Property (Freehold) - Conveyancing (1) Flashcards
What is an overview of the conveyancing procedure?
Conveyancing Procedure: There are 5 stages to the conveyancing procedure (the transfer of ownership in a freehold or lease). Below is outlined the freehold procedure, but the leasehold procedure is similar.
(1) Pre-Contract Stage: Solicitors take instructions from clients, and draft the contract of sale.
(2) Exchange: Parties exchange contracts, locking themselves into the transaction in the lead up to completion.
(3) Pre-Completion: Parties ensure all documentation is complete and purchase money is in cleared funds.
(4) Completion: Buyer pays the seller, and the sale is completed.
(5) Post-Completion: Both parties finalise administrative requirements, or pursue remedies for delay.
What is the law society protocol?
Law Society Conveyancing Protocol: The LSCP is a set of standard instructions to conveyancers for residential procedures.
(1) Standardisation: The LSCP provides for consistent procedures and standardised documents (TransAction).
(2) Application: Conveyancers who seek membership in the Law Society Conveyancing Quality Scheme must comply with the LSCP and a Client Service Charter, alongside mandatory training and enforcement.
- Effect: Membership of the CQS is a requirement to act for residential mortgage lenders.
What happens in the pre-contract stage of the conveyancing procedure?
Pre-Contract: Both sides give instructions, identify issues, and confirm agreed matters.
(1) Pre-Contract Package: Seller’s solicitor submits pre-contract package to buyer’s solicitor.
- Contents: Bundle of documents including draft contract and evidence of title.
(2) Pre-Contract Searches: Buyer’s solicitor investigates title and conducts further searches and enquiries.
Caveat Emptor: Principle of Caveat Emptor (buyer beware) obliges buyers to make enquiries into burdens over the land - sellers are not obliged to disclose most burdens (but cannot lie).
>Efforts to hide physical defects (i.e. painting over cracks) can amount to tort of wilful deceit.
(3) Energy Performance Certificate: Buyer should obtain an ‘EPC’ (accredited energy assessment of the property).
(4) Pre-Contract Report: Buyer’s solicitor reports to buyer with summary of investigation, mortgage terms, contract terms, and disclaimers as to value and structure.
Draft Contract: The report should necessitate alterations of the draft contract.
What happens in the exchange stage of conveyancing?
Exchange: Once acceptable, parties should sign and exchange the contract, binding themselves to the terms of sale.
(1) Deposit: Deposit is paid by the buyer and held by the seller’s solicitor - usually 10%.
(2) Alternative: Parties may skip this stage, and exchange on completion (inherently risky).
What happens in the pre-completion stage of conveyancing?
Pre-Completion: Following exchange, parties should ensure documentation and purchase money is available.
(1) Draft Deed: Buyer’s solicitor will draft and execute the transfer deed in readiness of completion (unless the seller’s solicitor opts to do it).
(2) Pre-Completion Searches: Buyer’s solicitor will conduct a second search of title, ensuring previous information is correct and providing a period of protection in which to register new ownership.
What happens in the completion stage of concveyancing?
Completion: Buyer’s solicitor pays seller’s solicitor balance of purchase price, deed is completed, and key is exchanged.
What happens in the post-completion stage of conveyancing?
Post-Completion: Both sides finalise all administrative formalities.
(1) Mortgage Discharge: Seller’s solicitor must ensure the seller’s mortgage is paid off and removed from title. They will generally undertake to do so.
(2) Stamp Duty: Buyer’s solicitor should ensure stamp duty/LTT is paid.
(3) Land Registry: Buyer must complete a number of land registry applications.
Proprietorship: Registration of new ownership.
Mortgage: Registration of mortgage.
First Registration: Register any unregistered title (sale is a triggering event).
