Conveyancing is the legal
transfer process of property from one party to another. The key stages are the
exchange of contracts and the sale completion, between which there is much
legal and administrative work to do before both parties can exchange contracts.
While the conveyancing
process is similar for each buying/selling transaction, each transaction will
be different, so while the conveyancing solicitors in the property
buying/selling chain carry out similar legal and administrative tasks, it can
be stressful due to time and money pressures.
When obtaining a mortgage, a
Conveyancer acts on behalf of the buyer and the lender. Before the lender can
request funds, all the lender’s conditions in the mortgage offer must be met.
Therefore, buyers must check their mortgage offer and ensure that all mortgage
conditions are met before completing the property transaction.
A conveyancing solicitor is
fully trained in legal services but specialises in conveyancing. In contrast, a
licensed conveyancer is trained in conveyancing only, and solicitors and
conveyancers are subject to different governing bodies:
- Solicitors in the UK are regulated
by the Solicitors Regulation Authority (SRA). They are required to be
members of the Law Society.
- Conveyancers are registered with
and regulated by the Council for Licensed Conveyancers (CLC). Licensed
conveyancers can also work for a solicitor’s organisation but would be
regulated by the SRA.
The critical stages of the
conveyancing process will include the following:
Stage 1: Instruction: Once the parties have
informed their Conveyancer of the transaction details, the Conveyancer will
confirm the instructions in a letter and provide an estimate of costs. The
person instructing the Conveyancer will need to:
- Sign the initial letter of
instruction
- Provide proof of identification
- Show evidence of where the funds to
purchase are coming from
- Deposit money into the account to
cover the cost of any third-party disbursements.
Stage 2: Production of
Contract: The party selling the property will be asked to complete the
following:
- A property information form
- Fittings and contents form
- If the property is leasehold, a
leasehold information and property management form
The above documents form
part of the ‘contract papers’ and provide vital information directly from the
party selling the property about the property to be sold. The papers will
contain evidence from the Land Registry that the party selling the property is
the legal owner and has the right to sell it.
A draft property sales
contract will be drawn from the forms and information compiled, detailing the
terms and conditions of the sale.
Stage 3: Local Searches and
Funds:
Following receipt of the contract papers from Stage 2, the Conveyancer will
examine the information supplied and raise any pre-contract enquiries that need
to be raised from the party selling the property, which may include searches on
the contract, title, and the property itself.
The party selling the
property will have to provide adequate replies to these enquiries before the
sale of the property can proceed. Acting on behalf of the buyer, the
Conveyancer will request property searches from the following:
- Local Authority
- Water Company
- Environmental Agency
- Any other relevant local
authorities
Following receipt of the
search results, further enquiries may then have to be made. The buyer will
arrange for a qualified surveyor to survey the property. Further questions may
be raised about any issues that arise from the report, which may be sent to the
party selling the property.
If applicable, the property
buyer will make any final arrangements for a mortgage and inform their
Conveyancer of the mortgage details.
Stage 4: Reporting and
Contract Signing: Once the buyer's Conveyancer is satisfied that Stage 3 is
complete, the Conveyancer can advise the buyer, using their conveyancing
skills, knowledge and experience concerning the property and its title being
offered and the transaction.
If the property is
leasehold, the reporting stage may take longer because the lease terms must be
reported and can be complex. The buyer will need to ensure that they are happy
with the report and raise any further enquiries that they may have following their
review of the lease.
The buyers and the selling
parties’ Conveyancers will arrange for the buying and selling parties to sign
the Property Transaction Contract and agree on a property transaction
completion date.
Stage 5: Exchange of
Contracts: Upon receipt of each other’s signed contracts and the buyer
supplying their deposit, the contracts will be formally exchanged to complete
on the agreed date.
Stage 6: Completion (time
agreed by parties): At a time agreed by both the buying and selling parties, monies
will be transferred from the buyer to the seller's Conveyancer, signalling the
end of the transaction and the release of the property’s keys to the buyer.
This is usually within two weeks following the exchange of contracts to allow
for funds to be provided and mortgage advances to be obtained.
The differences between the
Solicitors Regulation Authority and the Council for Licensed Conveyancers are
likely to have little impact on the buyer or seller of a property, as both
regulators exist to ensure high standards and protect the public. However,
solicitors are forbidden from acting for both sides of any property transaction
for any legal issue(s) without informing the buyer and seller, which is known
as a conflict of interest when it occurs.
Conveyancers, however, are
technically allowed to act for both the buyer and the seller in a transaction,
which may not be ideal. Using a separate Conveyancer for the other party in a
property transaction ensures that whoever is dealing with the buying or selling
party's case is doing so with their best interests at the forefront of their
priority.
Additional articles can be
found at Business Law Made Easy. This site looks at business
legislation to assist organisations and people in increasing the quality,
efficiency, and effectiveness of their product and service supply to the
customers' delight. ©️ Business Law Made Easy. All rights reserved.
