Solicitors, Searches, and Surveys: Unravelling UK Conveyancing Jargon
Buying or selling a home in the UK involves navigating a maze of legal processes and paperwork. Conveyancing is the term used for the legal transfer of property ownership from one party to another
Conveyancers, specialised property lawyers known as solicitors in the UK, handle the legal aspects surrounding the sale or purchase of a home. From searches to surveys to exchanging contracts, these solicitors manage key steps in the conveyancing process.
For those unfamiliar with conveyancing procedures, the jargon solicitors use can be confusing. So, ‘what is conveyancing?’ This guide provides an overview of key terminology related to UK conveyancing to help buyers and sellers understand the stages, reports, and professionals involved.
Choosing a Conveyancing Solicitor
The first step after offering or accepting a property deal is appointing a conveyancer to act as your legal representative
- Use recommendations from friends, family, estate agents or online reviews to find reputable options. Meet with a few.
- Check they are registered with the Law Society and specialise in property law. Review experience and qualifications.
- Understand fee structures – flat rates or percentages. Compare quotes among conveyancers.
- Assess responsiveness and communication styles during initial consultations.
- See if conveyancers also provide tax guidance on transactions or referrals to accountants.
While base conveyancing tasks are standardised, customer service and experience levels still vary. Taking time to choose an astute conveyancing solicitor lays the foundations for a well-managed transaction.
Stages of the Conveyancing Process
Conveyancing moves through several milestone stages on the path towards contract exchange and completion
- Taking initial instructions from the client after a sale or purchase is agreed – this initialises the legal process.
- Submitting standard conveyancing enquiries and forms to the other party’s solicitor.
- Commissioning searches related to the property’s legal status, condition and ownership history.
- Receiving the draft contract and supporting documentation from the seller’s solicitor.
- Negotiating final contract terms and conditions if required.
- Advising the client on signing the final contract and arranging the deposit.
- Exchanging signed contracts – the point at which the transaction becomes legal binding.
- Completing final searches and approvals in preparation for closing.
- Overseeing the clients’ financial completion and registering the property transfer.
While seeming mundane on the surface, each stage involves important preparations, disclosures and verifications to ensure a fully informed and binding transaction.
Property Searches in Conveyancing
Property searches are an integral component of the conveyancing process, serving to unearth critical information about the property’s history, legal status, and immediate surroundings. These searches are typically organised by the seller’s solicitor and involve comprehensive investigations using specialised databases and local authorities. Here are some common property searches conducted during conveyancing:
Local Authority Search – This search delves into details regarding planning approvals, building controls, infrastructure schemes, and other factors that may have an impact on the property or the local area. It ensures that the buyer is aware of any developments or restrictions that may affect the property.
Water/Drainage Search – A water and drainage search provides maps outlining the water supply and sewerage systems, including the pipes serving the property. This search helps identify potential drainage issues or concerns that might require attention, ensuring the property’s functionality.
Environmental Search – An environmental search is essential for assessing the property’s vulnerability to various risks. It highlights factors such as the potential for flooding, land contamination, or nearby local developments that could influence the property’s desirability and safety.
Chancel Check – In certain cases, properties may be subject to historical parish charges known as chancel repair liability. This search confirms whether the property is liable for such charges, ensuring that the buyer is aware of any financial obligations tied to the property’s history.
Mining Search – Properties located in specific regions may be at risk of subsidence due to historical mining activity. A mining search examines the property’s location for any past mining activity, ensuring that potential subsidence risks are assessed and disclosed.
Property searches play a crucial role in the conveyancing process by providing buyers with essential information about the property’s background and the local area. These searches help buyers make informed decisions, assess potential risks, and ensure that they are fully aware of any issues that may impact their purchase. By conducting these searches, both buyers and sellers can navigate the property transaction process with greater transparency and confidence.
Conveyancers review search results to raise any concerns early before the transaction commitments are made. Additional searches may be recommended by conveyancers depending on property type and location.
Surveys in the Conveyancing Process
Property surveys play a pivotal role in the conveyancing process, complementing the information gathered through searches by providing in-person inspections conducted by qualified surveyors. These surveys aim to thoroughly assess the physical status, condition, and structural integrity of the property in question. Here are detailed insights into some standard property surveys commonly employed during the conveyancing process:
Homebuyer Report – This is the most commonly utilised survey for residential property sales. It combines a property valuation with a surface-level visual inspection. The report identifies maintenance needs and defects, offering buyers an overview of the property’s condition. While it is not as comprehensive as a building survey, it provides valuable insights into potential issues that may require attention.
Building Survey – A building survey is a comprehensive inspection conducted by a surveyor with expertise in property construction. It offers a detailed analysis of all aspects of the property’s construction and condition. This type of survey is particularly essential for older, unique, or dilapidated properties where a more thorough assessment is warranted. It provides buyers with a comprehensive understanding of the property’s structural integrity and potential maintenance needs.
