Conveyancing Explained

Do you think your conveyancing solicitor has been negligent? You think that he’s missed something or has given you incorrect information?

Before going any further, you need to contact your conveyancing solicitor and ask that he explain why. There might be issues that you’re not aware of because they are complex legal issues or standard practice. You need to give the person time to explain before you make a complaint.

If after hearing the full explanation, you’re still not satisfied, then you need to find out who the firm’s Complaints Partner is. Ask for a copy of the firm’s Complaints Procedure and follow it. Unless you do this, you cannot proceed any further and it may be that negotiations can resolve this issue before things become unpleasant.

If the Complaints Partner still doesn’t deal with the issue satisfactorily, then you can contact the Legal Complaints Service for advice. They deal with solicitors’ negligence and will listen to what you and your conveyancing solicitor have to say. If they believe that your solicitor was negligent, then they will order the solicitor to resolve it.

You can contact the Legal Complaints Service (and not the Law Society, who no longer deal with client complaints) at http://www.legalcomplaints.org.uk/home.page.

The most common complaints relate to “poor service” i.e. that you were either given incorrect information or not told something that you should have been, or that you were charged much more than you originally expected without being told in advance. All such issues can be investigated fairly by the Legal Complaints Service, but you must go through the Complaints Procedure first.

Don’t be too quick to make an accusation of solicitor negligence – make sure you have the fullest information first.

As I said in my article, “Want a low cost conveyancing service? Are you sure?“, it’s not necessarily just about finding the lowest conveyancing quote. Conveyancing is an important transaction in your life and you need to make sure it’s done properly. You want someone who gives you a good service, is knowledgeable, keeps you updated and explains things in a way you understand.

Are you going to get this from the cheapest conveyancing company? You might, but on balance of probability, it’s not likely. I would be more inclined to see what I thought of the conveyancing firm when I rang them. Did they seem knowledgeable when you asked them questions? Would they explain what the disbursements were and what the process was? Did they offer to let you have the conveyancing quote in writing so that you can see the breakdown of what they are including for you? If the answer to all these questions is yes, then I think you’ve found your conveyancer, provided the price isn’t astronomical!

Don’t be afraid to ask questions. Do they have online case tracking so you can see how far things have progressed when you want to and not just when they’re open? Do they write to clients via email, speeding up the rate at which you can get information about what’s happening? Can they explain a basic outline of what the process is? How quickly can you see or talk to your conveyancing solicitor direct once you’ve instructed them? All these issues can help you make your decision. Don’t just go on price. If you ring a conveyancing firm and they’re unhelpful when they’re trying to get your business, what will they be like when they’ve actually got it?

Make a considered choice with more information than just the cost!

I know when you read my next sentence, you’re unlikely to be impressed. The old maxim “You get what you pay for” applies to a conveyancing service, just like any other.

I know everyone nowadays wants the cheapest deal and that people think solicitors are grossly overpriced in what they charge for fees. That may be true of some solicitors, I’m sure, but if you actually saw the amount of work that your conveyancing solicitor actually does, then I believe you’d be more agreeable to paying a proper fee and not just using a cheap conveyancing service.

I would expect to pay from £300.00 upwards for a conveyancing solicitor’s fees alone. That being said, for a single transaction freehold purchase, I would not expect to pay more than £500.00 for the solicitors’ fees.

Remember that your conveyancing solicitor’s total quotation will also include third party fees, known as “disbursements”. You need to ask when getting a quote what the solicitor’s actual fee is.

On average, I would estimate that a conveyancing solicitor on a freehold purchase transaction, is likely to send and receive at least 40 letters and telephone calls and would spend at least 2 ½ hours working on your file throughout the whole of the transaction. When you look at the amount of work that should be done, you can see that really, conveyancing solicitors don’t actually charge that much in terms of their fee!

I do understand that people want to save money, I’m no different, but if you want a proper job to be done, then you need to pay a reasonable fee to your conveyancing solicitor and not just pick the cheap conveyancing quote. If your solicitor reduces his price too much, then it’s simply not cost effective for him to spend time on your file making sure everything is done properly and you’re more likely to be passed to an unqualified unsupervised fee earner. Corners can be cut, and you could simply end up with more problems in the future.

