How long does conveyancing take? How long is a piece of string? The average time betweenagreeing sale and completion is 6 -10 weeks, however there are a number ofpotential hold ups along the way.
Let’s discuss a few: ChainsA “chain” is where the purchase of a property is dependenton the sale of an existing property. At the start of the chain will be a first-timebuyer and at the end someone only selling. Everyone in between will have a saleand a purchase. As a result, there are lots of transactions to co-ordinate. Oneparty cannot exchange until everyone is ready.
Inevitably this causes delays. Mortgages If buying with a mortgage, after the lenders valuation hastaken place and they are satisfied as to all other matters in connectionwith your mortgage application your lender will issue a mortgage offer. Yourlender will send a copy to you and your solicitor together with a list ofinstructions which we will have to comply with. Many mortgages state the bank must be given seven workingdays to release funds.
This means seven working days between exchange andcompletion. If you’re in a chain you must wait for the slowest party! Search delays There are 4 core searches that will need to be ordered.These are Water and Drainage, Environmental, Chancel heck and Local Authority.
We will discuss what each of these mean later in the blog.At this point it is just worth noting that these can be a cause of delay. TheWater, Environmental and Chancel tend to come back within a few days. This isnot a hard and fast rule, but if you’re lucky they will not take too long. Local Authority searches tend to take more time. This isbecause the searches, as you may have guessed, are carried out by the localauthority who have varying backlogs and efficiency. If your unlucky, these cantake up to three weeks- it’s a bit of a lottery. Once the initial searches are received back, in some casesfurther searches are required.
Yes, that means more delays, but it’s betterthan spending your savings on a defective property! Housing/management companies and management packs A housing company is a legal entity which owns real estate,consisting of one or more residential buildings. These are usually onlyrelevant when purchasing leasehold properties. As with Local Authoritysearches, certain housing companies are more efficient than others. Somecompanies have huge backlogs and can take weeks to provide a management pack,while others will take a matter of days. Before exchanging contracts, you will need to obtain amanagement pack from the housing company. The pack contains crucial informationabout the property and can influence your decision whether to go ahead with thepurchase or not. The management pack will be read in conjunction with thelease. Important things your conveyancer will look out for: Service charges- The pack contains info on the servicecharge for the property.
We will look out for increases over a period, anyunusual expenses, or whether there are any arrears. These can be settled on completion.Major works- Are there any upcoming major works, and howmuch will you as tenant have to pay. Examples of works could be roof repairs orlifts refurbishment. All tenants will be obligated to pay a contribution onrequest. Deed of covenant- By entering into a deed of covenant, thenew tenant enters an agreement with the landlord to observe all provisions ofthe lease. Legal defects A common phrase you will hear in conveyancing is “we’rewaiting for the other side”.
This means we have everything in order but cannotproceed until the other side have replied/supplied/ responded to something. Inan ideal world emails would be replied to instantly, documents signed andreturned within a day and phone calls answered. In the busy world ofconveyancing sometimes this is not the case. Sometimes the other party involved will not be able to signdocuments as quickly as you would like. The solicitor may be from a small firmand have a huge workload slowing things down. The fact is when the other side is beingunresponsive all you can do is hassle or “chase” them to provide what’s needed.
The conveyancing process made easy There are four main stages in the conveyancing process:- Pre exchange- Exchange- Completion – Post completion Pre exchange So you’ve identified your property and found a solicitor.What are the next steps? You will be sent client care documents, asking you to confirmyou wish to instruct the firm, provide some basic information about yourselvesand put money on account so the solicitors can get started with ordering titledocuments for the property and searches (if buying). You will then be asked tocome in for ID checks. Very simple so far. This is where the path of the buyer and seller begin tofork.
The buyer’s sols will request a draft contract from the seller’s, alongwith an information form and fixtures and fittings form.Now it is time for the buyer’s solicitors to investigate thetitle. This is the most complex and potentially time consuming stage of the process.The key enquiries are as follows:Searches/Enquiries – Review searches. These will be discussed in moredetail later in the blog. – Are there any restrictive covenants on thetitle? Has the seller breached any terms of the title? In simple terms, a titlemay include a covenant stating- ‘you may not build an extension on thisproperty’. If an extension has been built, the seller will need to provideinsurance in case years down the line you as the occupier are sued for theworks. The same goes for changing windows, rights of way, changes of use etc.
There are many potential pit falls here to be investigated. The enquiries willneed to ensure that the correct planning permissions/ building regulationscertificates/ any other necessary certificate was obtained at the time. Ifthese are not provided the buyer could incur costs in the future.
Insurancepolicies will need to be taken out to cover this. – Review the mortgage offer, are there any specificrequirements from the lender? E.g. “Exchange and completion must occur aminimum of ten working days apart”.
– Check for any charges over the title. Hassomebody taken out a loan in the past and used the property as security for it?Is there an existing mortgage on the property? If there is a charge, a thirdparty will have a legal right to the property up to the amount agreed in thecharge. – Check boiler maintenance/ gas safety checks. Again,certificates will need to be obtained to ensure everything has been checkedrecently and is in working order. Surveys – While these enquiries are ongoing, the buyer(not the buyer’s sol) will arrange mortgage finance and have the propertysurveyed. All buyers should have a survey carried out. You should bewary of relying on your mortgage lender’s survey report because very often theywill have only commissioned a “valuation” and not a full survey. The”valuation” will be limited to advising them that the property is worth themoney they are lending.
