Frequently asked questions about Conveyancing
1. Do I need to pay for a survey on my new house?
A valuation will usually be carried out by your lender however this is primarily to compare the amount that they are lending on the property to its actual value and is solely for the lender's benefit. It would be prudent to have your own survey carried out or to elect for the option given by most mortgage companies for a more detailed survey report to be carried out both for your benefit as well as for theirs.
If you have any queries in this respect then you should enquire of your lenders, or your mortgage broker as to the nature of the survey/valuation that the mortgage company has carried out and whether it is one upon which you can safely rely. If you are not obtaining a mortgage then you are still strongly advised to have a survey carried out.
2. Who is responsible for arranging the buildings insurance?
If you are borrowing some or all the funds for the purchase of a property then unless you have arranged with the mortgagees to deal with the building insurance yourself, they will usually ensure that the property is put on risk under their 'block policy', at your expense.
You should check this with the lender from exchange of contracts, which is when the insurance risk normally passes to the purchaser, if however, you are purchasing the property entirely from your own funds, or you are arranging your own insurance in any event, you must ensure that you have arranged a building insurance policy which can be put in force immediately upon exchange of contracts.
If the property is leasehold then you must take note of the terms of the lease, whether it is the obligation of the Landlord or the Tenant to insure the property. If it is to be the Landlord, you must make sure that your lender is aware of the situation.
Please also note that buildings insurance will only cover the actual structure of the building and not the contents of the property, ie your personal belongings, so you should take out contents insurance as well in all cases.
3. What is the meaning of Joint Tenants and Tenants in Common?
When land is owned jointly by two or more people their legal interests can be held in two different ways:
The legal effect of this is that the co-owners share of the property is equal throughout their ownership and on the death of one of the co-owners, their share passes automatically to the survivor(s). When the property is sold, generally speaking, each co-owner is entitled to an equal share of the net sale proceeds irrespective of the amount of their contribution to the purchase price.
Tenants in common
The legal effect of this is that the co-owners share in the property is notionally divided from the outset. On the death of one of the co-owners their share passes into their estate and is disposed of either under the terms of that owners Will or if no Will has been made, the Intestacy Rules.
When the property is sold the co-owners share is normally divided, in default of agreement, either in the proportion stated in the purchase deed or in the proportion that has been contributed to the purchase thereof. In the event of a dispute evidence of this contribution would have to be produced to the Court in order to prove the amount of that co-owners share of the property.
If you are buying the property jointly, then you must advise us whether you wish to purchase the property as either joint tenants or tenants in common and, if the latter case, in what shares.
4. What happens if I cannot pay my mortgage?
Mortgage companies are most concerned to ensure that you fully appreciate that if you default on your mortgage payments, that they are entitled to repossess the property (ie evict you and your family from it) and then sell the property for the best price they can reasonably obtain. If there is any shortfall between the sale price of the property and the outstanding mortgage, they can recover the balance from you through the Courts.
5. My children aged 19 and 21 still live with the family. Will this be a problem?
If you are purchasing a property with mortgage finance and there will be adult occupiers (defined as persons of 17 years or more and does include your children) residing at the property with you, then they will have to sign an Occupancy Form/ Waiver Form in the format supplied by the mortgagees.
The purpose of this form is to ensure that any rights that the occupier has at present or in the future or any interests they have as an occupier in the property will be postponed and made subject to the rights and interests of the mortgage company under the terms of its mortgage deed.
The occupier would also not be able to make any claim against the mortgage company under any such rights or interests, and in the event of the borrower not paying the mortgage payments and the mortgagees repossessing the property, the occupier will have no right to remain in the property as they are 'waived' by the Occupancy Form/ Waiver Form.
All adult occupiers should seek independent legal advice on this point, especially if they are making a contribution to the purchase price.
6. Can I withdraw from selling or buying a property?
The contract is the document which commits you to the transaction (once exchange has taken place). Each party signs an identical copy of the contract and these are literally exchanged by the respective solicitors, so that each party has written evidence of the other party's commitment to the transaction. The contract also contains all of the terms of the agreement and incorportates the replies to the Enquiries and the Fixtures and Fittings List.
Once contracts are exchanged you are bound by the Contract Terms and cannot pull out of the transaction.
If you were to pull out after exchange has taken place you would forfeit the deposit and in the case that you had paid a deposit of less than 10%, the seller would be entitled to the full 10% plus damages as per the terms of the contract.
7. When can I move into my new house?
Normally the sale/purchase of a house will take approximately 6-8 weeks to complete although this will often depend on the number of properties involved in the chain.
When contracts are exchanged a date is fixed for completion of the transaction. This is the date that you actually receive the keys to the property; the seller vacates and you can move in. You should however note that most conveyancing transactions do not complete until around lunchtime i.e. about 12.30 - 1.00 pm, this is due to the time taken by the Banks to transfer the funds from the Buyers solicitors to the Sellers solicitors. We are in their hands in relation to the timing and cannot guarantee any specific time that you will be able to collect the keys and you should bear this in mind when organising yourself on the day of completion.
8. Why do I have to provide proof of my identification to my solicitor?
The Law Society released guidance on money laundering in January 2004. The guidance takes into account the changes introduced by Money Laundering Regulations 2003 which came into effect on 1 March 2004. For the first time the regulations extend to conveyancing and they require solicitors to obtain satisfactory evidence of their client's identity.
9. What is a disbursement?
In carrying out an investigation of the title to a property we must make all usual and necessary searches and enquiries to enable us to certify to a mortgage lender that the title is good and marketable. The type of search to be carried out will vary depending on the particular type of property and its location e.g. if the property is situated in a coal mining area a coal mining search will be required.
These are the more common type of searches made when buying a property:
- Local Authority Search
- Drainage Search
- Environmental Search
- Land Charges Search
- Land Registry Search