Completion Date
This is the date when legal ownership of the property passes from the Seller to the Buyer. This will also be the "moving date"
We realise that the completion date is very important to both the Buyer and the Seller but if a date is not achievable by the Solicitors, the Mortgage Brokers and other professionals in the chain of transactions then arranging an early date very often leads to disappointment, frustration and upset.
Unfortunately people now appear to have a tendency to try to set dates for completion before the conveyancing process has even begun with their Solicitors and often even before mortgages have been granted or any Searches have been carried out. We must stress that it is counterproductive to try to arrange dates at this early stage since this can cause great problems if matters do take longer than anticipated.
We will endeavour to deal with your matter as quickly as possible but not where this would mean that your matter was not carried out correctly. Although we will always try to meet dates that you wish to aim for you must bear in mind that sometimes these are not possible. If you have a chain with several parties in it the matter can only be completed as quickly as the slowest people in the chain proceed.
Please note that we cannot guarantee any dates agreed before you have checked with us that everyone in the chain is ready to proceed to exchange of contracts. If you make arrangements including removal arrangements, booking holidays or time off work, or serving Notice on your Landlord to give up a tenancy without checking with us first then this could result in disappointment and you having to change your plans at short notice if the date is not achievable.
We would usually expect a transaction to be completed within 6-8 weeks. However if there is no chain or a cash buyer is involved, the matter could be completed much quicker. Conversely, if there is a long chain 10-12 weeks is a more realistic timescale.
Contract
This is the agreement of sale between the buyer and the seller. It sets out the main terms of what has been agreed such as the property, the price and the names of the parties. Two copies of the contract are drawn up and each party signs a copy.
Deposit
Most people class the deposit as the amount they are contributing towards the purchase price themselves. This is usually the difference between the mortgage advance and the purchase price. Upon exchange of contracts a 10% deposit is payable. In many cases Buyers will be borrowing more than 90% of the purchase price and therefore a 10% deposit will not be available. Reduced deposits are therefore usually agreed.
Early Redemption Fee
If you have entered into a fixed interest rate term with your Mortgage Lender and you wish to sell the property before the expiry of the term the Lender may charge an extra fee. We will be informed of this fee in the Redemption Figure.
Exchange of Contracts
Once contracts have been exchanged the transaction becomes legally binding. The Buyer MUST buy and the Seller MUST sell on the completion date stated in the contract. If for any reason this does not happen the defaulting party (usually the Buyer) could lose the 10% deposit and be liable to pay damages to the Seller.
For this reason contracts are not exchanged until all parties in the chain are certain they will be able to complete the transaction on the completion date agreed.
Freehold
If a property is freehold tenure you own the property and the land it stands on.
Indemnity Policies
Occasionally it will not be possible to sufficiently resolve all defects in title. The Seller will therefore usually arrange for an Indemnity Policy to be put in place at his own expense upon completion. If the Seller is not willing to do so it will be necessary for the Buyer to pay for the Policy in order to satisfy the Mortgage Lender's requirements.
Land Registry
This is the Central Body that holds information regarding registered land. If a property is registered the Land Registry will hold copies of all relevant Title Deeds to the property. This information can now be obtained online. If a property is unregistered the paper Title Deeds are still important in order to ascertain ownership pf the property. However it is now compulsory to register all unregistered land following a sale of the property. Unregistered land is therefore becoming much less common.
Leasehold
The property is owned for the period of years stated in the Lease. The ownership of the land remains with the Freeholder. Upon expiry of the term in the Lease the property reverts back to the Freeholder.
Local Search
This is a list of questions about the property, which are sent to the local authority. It covers such items as, whether the road serving the property should be maintained by the council, whether there have been any planning applications on the property, and whether there are any local land charges on the property. If you are purchasing the property with the aid of a mortgage a Local Search is compulsory.
Mortgage
This is a loan to help you buy the house. The mortgage is secured to the property, and means that you cannot sell the property without paying it off at the same time.
We are not authorised to offer any financial advice regarding the mortgage. However we are obliged to ensure you fully understand the terms. Any further assistance should be sought from the Lender or your Financial Advisor.
A mortgage is based on two elements. Whether the lender is prepared to lend the amount of money depending on your financial circumstances, and whether the Lender is prepared to lend the amount of money on the property itself.
Until we are in receipt of a satisfactory mortgage offer we will not be able to exchange contracts.You need to be aware that we will usually also be acting on behalf of the Lender. We therefore need to act in the best interests of the Lender and yourself.
