Tips for First Time Buyers: the Conveyancing Process Explained

Lauren Powell has joined the Residential Conveyancing and Private Client team here at CJCH and wanted to share these tips for first-time home buyers:

As a first time buyer, the legal process of purchasing a property (known as conveyancing) can be a confusing and stressful time.

At CJCH Solicitors, our dedicated team of solicitors are here to make the process as straight forward and stress-free as possible. We have created a brief guide to the steps of the conveyancing process and some of the terminology that is often used to give first-time buyers an initial understanding of the process.

For further information or for a competitive quote for our legal services, please contact a member of our team.

  • Step One: your offer is accepted

Congratulations! You have found your property and agreed on a purchase price with the seller.

It is at this stage that the estate agents, seller or developer (in the case of new build properties[1]) may ask for the details of the solicitor you have decided to instruct to act on your behalf.

At CJCH Solicitors, we pride ourselves on providing prompt service. We ensure that once we have provided a quote and agreed our fixed fee[2] with you, we send confirmation of our instruction to you as soon as possible. As this is likely to be the most important financial transaction of your life, it is vital to ensure you choose the right solicitor. A cheap service can often mean a poorer quality service!

Our quote will include information on whether any stamp duty land tax (which applies to properties in England) or land transaction tax (which from April 2018 applies to properties in Wales) is likely to be payable.  The rules can be complex, so a chat with one of our team is advised to ensure you know upfront what the costs are likely to be.

At this stage, we also request the contract pack[3] from the seller’s solicitor.

  • Step Two: apply for a mortgage/funding your purchase

If you require a mortgage to purchase the property and you have not already made arrangements, it is important to make an application for a mortgage to help fund the purchase and ensure you obtain your agreement in principle[4] as soon as possible.

For new build properties, a Help to Buy Equity Loan[5] in addition to your mortgage could also be a possibility for you. It is best to seek financial advice before agreeing to any mortgage or loan, to ensure you choose the best option for you.

Your lender will request the details of your solicitor. You should receive a copy of your mortgage offer and your solicitor will also be sent a copy by your lender. Your solicitor will normally also represent your lender during the process.

  • Step Three: survey and searches

It is always advisable that you commission a survey to ensure a detailed physical inspection of the property is carried out by a professional surveyor to highlight any potential issues. Although this is an extra cost to you, it can save you discovering any nasty surprises in the future!

Please note that if you are purchasing with a mortgage, it will not be enough to rely on your lender’s valuation report as this is done to satisfy your lender that the property is sufficient security for their loan.

Your solicitor will also order search reports[6]. Searches are normally carried out with the local authority, water and drainage provider and an environmental search is usually done (some additional searches can be required depending on the property itself).

Your solicitor raises any enquiries they feel necessary with the seller’s solicitor based on the information provided in the contract pack at the beginning of the process, the search reports received your survey report and any questions you may have for the seller from your physical inspection of the property. When the seller answers the enquiries satisfactorily, it is the time to agree a completion date[7] with all parties involved.

  • Step Four: exchange of contracts

Before the day of completion, a process known as ‘exchange of contracts’[8] will take place. The time in between exchange of contracts and the day of completion does vary depending on the circumstances of both the seller and the purchaser (and whether there is a chain[9] involved).

Exchange of contracts is a process that takes place over the phone between the seller’s solicitor and purchaser’s solicitor. Exchange of contracts is the point whereby you become legally bound to purchase and is designed to provide security that completion goes ahead on the agreed date. It is at this stage that you forward your deposit, normally 10% of the purchase price. If you withdrew from the purchase after the exchange of contracts, the deposit is forfeited to the seller. The seller can also face penalties if they withdrew from the sale after the exchange of contracts. Although, parties withdrawing after the exchange of contracts is very rare.

Before exchange of contracts can take place, you will normally meet with your solicitor to sign the necessary documents. You will also be given information on how to transfer the deposit funds to your solicitor, which your solicitor needs to receive before exchange of contracts. Your solicitor will also request your mortgage funds directly from your lender to ensure they arrive in time for the agreed completion date.

  • Step Five: completion

On the day of completion, the seller vacates the property (if they have not already done so).

Your solicitor will send the purchase funds to the seller’s solicitors and, on receipt of the funds, the seller’s solicitor will notify your solicitor that the keys can be collected.

The keys are normally collected from the acting estate agents’ office and completion usually takes place around lunchtime, though it will depend on when the funds are received by the seller’s solicitor.

  • Stage six: post-completion

Your solicitor will see to the filing of a stamp duty land tax return to HM Revenue and Customs (HMRC) or a land transaction tax return to the Welsh Revenue Authority (WRA) and the payment of any tax that is due on your behalf.[10]

Your solicitor will also register the property in your name with HM Land Registry[11]. When registration is completed, your solicitor will send you an updated version of the title to the property, showing you as the registered owner. If you are purchasing a leasehold property[12], the lease will be registered in your name.

This is often also an important time to consider whether you should make a Will to ensure your property, along with any other assets, would pass in accordance with your wishes. For more information on our Will drafting services and fees, please contact a member of our Private Client department.

Notes:

[1] New build properties are properties that are to be, are in the process of, or have just been built by a developer. The conveyancing process is slightly different when you are purchasing a new build property. Please contact our team for further information.

[2] At CJCH Solicitors, we offer a fixed fee service for conveyancing with no hidden costs. This means that the quote for our legal fees will be for a fixed amount and will not increase, provided no unforeseen work is required (if it is, we agree any further costs with you beforehand).  

[3] This will include information on the title to the property, the sale agreement, and forms completed by the seller providing details about the property and its fixtures and fittings, together with supporting documents.