Mortgage Valuation – While not a full survey, a mortgage valuation is conducted to verify whether the property is suitable collateral for lenders. It is primarily aimed at protecting the lender’s interests and may highlight major flaws that could affect the property’s value. However, it does not provide the level of detail or insights offered by comprehensive surveys.
Energy Performance Certificate (EPC) – An EPC assesses the energy efficiency of the property and makes recommendations for improvements. It is legally required documentation for property sales and provides valuable information about the property’s environmental impact and potential energy-saving measures.
Property surveys serve as a critical step in the conveyancing process, helping buyers make informed decisions about the properties they are considering. They provide valuable insights into the property’s condition, potential issues, and maintenance requirements. Choosing the appropriate survey type depends on factors such as the property’s age, uniqueness, and overall condition. By investing in a thorough survey, buyers can reduce the risk of unexpected problems and make more confident decisions when purchasing a property.
Sellers may also choose to have pre-sale surveys done to identify issues upfront that could derail transactions later.
The Critical Role of Title Deeds
When buying a property, conveyancers thoroughly scrutinise the title deeds:
- The deeds provide documentary evidence proving current legal ownership and the property’s registration.
- They disclose any attached covenants, conditions, rights of access or restrictions on the title.
- Historically, they detail all past owners of the property over decades.
- Problems with gaps in deed ownership or missing documents can delay transactions and completions.
- Mortgages, liens and other charges are attached as encumbrances on the title until discharged.
The Land Registry holds official records of deeds and titles digitally for conveyancer access.
Reviewing deeds minimises risks of acquiring issues unknown to the buyer. For leases and shared ownerships, additional leasehold documents are also examined.
The Role of Indemnity Insurance
Even meticulous conveyancers can miss a potential defect in deeds and documents. Indemnity insurance provides a safeguard:
- It protects buyers and lenders if issues later surface regarding the validity of documentation like title deeds.
- Covers scenarios like missing deed information, covenants contradicting usage, improper registrations etc.
- Conveyancers arrange indemnity cover from third parties on behalf of clients to allocate risks.
- One-off policy premiums apply depending on property values and the nature of the risks identified.
Policies compensate for future losses from undiscovered flaws up to prescribed limits.
While not mandatory, indemnity insurance is recommended by conveyancers to mitigate deed defects that searches may not flag.
Managing the Deposit Exchange
Concluding contracts involves navigating the deposit payment
- Once terms are finalised and searches/surveys reviewed, contract exchange occurs – usually via solicitors.
- In exchange, the buyer pays a deposit of 5-10% of the purchase price which is held by the seller’s solicitor.
- Payment methods include bank transfer, banker’s draft or personal cheque.
- If the buyer withdraws after exchanging, the seller keeps the deposit. If the seller withdraws, it is returned to the buyer.
- The balance of funds is transferred on completion day when ownership legally transfers.
- Deposit disputes can arise if contracts contain clauses making it refundable in certain scenarios.
Carefully verifying deposit terms upfront protects both parties if completions are delayed or obstructed.
Understanding Capital Gains Tax
Conveyancers advise on capital gains tax owed on properties:
- CGT applies if the property was ever used as a main residence and the owner makes a gain (profit) on disposal.
- Private Residence Relief exempts gains from the home you occupy and reside in during ownership.
- Tax is owed on the gain amount above the annual CGT allowance, currently £12,300 per individual.
- The tax rate depends on income tax banding – 18% for basic ratepayers and 28% for higher-rate taxpayers.
- Letting relief and transfer to spouses allow added exemptions in certain cases.
- Investors disposing of buy-to-lets and second homes also face CGT.
Factoring in conveyancer CGT guidance ensures tax liabilities that reduce net sale proceeds are accounted for.
Avoiding Conveyancing Delays
Smooth conveyancing requires proactive client participation:
- Return forms and requested documents to your conveyancer promptly to avoid holding up progress.
- Be responsive to enquiries so important clarifications are not dragged out.
- If using a mortgage, provide info to lenders quickly so approvals are not delayed.
- Ensure funds for deposits and completion are readily available when required.
- Try to avoid amending plans and purchase offers once conveyancing commences.
- Plan removals and occupations carefully around anticipated completion timelines.
While driven by your conveyancer, input needed from clients at key points helps maintain momentum.
Conveyancing solicitors handle the intricate legal aspects of UK property transactions. While the jargon and documentation involved can seem complex, a reliable solicitor guides clients through the process. Understanding keystone terms like searches, surveys, title deeds and deposits allows homeowners to participate actively in conveyancing and make informed decisions.
With both solicitor expertise and engaged clients, conveyancing procedures progress smoothly towards secure contract exchanges and completions. Demystifying the terminology transforms the legal dimensions of buying and selling into managed, milestone-driven processes culminating in the registration of new property owners.