Mortgage Deed
The legal charge of the property to the mortgage lender until such time as the loan is repaid.
Sellers Property Information Form
This is a questionnaire about the property completed by the sellers. It covers such items as guarantees, neighbour disputes and boundaries.
The Seller needs to disclose all information in his possession. If any information is not disclosed it could lead to possible claims for "misrepresentation" by the Buyer.
Redemption Figure
This is the amount required to fully repay the mortgage loan.
Re-Mortgage
A Re-Mortgage is a change of Mortgage Lender, usually in order to release further equity from the property and to borrow increased funds. In some cases your new Mortgage Lender will carry out the Legal work in-house, but this comes at a price! It is invariably cheaper to instruct an independent Solicitor to act on your behalf.
Re-Mortgage is also the term used if you do not currently have a Mortgage on the property but you wish to mortgage the property in order to raise funds.
Stamp Duty Land Tax
This tax on all properties purchased over £125,000. 1% of the purchase price is payable for properties up to £250,000. Between £250,001 and 500,000 3% is payable and over £500,000 4% is payable.Some properties are located in exempt areas for stamp duty.
If the property you wish to purchase is valued between £125,001 and £150,000 we will be able to ascertain the stamp duty liability for you by searching against the postcode.
Survey
This is a report carried out by a surveyor on the physical state of the property you are buying.If you are buying a property you should be aware of the legal principle "Let the Buyer Beware". It is for you, as the buyer, to discover any physical defects by means of inspections and surveys.
Most houses are bought with the assistance of a mortgage and the bank or building society will require a mortgage valuation. However, this is not a survey - it merely ensures that the property is of sufficient value to protect the lender's interest. Our advice is that you should at least have an RICS Homebuyer's Report prepared by a qualified surveyor. This will cost more than a mortgage valuation but it is advisable. It is possible to go one step further and have a full structural survey if required.
Title Deeds
These documents firstly act as evidence that the person selling the property actually owns it, and secondly set out any rights or obligations that affect the property.
The Title Deeds may be stored at your previous Solicitors, with yourselves, or with your Mortgage lender. If your property is registered it is no longer necessary for us to hold the Title Deeds in order to sell the property. Most of the documents we require will be obtainable from the Land Registry. However, in order to save time and expense we would prefer to have the actual Deeds in our possession and pass these on to the Buyer upon completion.
What is a Home Information Pack
The Home Information Pack ( HIP) was introduced by the Government with the aim of improving the home buying and selling process.
HIPs bring together some of the information necessary for the home buying process, at the outset, for both the buyer and seller. This helps all parties to commit more quickly and helps reduce the risk of the sale falling through.
What does a HIP contain
The following compulsory documents must be included in all HIPs and if they are missing, then the index should explain why:
1. The Index of contents
2. An Energy Peformance Certificate (EPC)
3. The Sale Statement
4. The Standard Searches - which are the Local Authority, water and Drainage searches
5. Evidence of Title
6. Leasehold information if appropriate
It is possible to include additional information that may be of interest to a potential buyer - as defined in the regulations - such as a Home Condition Report, environmental or flood risk search.
The HIP is usually supplied both electronically as well as in paper form. It will also ensure that important information about improving the energy efficiency of homes is made available every time a property is sold.
When is a HIP needed
Anyone who "markets" a residential property for sale in England & Wales needs a HIP.
The HIP, including the EPC must be ordered when the property is first placed on the market. The person responsible for marketing the property is responsible for ensuring that there is a HIP in place, failure to do so could result in penalties.
Shelf life of a HIP
The Evidence of Title and searches cannot be more than 3 months old when a property is first marketed, whereas the EPC can be upto a maximum of 12 months.
However, mortgage lenders require searches not to be more than 6 months old at the date of completion, therefore some searches may need to be duplicated if the transaction is unusually drawn out.
What is an Energy Performance Certificate
An EPC is an energy certificate rating for the property. The certificate ranges from A to G, with A being the most efficient, it is similar to the ratings for electronic goods such as washing machines and fridge freezers.
The EPC is produced by an accredited Energy assessor, who visits the property to collate all the relevant information, such as the date, construction and location of the property, heating systems, insulation and windows.
The EPC forms a key part of the HIP, and identifies cost effective improvements to reduce fuel bills and make the property a more attractive prospect.
Blakewater Solicitors
Third Floor - Castleway
Business Centre
49-51 Preston New Rd
Blackburn
Lancashire
BB2 6AE
DX: 17961 Blackburn
Tel: 01254 261515
Fax: 01254 261527
Registered in England
& Wales No. 5930912
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