House Conveyancing Scotland
The process of conveyancing when buying or selling a residential property in Scotland shares similarities with England and Wales in its goal of legally transferring ownership. However, there are some notable differences in the procedures, terminology and timescales involved which those south of the border may be less familiar with.
Under Scots Law, the system operates on a ‘seller beware’ basis with buyers having far less opportunity for legal recourse once the transaction is completed. The process is therefore weighted towards protecting the buyer over the seller.
In this comprehensive guide, we’ll examine how the conveyancing process works in Scotland looking at areas like:
- Key stages and terminology
- Typical timescales
- Roles of solicitors and estate agents
- The offer system
- Searches and surveys
- Mortgages and funds
- The closing date
- Settlement and Registration
- Tax and fees
- Key differences from England/Wales
Understanding the unique aspects of Scottish house conveyancing as either a buyer or seller provides important insights into what to expect from the legal process north of the border.
Overview of the Scottish Conveyancing Process
While processes vary between firms, outlined below are the typical key stages of the conveyancing process in Scotland:
- A buyer makes an offer via their solicitor which the seller can accept, reject or counter.
- Once agreed, missives are drawn up mapping out terms and conditions.
- The seller provides evidence of Title, tenure and a Property Questionnaire response.
- Arrangements are made for surveys, valuations and searches.
- A formal offer letter is sent by the buyer’s solicitor.
- Both parties work towards a final accepted offer and negotiated missives.
- The buyer arranges a mortgage valuation and offers if required.
- A closing date is set for the transaction to be completed.
- Funds are transferred and documents are signed on the completion date.
- The buyer’s solicitor registers the change of ownership.
In Scotland, solicitors play a central role in negotiating offers, missives and the closing date. The system provides a minimal opportunity to renegotiate after missives are concluded.
The language and terminology around Scottish conveyancing has some unique elements, including:
- Disposition – The main legal document transferring the title of the property from seller to buyer.
- Missives – The sale contract includes terms, conditions and price. This is binding once concluded.
- Conclusion of missives – The point both parties are legally committed to the transaction.
- Offer letter – Formal offer set out in writing by the buyer’s solicitor.
- Notes of sale/interest – A record showing the buyer’s interest in the property that is registered.
- Closing date – The agreed date for legally completing the sale.
- Settlement – The completion. When funds are paid and ownership transferred.
- Standard security – Equivalent to a mortgage deed in England/Wales.
- Property Questionnaire – Required form disclosing known property defects.
- Disposition – The legal document that transfers ownership to the buyer.
Being familiar with the phraseology used in Scottish conveyancing provides a clearer understanding.
How the Offer Process Works
In Scotland, the offer process is facilitated via solicitors and usually follows these steps:
- The buyer instructs their solicitor on their offer price and conditions.
- The solicitor contacts the seller’s solicitor to submit the formal offer in writing.
- The seller can accept, reject or counteroffer through their solicitor.
- If accepted, the buyer pays a deposit and missives are drafted up.
- Both solicitors work together to conclude missives.
- The offer is legally binding at the point missives are concluded.
- The buyer arranges a survey and mortgage finance if needed.
- A closing date is agreed between solicitors for settlement.
- The seller cannot accept other offers or renegotiate once missives are concluded.
Scotland does not have the ‘subject to contract’ stage common in England and Wales. Once missives are agreed upon, the house buyer reserves the right to pull out only if something in the Property Questionnaire was not disclosed.
The Scottish system places heavy emphasis on concluding missives, after which the buyer has security the transaction will be completed on the closing date. For sellers, limited scope exists to re-open negotiations or attract better offers once missives are agreed.
Typical Timescales in Scotland
Scottish property transactions typically take around 8-12 weeks from the point an offer is agreed upon and missives concluded to the final settlement.
However, timescales depend on factors like mortgage lenders, chains and the availability of surveys. Scottish transactions can take longer than England and Wales due to stricter procedures around concluding missives before progressing further.
What Role Does The Estate Agent Play?
Estate agents have a much-reduced role compared to England and Wales. Their involvement is typically limited to:
- Recommending solicitors to buyers and sellers if asked
- Promoting and marketing the property
- Arranging viewings and passing on feedback
- Fielding initial questions on the property
- Reporting offers to the seller’s solicitor
- Recommending surveyors if asked
Crucially the estate agent is not involved in negotiating offers or conveyancing. Their role is limited by law, with solicitors taking charge of the transaction itself.
However, sellers should still choose their agent carefully to ensure maximum visibility of the listing through competent marketing and buyer matching. But the legal process rests with solicitors.
Use of Home Reports
Home Reports are used widely by sellers in Scotland when marketing a property. These include:
- A Single Survey – This combines a valuation with a condition report on the property.
- An Energy Performance Certificate – detailing energy efficiency rating.
- A Property Questionnaire – Disclosing known issues and defects.
Home Reports speed up the buying process by allowing buyers early visibility of property conditions and valuations. Conveyancers also still arrange more detailed surveys for buyers later on.
Standard Conveyancing Searches in Scotland
The buyer’s solicitor will typically arrange a standard suite of property searches, including:
- Registers of Scotland – checking title deeds, planning docs
- Local Authority – past planning permissions, building control
- Chancel Repair – checking for liability to pay church charges
- Coal Authority – checking former mining activity for subsidence risks
- Conservation area – any restrictions that may apply
- Contaminated Land – risks of land pollution
The seller pays for the searches, as is standard in England/Wales. Results help identify any issues the buyer may wish to consider.