Obviously there is nothing wrong with wanting to get a good deal but cheap conveyancing companies are not likely to give you all the information you need about your new house because it takes too much time. Ring around your local solicitors by all means but see my separate article on “What to look for when getting a conveyancing quote” before you decide who to go with.

Many people think that if they bought a property in their maiden name that either, 1: They won’t be able to sell the property until this has been changed or 2. They need a solicitor to get the surname changed. Neither of these is correct!

Regarding point 1;-

If the house is in your maiden name, when your conveyancing solicitor instructed to act on your sale has a look at the deeds, he will see this. He will then ask you to provide your original marriage certificate, take a copy of it and return the original to you. The copy is certified by the conveyancing solicitor as being a “true copy” of the original. When your conveyancing solicitor sends the contracts and Official Copies of the Register (the name for the electronic register of deeds held by the Land Registry since paper title deeds were abolished) to your buyer’s solicitors, he will also send the certified copy of the marriage certificate. This proves to the buyer’s solicitors that you have legally changed your surname and that you are entitled to sign the contract as the owner of the property in that name. It’s that easy!

Regarding point 2:-

All you need to do is send a letter to the Land Registry, explaining that you are now married and supplying your original marriage certificate. If I was doing so, to make sure it gets there, I would send it by recorded delivery. It might also be helpful if you included a stamped addressed envelope for the return of the certificate.

The Land Registry will then update its electronic register and return the certificate to you. Very simple and no need for a solicitor.

The Solicitors’ Disciplinary Tribunal recently found in a case brought to them that solicitors must specify clearly to you when preparing your bill, what they are actually paying out on your behalf for a bank charge and what they are charging for “organising the transfer”. In my view, no admin charge should be made, seeing as the work required is minimal and should form part of the conveyancing process.

If a solicitor is charging you more than the direct cost to them, plus VAT, they must make it clear to you that the excess is a charge by the solicitor and not an expense.

The recent decision by the SDT involved a case in which a firm of solicitors charged clients £30 plus VAT for telegraphic transfers. The actual cost in bank charges to the solicitors was £10 for each TT (a TT or telegraphic transfer is just a same day electronic payment from account to account). The remaining £20 represented profit for the solicitors, to reflect the work they did in organising the transfer; they billed their clients for a “disbursement” of £30, without making it clear how that figure was calculated. It is my view on speaking to clients that many other solicitors, certainly in my area, have done the same.

The SDT found that the solicitors had attempted to deceive their clients. This was a breach of their obligation to act with integrity (under rule 1 of the Code of Conduct to which all solicitors must comply) and of their duty to give clear information about costs (rule 2 C of C). The partners of the firm were fined £1500 each.

The same principle applies to fees for undertaking Money Laundering electronic identification check (EID). Some firms charge their clients more than the EID costs the firm. They cannot do so without making this clear to the client.

If you find yourself in any way unclear regarding disbursements, always bear in mind that you have the right to ask how the figure is calculated and whether it represents exactly the fee charged to the firm by the relevant third party.

Any breach of the Solicitors’ Regulation Authority Code of Conduct is treated very seriously and you would be entitled to make a complaint if you find yourself being deceived in the way described above.

Yet another thing to be aware of regarding solicitors’ costs!

If you are having electrical works undertaken at the property, then you may need an electrical certificate under Part P Building Regulations Electrical Safety January 2005. This depends upon the type of work being undertaken. It can either be issued by a qualified electrician or you can apply for a Building Control Officer from the Council to inspect the work.

A Competent Person is a business that has been adjudged to be sufficiently competent to self-certify that its work complies with Part P of the Building Regulations of England and Wales.

The work must be undertaken by a “Competent Person”, who must be registered with a scheme that has been approved by The Department for Communities and Local Government (DCLG). Schemes authorised by the DCLG are listed on its website at http://www.communities.gov.uk.

Work that need not be certified/notified;-

1. Replacing accessories such as socket-outlets, control switches and ceiling roses.

2. Replacing the cable for a single circuit only where damaged for example by fire, rodent or impact (on condition that the replacement cable has the same current carrying capacity, follows the same route and does not serve more than one sub-circuit through a distribution board).