Many lenders will not release their surveys. If yourlender gives the option of paying a little more for a full survey (which youwill receive a copy of) we would advise you to take advantage of that offer.Otherwise you should instruct your own independent surveyor to carry out asurvey for you.Unfortunately when enquiries are raised they don’t alwayscome back in one go. Often it involves chasing the other side’s solicitors fordocuments, with replies to enquiries coming in dribs and drabs. It is only onceall enquiries have been responded to and your solicitor is confident allpotential issues have been addressed, will they proceed.
Once mortgage offer, searches and enquiries are allsatisfied, we will request deposit monies (from buyers) in preparation forexchange. ExchangeUnderstandably people are very keen to arrange dates forexchange and completion. These are the final stages. Once these are set you areon the home straight to buying/ selling your property. Once both sides are holding signed contracts and cleareddeposit monies (these can take 3-5 working days to clear via BACS transfer), weare ready to exchange. Your solicitor will phone the other sides solicitors, datethe contracts and transfer your deposit (usually 10% of purchase price) to theother side. It is important to remember once contracts have beenexchanged you are legally bound to complete on the date agreed.
If you fail to complete the transaction on the completiondate interest will be payable to the seller as a result of late completion. Ifyou fail to complete the transaction at all you may lose your deposit and/orfind the seller suing you for their losses. Similarly if the seller fails tocomplete, you can take legal action to recover your losses.
Pre completion Between exchange and completion your solicitor will carryout some final searches to ensure the title is free from any new interestsregistered since the initial title searches. This will ensure the property issuitable insurance for the lenders. If the mortgage deed and transfer have not yet been signedthese will be signed now. You will also a receive a completion statement setting outexactly the amount coming into your account from sale monies/ mortgage advanceand what will be coming out- solicitors fees/ land registry search fees etc. Arrangements will be made for moving into the property. Completion Funds will be transferred from buyer’s solicitors tosellers. As this point you will officially own the new property and keys willbe available for the estate agents on collection.
As previously mentioned, if completion does not take placeby the time appointed in the contract (normally between the hours of 12-2 pm)and the delay is caused by you, the Seller will be entitled to charge youinterest. In addition, you may be charged for their solicitors costs in servingany notices (typically between £75 -£200 plus vat) as a result of latecompletion. Getting ready for completion day Contracts have nearly exchanged and you are waiting for theday of completion- what to do? Leave time between exchange and completion, get yourselftogether. There are things to do and people to see! In most cases it’s best to leave a gap between exchange andcompletion. Here is a guide for things to be getting on with: Get started on general admin and change your addresson the following: · Electricity bill· Royal mail· Phone bill· Credit cards · Doctor · InsuranceGet signed documents back as soon as possible to avoid lastminute stress. Get money in the correct accounts and be ready to go oncompletion day! Not being ready for completion could be a real issue. A breachcould result in being sued by the buyer for additional moving costs. Packing- dothis as soon as possible.
It is important you don’t leave too much to do oncompletion day. Once contracts are exchanged, get packing! If you’re not out ofyour property by 1-2 pm you can’t give vacant possession. This could mean youare liable to pay a penalty as technically you have not fulfilled your side ofthe contract. COMPLY WITH THE CONTRACT- When it comes to fixturesand fittings, do what you agreed! If you agreed vacant possession, leave itEMPTY (and clean). If there’s a fixtures and fittings list- make sure youcomply. Sometimes people think they are being helpful, removing this because itdoesn’t actually work- leaving that because they think it will be useful.
Don’tdo it. Even if you have good intentions it often leads to disputes and thepossibility of being sued for breach of contractual obligations. Keep thingssimple and comply! What do the searches mean? There are a wide variety of searchesthat can be carried out when purchasing a property. These can range fromensuring Crossrail plans won’t affect your property, to ground stability checks.The aim of these searches is to ensure there are no defects with the legaltitle to your property. You don’t want any nasty surprises which require urgentattention and/ or expensive repairs.
The core searches are as follows: Local authoritysearchesLocalAuthority searches look at the information held by the local authority incharge of the property. Local authorities are bound by statute to keep aregister of certain matters. These include any potential plans for orrestrictions on nearby new developments, listed building status or planningpermissions required. They also show whose duty it is to maintain roads andpathways adjoining the property. Local Authority searches usually take thelongest time to return. These can sometimes take up to three weeks. Environmental Search AnEnvironmental search is important as it establishes whether the property isbuilt on or near contaminated land or water.
The reason this type of search isrequired is because many properties are built on land which was previously usedfor industrial purposes, and toxic substances could remain in the ground. Ifthese aren’t uncovered before you purchase the property you could be buying aproperty that is impossible to sell later, or worse, is a health risk. Ifan environmental risk is identified, the buyer will have to decide whether hewishes to instruct environmental consultants to undertake an environmentalsurvey of the land. Water AWater Authority search will establish where your water comes from and whetherthere are any public drains on the property. If the property does not draininto a public sewer, the buyer will be responsible for maintaining the drainsand sewer. The results of this search could also affect any building work youwant to do in the future.Chancel repair search Forhistorical reasons, certain properties in certain parishes could be under anobligation to pay for repairs of the local chancel. Liability can beconsiderable, in certain cases up to £186,000.
The church can insist a propertyowner is liable for repairs even if the liability hasn’t been registered withthe Land Registry. A Chancel Repair search only costs a few pounds and you mayopt to take out Chancel Repair insurance instead, which typically costs around£20.