Property Surveys in Scotland
The buyer’s solicitor will arrange a physical survey of the property, either a:
- RICS Homebuyer Survey – standard survey suitable for most properties.
- Full Structural Survey – for larger, older or non-standard construction.
These are more detailed than the Single Survey within Home Reports. The survey inspects for defects and highlights repairs needed, feeding into offer prices.
Mortgages and Finance
Most Scottish buyers will require a mortgage to purchase. Typical steps include:
- Mortgage Agreement in Principle – obtained before making an offer via a broker.
- Full mortgage application – submitted once the offer is agreed.
- Valuation – the lender will survey the property to confirm the value.
- Mortgage offer – a formal loan offer will be issued by the lender.
- Funds released – on settlement day, the lender transfers mortgage funds to the solicitor.
Mortgage offers are often needed around 4 weeks before the closing date, so the application process can dictate timeframes.
The Role of Solicitors in Scotland
Solicitors take an active role throughout the conveyancing process including:
- Officially submitting the buyer’s offer in writing
- Negotiating missives and terms on behalf of clients
- Requesting title deeds and Property Questionnaire from seller
- Carrying out conveyancing searches and checks
- Securing mortgage finance and survey for buyer
- Progressing the transaction to a binding conclusion of missives
- Agreeing a closing settlement date for completion
- Exchanging final documents and monies on settlement day
- Registering the change of ownership
As specialists in property law, solicitors guide clients through the complexities to ensure a legally valid transfer.
Settlement Procedures in Scotland
On the closing settlement date, the buyer’s solicitor will transfer the full purchase price to the seller’s solicitor, while the seller’s solicitor arranges to repay any existing mortgage over the property and pays estate agent fees.
Once funds are transferred and the mortgage repaid, the seller’s solicitor will authorise the release of keys to the buyer. The buyer’s solicitor will then register the buyer as the new owner.
Stamp duty and registration dues are deducted from funds on settlement day before the seller receives the net sale proceeds.
Why is it Called the Closing Date?
The use of ‘closing date’ terminology reflects the fact that on this date, the transaction is closed legally with ownership transferring. It stems from the binding nature of concluded missives under Scots Law.
After this closing settlement date, no further negotiations or amendments can be made. The buyer is also liable for the property from this point even before registration.
Differences Between England and Scotland Conveyancing
While having the common aim of transferring legal title, key differences between Scottish and English conveyancing include:
- Buyer offers made directly through solicitors in Scotland
- No gazumping once missives are concluded
- Closing date used instead of completion
- Significantly fewer sales fall through
- Greater protection for buyers once missives agreed
- More flexibility before the exchange of contracts south of the border
- Home Reports used more extensively in Scotland
- Mortgage offers needed earlier in Scotland
- More limited role for estate agents in Scotland
- Seller legally liable on closing date in Scotland
Though sharing fundamental principles, nuances in the Scottish system affect timescales, terminology, flexibility and legalities for buyers and sellers.
Why Scottish Conveyancing Favours Buyers
The Scottish conveyancing system of concluding binding missives relatively early in transactions creates a buyer-friendly model where:
- Buyers gain security once missives are agreed, with limited seller power to withdraw or renegotiate.
- Buyers have longer opportunities to conduct surveys and secure finance before committing legally.
- Buyers can pull out if issues in the Property Questionnaire are undisclosed.
- Buyers become legally responsible for the property only on the closing date.
- Buyers are legally protected against gazumping once missives are signed.
For sellers, this means accepting an offer is virtually binding with no going back. Buyer’s interests are put first in Scottish transactions for a smooth purchase journey.
Pitfalls of DIY Conveyancing in Scotland
Due to the complexities, DIY conveyancing is not recommended for buyers or sellers in Scotland. Risks include:
- Missives not being appropriately concluded
- Errors in key legal documentation
- Failure to spot and address title issues
- Mortgage lenders may reject DIY applications
- Lack of expertise in negotiating terms
- Not conducting full legal searches/checks
- Inability to interpret completely search results
- The registration process incorrectly followed
Mistakes could invalidate the transaction, lead to financial loss or leave buyers unable to secure finance. Engaging a solicitor provides necessary legal safeguards.
Concluding Thoughts on Scottish Conveyancing
While legal title transfers fundamentally operate in a similar fashion across the UK, nuances of the Scottish conveyancing process affect the procedures, documents and terminology involved.
Understanding key differences around concluding missives, the offer process, legal commitments, closing dates and the role of estate agents ensures smoother transactions for those unfamiliar with Scots Law.
Solicitors skilled in property transactions remain essential in guiding both buyers and sellers through the conveyancing complexities and legal commitments unique to Scotland.
Conveyancing procedures in Scotland share the same essential goal as in England and Wales of legally transferring property ownership from seller to buyer. However, notable procedural and terminological distinctions exist under the Scottish legal system.
Binding missives are concluded much earlier, buyers gain greater security once committed, and flexibility for sellers is reduced versus south of the border. Closing dates rather than completion are used, estate agents have minimal involvement, and home reports provide property insights upfront.
Understanding these key nuances by engaging an expert Scottish property solicitor ensures buyers and sellers undertake transactions in an informed manner. Though sharing core principles, conveyancing under Scots Law has particularities that set it apart and warrant appreciation.