3. Re-fixing or replacing the enclosures of existing installation components (if the circuit’s protective measures are unaffected).

4. Providing mechanical protection to existing fixed installations (if the circuit’s protective measures and current-carrying capacity of conductors are unaffected by increased thermal insulation).

or

Work that is not in a kitchen or special location (see below) and consists of:

1. Adding lighting points (light fittings and switches) to an existing circuit (only if the existing circuit protective device is suitable and provides protection for the modified circuit and other safety provisions are satisfactory).

2. Adding socket-outlets and fused spurs to an existing ring or radial circuit (only if the existing circuit protective device is suitable and provides protection for the modified circuit and other safety provisions are satisfactory).

3. Installing or upgrading main or supplementary equipotential bonding (such work will comply with other applicable legislation, such as the gas safety regulations).

If any of the above work is undertaken in a special location (below) it must be notified.

Special locations;-

Locations containing a bath tub or shower basin
Swimming pools and paddling pools
Hot air saunas
Electric floor or ceiling heating systems
Garden lighting or power installations
Solar photovoltaic (PV) power supply systems
Small scale generators such as microCHP units
Extra-low voltage lighting installations, other than pre-assembled, CE-marked lighting sets

New installation must be certified / notified although modifications in the following areas are exempt:-

Bedrooms
conservatories
dining rooms
halls
integral garages
landings
lounge
stairways
studies
tv rooms.

Work of any nature in the following must be certified / notified ;-

Bathrooms
Bedrooms containing a shower or basin
Ceiling (over head) heating
Communal areas of flats
Pre-assembled CE marked lights
Garden – lighting and power, greenhouses workshops and sheds
Kitchen
Kitchen diners
Remote buildings
Remote garages
Saunas
Shower rooms
Small scale generators
Solar power systems
Swimming pools
Under floor heating
Extra low voltage (E.L.V.) – under 50v ac

The regulations do not apply to computer and telephone cabling.

Make sure you keep the following items handy;-

Kettle
Milk
Tea/Coffee
Sugar
Cups
Snacks
Bedding/Towels
Scissors
Toiletries
Money
Toilet roll
Light bulbs
Small tool kit
Lighter
Pen & Paper
Items of cutlery/crockery e.g. plates, tin opener, corkscrew, knife, fork, spoon
Keys, car etc.
First Aid Kit
Pet Food
Bottle of Champagne & glasses!

Final Preparations before you leave;-

Defrost the fridge/freezer
Last minute clean-up
Remove all rubbish from the property
Have all personal possessions to hand
Make arrangements for your pets
Get directions to your new property
Check with neighbours that they agree to large removal vans parking outside the properties
Find all keys for doors/window locks etc
Ensure meter readings have been taken
Ensure that all keys have been returned by friends/relatives holding them on your behalf.
Ensure that you leave any instruction/operating manuals

Use the checklist below to ensure that all organisations are aware of your new address;-

Who to Inform;-

Employer

School

Doctor

Dentist

Bank

Electoral Register

Building Society

Credit Card companies

Home/contents insurance company

Mobile phone insurance company

Life insurance company

Pet insurance company

Petlog (if your pet is microchipped)
08706066751

Car insurance company

Share registrars

Rental companies

TV Licensing Authority
08705 246 246

Post Office – mail redirection

Gas company

Water company

Electricity company

Phone company

Satellite/Cable provider

Internet service provider

Inland Revenue

National Insurance Office
0191 213 5000

Council Tax office

Driving Licence Centre (DVLA)
Car registration and driving licence
0870 240 0009

Breakdown assistance

Opticians

Subscriptions (magazines, charities etc)

Mail Order companies

Sports & Social clubs

Pension Companies

Savings/Bonds

Club cards – Boots/Tescos/Sainsburys etc.

Private Healthcare

Library

Milk delivery/Newspapers

Unions

Solicitor holding any deeds/wills

Accountant

Vet

I use this document to send to my clients to explain some of the terms that they might hear during a conveyancing transaction. I hope it will be of help to readers too.

Agreement – Another word for Contract (see below).

