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Guidelines to solicitors for taking property sale conveyancing instructions

Solicitors’ guide to taking property sale conveyancing instructionsIn this article, we discuss the procedure to be adopted by the conveyancing solicitor when acting for the seller by taking conveyancing instructions.

Full contact details of the sellers and buyers

It is very important that complete details along with the full name and address of all the parties involved in a transaction, should be obtained. This is required to be inserted in the contract and the transfer deed. The term full name includes the person’s middle name, and surname, if any. The name should exactly match as it appears in the birth certificate or passport of the client. The telephone numbers are required to contact the client at any point of time during the conveyancing process. And if the client is a limited company, the address of its registered office, and the registration number should be sought by the conveyancing solicitor. The lawyer should also check if the company’s constitution allows the sale, purchase, mortgage of land or any other transaction, as the case may be.

Name, address, and person to contact at estate agents

When the sale involves an estate agent, details of the agent, viz. his name, address, contact number of the person dealing with the transaction must be obtained.

Name and address of the property to be sold

The name, address and the details of the property to be sold should be obtained by the conveyancing solicitor. This is later inserted in the contract and transfer deed.

Name and address of the other party’s conveyancing solicitors

The name, address, contact details and other information of the other party’s conveyancing solicitor must also be obtained.

Tenure

It should be mentioned in the contract, whether the property is freehold or leasehold. And if the property is leasehold, details such as the terms of the lease should be mentioned in the contract. While the client cannot be expected to know all these details, the title documents shall always reveal this information.

Price

The price at which the property is sold should be expressly mentioned in the contract.

Have the preliminary deposits been made?

While the buyer is not obligated to pay any money until the contract is entered into, sometimes buyers may pay a small amount of money to the seller’s estate agent during the negotiations. This amount should be noted in the seller’s file along with a copy of the receipt of payment. This money should be taken into account when estimating the deposit amount to be paid at a later stage. Such a situation is mostly undertaken when the seller is a builder or a developer selling a new house.

Fixtures and fittings

Clear instructions should be received with respect to the fixtures and fittings that are to remain in the property and the ones that shall be removed. The client is also asked to fill the F& C form. Care should be taken, to check if fittings such as carpet and curtains are also to be included in the terms of sale.

Enquiries of the seller

As mentioned earlier, the seller’s conveyancing solicitor should ask his client to fill the Property Information Form (PIF) so that details such as boundary disputes, covenants and other details can be sought. These details shall come up for enquiry and the seller is expected to answer them.  A conveyancing solicitor who fails in getting the seller to fill the PIF is known to commit professional disservice and can even be accused of negligence.

Anticipated completion date

While a normal transaction takes anywhere from 8 to 10 weeks, it has to be ascertained from the client, the date when he expects the conveyancing process to be over. Sometimes, it may take less time and sometimes, it may take a long period of time.

The present use of property

The information relating to the current use of property should be checked for its authorised use. The property should also be checked for restrictive covenants that may affect the use of the property to ensure that no breach has taken place.

Does the transaction attract VAT?

While most residential properties do not come under the purview of VAT, there are some that do. It is the duty of the conveyancing solicitor to check if VAT would be applicable.

Who is in occupation of the property?

It is important to check who is in occupation of the property. If it is occupied by someone other than the seller, steps have to be taken to ensure that the occupants are vacated on or before the completion of the transaction. If the property is subject to any tenancy, these details should also be obtained and disclosed to the buyer.

Synchronisation

It is very common for a seller to use the funds obtained from the sale of his current property to finance the purchase of another home. It is the duty of the seller to ascertain right at the outset, if such is the case. This is because; the purchase of the new house cannot take place until the sale of the old property. When such a situation occurs, the seller’s conveayancing solicitor should ensure that perfect synchronisation is in place for the two transactions. A failure to ensure this amounts to professional negligence.

Whether any terms have been agreed between the parties

It is very important that the conveyancing solicitor is aware of all the terms that have been mutually agreed upon by both parties. Such terms may have been agreed upon orally or through correspondence. The solicitor should ask his client/s if there are any other terms that have not been discussed during the interview process or have arisen subsequently.

Money

The client should be advised regarding the financial calculation and the cost of the transaction. The client should also be informed if the funds are adequate to fund his existing obligations (if any) such as paying off mortgage, purchase a new house, etc.

Whereabouts of the title deeds and documents

The seller’s conveyancing solicitor should obtain the title deeds of the property to check if the seller is indeed the owner and is authorised to sell the property. This is useful when drafting the contract. Usually the title deed is usually in possession of the seller or an existing lender. Earlier, a land certificate was issued to the owner and this was to be obtained before any registration can commence subsequently. But under the amended Land Regulation Act, no such certificates are issued and the existing ones need not be shown during disposition.

Outstanding mortgages

If there is a mortgage on the property, the seller’s conveyancing solicitor must contact the lender and obtain the title deeds with the help of the mortgage number provided by the client. Earlier, a charge certificate was issued to the lender; this has to be produced before any registration can commence subsequently. But under the amended act, such a charge certificate is done away with. But the lender still has a lot of documents in his possession.  However, it has been an increasing trend for lenders to be unwilling to store such documents and they prefer that it may well be with the client or the client’s previous solicitors.  All mortgages on the property will have to be cleared on sale, and hence the conveyancing solicitor has to ensure that;

  • There are no further charges on the property.
  • And if there are, how many of them are left.
  • The details of the lender.

The amount of money that is outstanding on the loan. The financial implication should also be clearly explained to the client.

Amount of Deposit

The buyer is traditionally expected to deposit a certain sum (around 10% of the total amount) as deposit when the contract is entered into. If it is agreed upon by both parties that a lower deposit is sufficient, the seller’s conveyancer should advise the seller about the consequences of the said decision.

Proceeds of Sale

It is very common for the proceeds of a sale to be used to finance the purchase of another property. In most cases, this is made evident to the seller’s conveyancing solicitor. If such an intention is not made obvious, it is the duty of the solicitor to find out about his client’s intentions with respect to the proceeds of the sale, and make arrangements for the money to be dealt appropriately without delay, or else, he is liable to pay interest on the money to the seller.  If the seller has directed that the money should be deposited into his bank account, the name, address, account number and other relevant details should be sought from the seller.

Capital Gains Tax

Capital Gains Tax is applicable under certain circumstances. If the concerned sale attracts CGT, the same should be informed to the seller at the earliest available opportunity. The fact that the property is liable for CGT may affect the financial viability of the sale and even influence the seller’s decision to sell the property.

Photo courtesy: lrargerich

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