Did you know?
1. THAT Conveyancing is the legal term for the process of transferring the Legal Title of a property from one party to another. In England and Wales this is a two stage process:-
a. The first stage is from the acceptance of an offer until Exchange of Contracts. Before Exchange of Contracts takes place the seller or the buyer may decide to re-negotiate the price, sell to someone else, withdraw from the purchase and buy a different property or just decide not to sell or buy at all. Each party is responsible for paying their own survey, legal and other fees. Therefore, unfortunately, if the other party decides before Exchange of Contracts to withdraw from the sale or purchase you have no legal right to claim from the other party any costs you have incurred.
b. The second stage is from Exchange of Contracts until the moving day (Completion). Once Contracts have been exchanged both seller and buyer are legally committed to the sale and/or purchase. The price and completion date is fixed by the Contract and if either party fails to comply with the terms of the deal without the agreement of the other party then they will be in breach of contract and could face expensive legal action.
2. THAT houses and flats are “sold as seen” like most other second hand items. The expression “caveat emptor” or “buyer beware” applies to the state and condition of the property. It is up to the buyer to satisfy himself or herself on the condition of the property before buying and it is difficult to make any claim against the seller afterwards. Therefore, it is very important to have your own survey carried out and to get quotes for any work that the surveyor recommends. Although this may cost a few hundred pounds a structural problem could easily cost you several thousand pounds.
3. THAT you should not rely on your lenders’ “survey” because:-
It is not really a survey at all, it is a valuation and is only done to check that the property will provide security for the lender to lend you the amount you want to borrow (not what it is worth).
It is produced for the benefit of the lender and not for you. As a result the surveyor is only legally liable to the lender and not to you.
You should therefore obtain your own independent survey.
4. THAT under the terms of the Contract the buyer is usually responsible for insuring a property from Exchange of Contracts. Therefore, if the property is damaged between Exchange of Contracts and Completion even though the seller is still living there, it will be the buyer’s insurance that would cover it. A seller should not, however, rely on the buyer and should not cancel their buildings insurance until after completion, even though for a period the property will be doubly insured.
5. THAT the Contract will state that on Exchange of Contracts the buyer will pay a deposit and if the buyer does not complete the purchase the seller will then, in certain circumstances, be entitled to keep the deposit. In effect the deposit acts as a guarantee that the buyer will complete. Most contracts provide for the payment of a 10% deposit, but often a smaller sum can be agreed. Often this is the deposit received from the sale of the buyer’s existing property which is passed on up the chain. If a deposit of less than 10% is paid on Exchange of Contracts then it is usually condition of the Contract that if the buyer fails to complete on the agreed date they will be liable to pay the full 10% to the seller.
Conveyancing is not a simple process. It involves a considerable amount of paperwork and requires careful consideration of the documentation and detailed advice to you by your legal adviser. You should make sure that you understand the process and the documentation as well as your liabilities arising from the transaction. Buying or selling a property is a major financial decision and without the right advice and guidance can be challenging.