Bankruptcy Search – A search made by us to check whether a buyer or a borrower has been, is or is about to be declared bankrupt. This search is always required by the mortgage lender.

Borrower – The person taking out a loan or mortgage on a property that they own, also known as the Mortgagor.

Boundaries – The boundaries define the extent of the property and are usually marked out on the ground by fencing or hedging.  Boundaries are often, although not always, shown on the Land Registry plan.

Chain – These are the property buyers and sellers that link together to make the chain for your particular sale or purchase.  The chain may consist of only two people i.e. you as buyer and the person you are buying from as seller or it may consist of several buyers and sellers.  The beginning of the chain usually starts with a first time buyer or a buyer with nothing to sell and the end of the chain usually ends with a seller who is buying a brand new home or who is not buying another property.  Your sale or purchase can only proceed at the same pace as everyone in the chain, unless someone agrees to break the chain and usually move in with friends or family whilst the rest of the chain catches up. 

Completion Date – This is the date when the purchase becomes final and the Purchase Price is paid by the buyer’s Solicitor to the seller’s Solicitor.  The seller must move out of the property on this date. The keys are released to the buyer and they may move into the property.

Conditions of Sale – The conditions of the sale are detailed in the Contract that the seller’s Solicitor prepares and sends to the buyer’s Solicitor.  There are standard conditions set out by the Law Society, to which the seller’s Solicitor may add any Special Conditions.

Contract – The legal document that confirms the sale/purchase of the property. This is prepared in draft by the seller’s Solicitor and sent to the buyer’s Solicitor.  The buyer’s Solicitor then approves the contract and an identical copy is signed by each of the parties. It is then held by each Solicitor until their client is ready to proceed to exchange contracts.

Conveyancing – The legal description for the work that is done to transfer ownership of a property from one person to another. 

Conveyance – This is the old fashioned name for the document that transfers a property from one person to another.  Conveyances are rarely used nowadays and property is usually transferred by a Transfer Deed.

Covenants/Restrictive Covenants – These are obligations/restrictions that are attached to the property and would be legally binding upon the purchaser of the property, should they decide to proceed.  Think of it as a legally binding promise either to do or not do something. For instance there may be an obligation to maintain a fence or boundary which is a positive covenant. A restrictive covenant would be not to make any alterations or additions to the property without the prior consent of the original developer.

Defective title insurance – A defective title means that there is a problem with the deeds relating to the property. For example they could be missing, destroyed, lost or simply inadequate in terms that rights or restrictions that should appear are missing. A buyer will not usually buy a property with a defective title unless the seller provides him with an indemnity insurance policy to protect him and the mortgage lender against possible financial loss as a result of the defect.

Deposit – There are two types of deposit that you may be asked to produce.  Sometimes the estate agent will ask for a “Goodwill” Deposit to secure the property. You should not pay this deposit without first consulting with your Solicitor.  The second type of deposit is the one which the purchaser will pay to the Solicitor to hand over with the Contract. Traditionally this is 10% of the purchase price but often less than this is accepted and nil deposits can sometimes be agreed.

Disbursements – This means fees that the conveyancing solicitor must pay to other companies on your behalf.  Typically these are indemnity insurance policies, Stamp Duty Land Tax, Land Registry fees and searches. Obviously these payments are separate to fees for dealing with the transaction on your behalf.

Easement – This term means a right given to the property owner over adjoining property or land i.e. a right of way or access, a right to drainage etc. Sellers must disclose all “Latent” Easements but not “Patent” Easements to the buyers.  Latent Easements are those that cannot not be discovered by search or survey, in other words they are not easily found out.  Patent Easements are easements that can be discovered upon inspection or investigation of the property.

Equity – This is the value of the property that is left over taking into account its current worth and deducting from that any mortgages or financial charges outstanding on the property.

Exchange of Contracts – The buyer’s Solicitor and the seller’s Solicitor “Exchange Contracts” on the telephone.  If there is a chain, the solicitors for everybody in the whole chain “exchange contracts” at the same time using a Law Society formula.  Basically this means that they agree verbally that they have a contract signed by their clients and that the terms of each contract are the same. Once contracts are exchanged, the sale/purchase is legally binding on each party to the transaction and the completion date is fixed. At this stage, the deposit is also paid.

