Andrew Wilson (Trainee Legal Executive in Residential Conveyancing), explains all!
Conveyancing is the legal and administrative process carried out when a house or flat is purchased or sold.
Upon instructing a solicitor to act on your behalf, there will be various anti-money laundering and identity checks to be carried out before any work can be carried out. Once these compliance checks have been carried out, the conveyancing process begins.
The solicitors acting for the purchaser of the property will carry out many searches and investigations on the property and legal documents to ensure that the buyer obtains a good and marketable title upon their purchase. The aim here is to ensure that the purchaser does not have difficulties selling the property in the future.
This process will often also include raising ‘enquiries’ with the seller’s solicitors which will involve resolving legal issues or seeking clarification on unclear arrangements.
This is often the longest stage in any conveyancing transaction as it involves a lot of ‘back and forth’ between the solicitors and a lot of information is required from third parties. For example, local authorities are relied upon to provide information regarding planning and building regulations documents, and management information companies are required to provide many details in leasehold transactions.
Prior to exchange of contracts, there is no agreement in place and either party may withdraw from the transaction without any repercussions.
Exchanging contracts is the arrangement of the buyer and seller of a property entering into a binding legal agreement.
The buyer and seller will often sign a separate, identical contract that they will leave in the hands of their solicitors, undated, in readiness for exchange of contracts in order for their presence not to be required in the solicitors’ offices on the day, which in most cases would be most inconvenient.
All investigations must have been made prior to exchange of contracts and any legal issues will need to be resolved.
The completion date, or ‘moving date’ is fixed at this stage by agreement of all parties in the transaction (or chain of transactions where a buyer of a property is reliant on the sale of their own). Completion is usually at least five working days after exchange of contracts due to mortgage lender requirements, however, in reality completion can be weeks or even months following exchange of contracts if agreed by the parties.
There are significant financial penalties if either party withdraws from the transaction after exchange of contracts has taken place.
Completion is the date that the purchase monies are paid from the buyer’s solicitors to the seller’s solicitors and the property is transferred from the buyer to the seller. It is also on this date that most buyers will collect the keys to the property and begin the moving process into their new home.
Following completion, the solicitors acting on behalf of the buyer will arrange for their purchase to be registered at the Land Registry and it is at this point that the legal title is formally transferred.