[4] An agreement by your lender to lend a certain amount to you based on the information you have supplied at that stage. A formal application will need to follow to the lender before they formally grant you the loan.

[5] This is a government scheme which could help fund up to 20% of your new build home, leaving you with a 5% deposit to pay (rather than a 10% deposit which is normally required) and a 75% mortgage. There are different rules that apply to properties in England and properties in Wales (Help to Buy and Help to Buy Wales are separate organisations). Please contact us for further information.

[6] Search reports are carried out through an independent search provider. The searches can provide essential information on issues such as the property’s highways, connections to the sewage and water drainage systems, flood/contamination/subsidence risks and planning permission and building regulation documents relating to the property, to name just a few.

[7] The completion date is the date that you finalise the purchase and are able to collect the keys to the property.

[8] You will need to ensure you have a buildings insurance policy in place for the property for this date.

[9] This is where there are a number of linked sales and purchases that are all reliant on one another to complete. Naturally, the longer the chain, the longer the conveyancing process tends to take.

[10] For most purchases, there is a duty to inform HMRC or the WRA of the purchase via a return, even if no tax is payable.

[11] An organisation that registers ownership of property and land in England and Wales.

[12] This is where you have an agreement with a landlord called a lease that, amongst other things, will state how long you will have ownership of a property. The landlord is often the person/organisation that owns the freehold title to the property. At the end of the lease, ownership returns back to the landlord. If you own a freehold title to a property, you basically own the property outright.

CJCH History Month: The Story of Patchell Davies Solicitors

By Amy Palin

In April 2017 CJCH Solicitors welcomed its newest addition to the firm, with the incorporation of, Blackwood based, Patchell Davies Solicitors.

The story of Patchell Davies begins in 1977, when a new face arrived on the legal scene in Blackwood, Howard Patchell. After working less than a year as an Assistant Solicitor in a local firm, he became a partner, but it would only be four years before Howard decided to go it alone and open his own practice. Howard Patchell & Co opened its doors on Pentwyn Road, Blackwood in January 1982.

The firm grew from strength to strength, and in 1985 was joined by Graeme Davies. This marked the beginnings of the team that, despite changes over the years, would remain at the core of the firm throughout.

Graeme’s arrival at the firm allowed for the expansion of its expertise, in family law and litigation, areas in which he specialises.

With an expanding team and growing demand, the firm moved to bigger offices at its current location on Blackwood High Street in 1987.

It was in 1992 the firm officially became established as Patchell Davies, the name by which it has been known for nearly three decades, and under which it became a well-known and respected face on the High Street, offering clients a wide range of services.

Howard Patchell specialises in Wills, Probate, Conveyancing, and Commercial work. Graeme Davies is accredited as a Senior Litigator by the Association of Personal Injury Lawyers and is a member of the Family association Resolution. David James, who has been with the firm for eight years, and the firm’s newest addition, Joanne Lerwill, specialise in Conveyancing.

The firm today takes pride in its reputation and loyalty from clients. This can be attributed to the quality of service, and also to the relationships developed with longstanding members of staff, who give clients the confidence that they will always receive a professional service with a personal touch.

Now an integrated part of CJCH Solicitors, the team from Patchell Davies continues to deliver their impeccable work ethic and client service standards.

Landlord and tenant issues: How long are you willing to wait to recover possession of your property?

By Nerys Thomas.

Generation rent (generation of young people living in rented accommodation with little immediate chance of becoming home owners due to the high cost of property) is an ever-increasing reality within the UK.  Whilst this is good news for landlords, whether they have one rental property to their name or those with large property portfolios, being a landlord can at times be compared to a costly roller coaster experience, especially when attempting to recover possession of your property.

Fundamentally, no landlord can recover possession of their property without the tenant providing vacant possession or the court ordering for the tenant to vacate.  If the tenant does not leave the property following a court order being obtained, landlords must then apply for a court approved bailiff to undertake an eviction.  All of which can become an expensive and time-consuming situation, where the landlord is usually already aggrieved e.g. unpaid rent.        

The Ministry of Justice published statistics in November 2017 surrounding landlord possession proceedings.  It is pleasing to note from this publication that the actual number of possession claims directed to court are slowly reducing, but those claims which are directed to court have seen the time frames for the matters being addressed marginally increasing.  On average, the Ministry of Justice inform us that it could take 11.4 weeks from the filing of a claim at court to getting a possession order.  This means that if your tenant has fallen into rent arrears and you have served the appropriate notice it will take, on average, just shy of three months from filing your claim at court to the matter being considered by a Judge.  That would potentially be three further months where rent is not being paid.

It is detailed in the Ministry of Justice report that it will take on average 41.2 weeks from the date of issuing a claim at court for possession to actually recovering possession, should a tenant fail to adhere to the court order requiring that he/she vacates, and a court approved bailiff is employed to undertake an eviction.  Once again, if the reason for pursuing possession is rent arrears, this time frame is likely to result in an eye-watering debt owed to the landlord.     

Please note that the Ministry of Justice statistics have been collated across England and Wales, therefore the true situation in your local court may vary depending on the court’s workload.  Nevertheless, the figures are a clear warning for landlords to try and protect themselves where possible.

At CJCH Solicitors, we have the experience and knowledge of providing an all-encompassing service in relation to landlord and tenant matters, whether this is to safeguard the landlord prior to entering into a rental agreement; when disputes have arisen or to recover possession and/or rent arrears through the court process.  Should you wish to discuss your situation further or seek assistance with a dispute, contact Nerys Thomas at disputeresolution@cjch.co.uk or by telephone on 0333 231 6405.