Financial Advisor – The Financial Advisor is usually responsible for arranging the mortgage or finance to purchase the property and will often arrange any life insurance, mortgage protection insurance etc.

Freehold – This is the legal term for the way that an owner holds the property.  The other terms are Leasehold and Commonhold.  With freehold land, the owner owns the property/land outright, subject to any mortgages, charges, easements, covenants etc. shown by the deeds.

Gazumping – This is where the seller sells to another buyer for a higher price.  This can only happen before exchange of contracts.

Gazundering – This is where the buyer lowers his offer on the property after agreeing a price.  This can only happen before exchange of contracts.

Ground Rent – This is the annual rent paid to the Landlord, usually on a Leasehold property where there is a long lease.  It can be as little as a peppercorn, the legal equivalent of “nil”. Ground Rents are payable on some freeholds, although this is now rare.

Joint Tenants – Where two or more persons buy a property, they are called joint tenants or tenants in common, whether the property is freehold, commonhold or leasehold. Where a property is held as a joint tenancy, if one owner dies the property passes to the other owner automatically without a Will.  If the property is held as Tenants in Common, each buyer owns their own share of the property which can only be passed on by sale or by a Will. (See my separate article on this for more information.)

Leasehold – A Leasehold property means that the owner does not own the property or land outright.  There is a lease which for a term of years grants the owner the right to occupy the property/land.  There may be a rent or a ground rent to pay to the Landlord.

Lender – The Bank or Building Society who lend money to property owners, sometimes also known as the Mortgagee.

Listed Buildings – Listed Buildings are protected by the Local Authority. Properties that are listed are subject to planning/development restrictions and you will have to obtain special consent to make alterations or additions to the property from the Council.

Management Company – If the property is leasehold, there will often be a management company set up to deal with the day to day running of the property and repairs and renewals.  The management company collect the service charge to pay for their services and for the upkeep and maintenance of the building.

Mortgage Deed – This is the document the borrower signs to agree to the terms set out in the Mortgage Offer.  This document is sent to the Land Registry who register the Mortgage as a Financial Charge on the property which is shown in the Charges Register.

Mortgage Offer – A written offer to lend money on a property.  The Mortgage Offer will contain all the terms of the Loan and the conditions upon which the money is loaned.

Mortgage Valuation Fee – The borrower generally pays a fee to the Lender to have the property valued for mortgage purposes.  This enables the Lender to take a commercial view on whether the property is worth what the borrower says it is and whether it is suitable security for the Mortgage.  The Mortgage Valuer will not necessarily inspect the physical condition of the property and you should always consider at least paying for a Home Buyer’s Report. The valuation report is not undertaken for or to protect you, only the lender’s security.

New Build – Where a property is being purchased for the first time from the Builder or Developer.

Off Plan – Where a property is being bought at the planning stage and is yet to be built. A detailed site map often available for viewing at a site office.

Overriding Interests – Not all matters affecting property are registered or capable of being registered at the Land Registry.  Nonetheless the property is still subject to such matters.

Pre Contract Enquiries – This is a set of questions that is sent to the seller’s Solicitor by the buyer’s Solicitor relating to the property. Typically these questions will consist of enquiries relating to boundaries, easements, persons living at the property etc.

Property Information Forms – These are standard forms completed by the seller giving details about the property.  The form is legally binding on the seller and you should be very careful when completing it. If any of your answers change before exchange of contracts, you must let your conveyancing solicitor know straight away or the buyer could sue you for breach of contract (the replies given in the form effectively are part of the contract).

Redeeming Your Mortgage – When a property owner pays back the mortgage on the property, it is known as “redeeming the mortgage”.  You will first need to get a statement of what is owed which is called a Redemption Statement.  If you are paying the loan back early you may be charged a Early Repayment Fee.

Seller – This is the person selling the property sometimes also known as the Vendor.

Stamp Duty – This is the tax payable on the purchase of a property, based on the purchase price and the annual rent, if applicable.

Stamp Duty Exempt/Disadvantaged area relief – Some types of purchase or transfer of land are exempt from Stamp Duty Land Tax.  The Government has designated certain areas as exempt. 

