sellers and property buyers) must agree certain aspects of the property purchase which sometimes is very slow process.

For remortgage conveyancing, the process is entirely different to that of a sale or a purchase of a property. Remortgage conveyancing can be completed within days dependent on your current (if any) mortgage lender and yuor new mortgage lender. If there is no mortgage lender initially, this makes the process even quicker as there is no redemption figure required from anyone. Typically remortgage cases take from 1 to 3 weeks, but usually can completed very quickly.

An indemnity policy is a policy that is taken to deal with a possible defect in the title of a property when purchasing a property. It's a one off fee which covers a specific defect in the title and usually costs from £25 to in excess of £250 depending of the type of policy required and is usually a cost bore by the seller. A indemnity policy pays out if the defect results in a loss. From the start of a conveyancing transaction it's impossible to know whether such as policy is going to be required except in the case of a remortgage. Your solicitor will only usually realise that a indemnity is required upon reading the draft contracts

This depends on the solicitors that you instruct as they each have varying criteria for payment. Usually if you are purchasing a property, upfront money is required to cover the cost of searches. Search packs are usually available for approximately £200.00 and this amount is paid to a third party for the searches. The cost of your property purchase including solicitors fees and disbursements are usually required before completion.

If you are selling your property, usually no upfront money is required by the solicitors. All solicitors fees and disbursements associated with the sale are usually taken from the proceeds of the money coming from the sale of the property. Any estate agent's costs are deducted prior to releasing the balance of funds to you.

There are various conveyancing searches that can be carried out and if a mortgage lender is involved to raise funds for your property purchase, its mandatory for some of the searches to be completed as they (the searches) protect the financial interest of the lender. There are 5 main types of searches as follows:

Local Authority Search
This reveals whether there are any breaches of planning that the council are aware of and also details any history of planning applications associated with the property. This also reveals if there are any proposals for new roads of schemes, tree preservation orders, conversation areas and any other council controlled matters that may affect the property.

Drainage search(also known as a water search)
Drainage search reveals whether the surface water and the foul water drains into a public or private sewer. This is important where there is a blocked drain for instance.

Land Registry Search
This search reveals whether any new mortgage registered against the property have not previously been disclosed. This ensures that there is no mortgage associated with the property prior to completion and take over. This search is carried out just before completion to protect the purchasers’ interest.

Land charge Search
This is the most common search that checks whether you have not been bankrupt. Solicitors are asked to carry out this check by the mortgage lender to protect their interest and make sure that the client hasn't been made bankrupt since the mortgage offer was provided. It is quite usual that you will have to sign a disclaimer to confirm you are not the person shown in any of the search results as this search usually picks up people with the same name that have been bankrupt.

Environmental search
This is a recent search that reveals whether there are any local landfill or waste disposal sites in the area, or if the property itself has been built on a area that previously was a industrial site. The search reveals whether there are risks such as contamination, toxic emissions, flooding and subsidence.

In some instances, time is of the essence and you want to complete as soon as possible to eliminate losing the deal or being gazumped. Any good conveyancing solicitor will advise you not to exchange prior to a mortgage offer being issued. This is because a mortgage offer in the first instance may not be given, or secondly it may contain conditions that you are not able to satisfy thus the money for the purchase of the property would not be available to you. On exchange of contracts, you are legally bound to purchase and there would be legal implications if you could not do so.

When you purchasing a property you have an important decision to make whether to own the property as tenants in common or joint tenants. Standard purchases between couples is that the property is purchased in “joint tenants” so if one member dies, their share is passed to the other member. This method is not suitable in some cases for example if a property was purchased by two friends. They may opt for the property to be purchased in “tenants in common” which means that upon the death of one member, the share of the deceased would be passed to whoever is mentioned in their will or usually their next of kin. Their share is not passed automatically to the other 50% holder.

Arrangement for the pick of the keys from the estate agents or the seller must be made before hand prior to completion. This will ensure that there are no lengthy delays for all parties including any removal men. Please note it is usual for keys to only be available at lunch time so please arrange beforehand regardless of the time of completion being in the morning. Completion funds must be transferred to the sellers solicitors before any keys can be released. Please be patient at this stage as there are sometime delays from the other side solicitors before keys can be released, but your solicitors will endeavour to complete as quickly as possible allowing you to get you the keys as soon as possible.

If you are selling your property, and there is a surplus of unds left after completion most solicitors try to send the surplus to you the same day as completion or at least at the latest the following working day. Usually the surplus is sent in the form of a cheque, unless otherwise requested. Requests for funds to be transferred via bank transfer must be made prior to completion and may involve a charge by the solicitors for this service.

As a general rule this is not possible as money needs to be transferred to complete the purchase of the property and usually the solicitors offices are not open on a Saturday for this to occur.

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