Subject to Contract – Before Exchange of Contracts (see above) all negotiations relating to the property are subject to contract. This means they are not binding unless contracts are actually exchanged. Your conveyancing solicitor will not exchange contracts on your behalf without your express confirmation that you wish him to do so.

Surveyor – The person who is responsible for surveying the property, who will usually be a member of the Royal Institute of Chartered Surveyors (RICS).

Tenants in Common – See Joint Tenants above.

Transfer Deed – This is the legal document that transfers the legal ownership of the property from the seller to the buyer.

All properties have different tenures. Most are either freehold or leasehold. As a general rule, most houses are freehold and most flats are leasehold, but this is not always the case! If you want to check which tenure your property is, get a copy of the register held at HM Land Registry (see my separate article – How do I get a copy of my deeds?).

The first paragraph under Section A Property Register will say whether the property is freehold or leasehold. If you don’t want to do it this way and you don’t know which it is, your conveyancing solicitor can tell you as soon as they get a copy of the register themselves.

Freehold title generally just means that you own the property outright and everything in it. Leasehold title however means that the freeholder (or landlord) has the primary interest in the property and your interest is secondary to his. A Lease will be in place, which grants certain rights and restrictions on both you and the landlord. Usually, Leasehold title is put in place where there is a block of flats that have common or shared areas that need to be maintained and each flat owner is usually required to pay a contribution to the landlord for the upkeep.

Because Leasehold title is more complicated to deal with in terms of the law, most conveyancing solicitors will charge a higher fee in dealing with it. Only fair really, when you take into account the extra work that they have to do for both you and the mortgage lender, checking that the correct rights and restrictions are in place, how recently the maintenance has been carried out, who is responsible for what, how much you will have to pay for a service charge or ground rent etc. As I say, its a lot more work, and often more complicated.

Unfortunately, every lease is different, although its usual for leases to be granted in similar terms in the same block of flats. This means that it has to be read thoroughly by both you and the conveyancing solicitor. If there is anything that you don’t understand, then you really must make sure that your conveyancing solicitor explains it to you. Very often, you are required to;-

1) Pay a contribution towards the upkeep of the common areas (known as a service charge)
2) Pay an annual fee to the landlord (known as ground rent)
3) Abide by the restrictions in the Lease, usually sensible requirements such as not disturbing your neighbours, not altering or extending the property without the landlord’s permission, keeping the property in a good state of decoration and repair etc.

A managing agent could deal with the property on behalf of the landlord and if this is the case, then it is the agent that you will liaise with rather than the landlord direct. In this circumstance, it is the agent to whom you would make payments of annual ground rent or service charges to.

Bear in mind that the lease might contain clauses that allow the landlord to increase the ground rent by a certain percentage after a certain number of years. Your conveyancing solicitor should check this and tell you if this is the case. The smallest amount of ground rent that you can be required to pay is a peppercorn, because in law, ground rent cannot be nil and a peppercorn is a way of ensuring that it is nil. Obviously, it’s very unlikely that you will be expected to make a payment of a peppercorn to the landlord!

Leases can also be granted for different periods of time, sometimes 99 years, or 999 years. Its important to be aware that if the lease is already in place and you are getting a mortgage, then the lender will require between 20-35 years usually to be left to run on the lease. Even if you’re not getting a mortgage, this can become important when you come to sell the property because your future buyer in 20 years time may be getting a mortgage and the requirement will probably be the same. Therefore, if there is a shorter period of time left on the lease and you don’t intend to move for a number of years, you could be limiting your potential market to those willing and able to accept a small remaining number of years on the lease.

If you want to find out more advice on leases, in addition to your conveyancing solicitor, you can contact;-

The Leasehold Advisory Service (LEASE)
31 Worship Street
London
EC2A 2DX
Tel: 020 7374 5380 Or 0845 345 1993 (9.30am to 3.30pm Monday to Friday)
Fax: 020 7374 5373
E-mail: info@lease-advice.org.uk
Website: www.lease-advice.org.uk

Hope this clarifies a few points for you, if anyone wants further information on this point, please do let me know!