Title DeedsThese are the documents which prove who owns the property. They also contain details of matters affecting the property, e.g. restrictions on its use or rights of way. If the ownership of the property has been registered at the Land Registry, the Deeds will be in the form of a Certificate. This is now kept at the Land Registry in an electronic form and any documents issued by the Land Registry will only be copies.If you have a mortgage then your bank or building society may be holding on to your title deeds. We will need to know your mortgage account number and the name and address of the lender. Some Lenders charge a fee to send out your deeds but this will normally be added to your mortgage account. Some Lenders no longer store title deeds and will rely on the electronic register at the Land Registry to keep all the details contained in the deeds. This information will however not become apparent until we have contacted the Lender to request the title deeds.
Property Information FormThis is a questionnaire which the seller completes and which contains practical information about the property, e.g. who owns the boundary walls or hedges or whether there are any informal arrangements between neighbours affecting the property.
- If you are buying then you should tell us if there are any particular points about the property that concern you. We can then investigate the matter.
- If you are selling you must disclose all information about the property which is relevant. Failure to disclose certain information could give the buyer grounds for taking legal action against you.
Fixtures Fittings and Contents FormThis is a list of the items at the property which are being taken or left behind, so that both parties understand what is included in the selling price.
- The Deposit is usually 10% of the purchase price although a lesser sum can be accepted if, for example, the buyer is having more than a 90% mortgage.
- Most contracts stipulate however that the buyer remains liable for the full 10% if anything goes wrong. The deposit is handed over on exchange of contracts and is non returnable, in the event of the Buyer being unable or unwilling to proceed to complete the purchase.
MortgageThis is a loan which is secured on a property. The lender keeps the Title deeds until the loan has been repaid. If the Borrower does not keep up the loan repayments, the Lender can bring Court proceedings against the Borrower to obtain an order to evict the Borrower and sell the property.There are many different types of Mortgages available and it is advisable to take expert advice from an Independent Financial Advisor to find the Mortgage most suitable to you. Your Mortgage arrangements must be in place prior to Exchange of Contracts
ContractAs the name suggests, this is the formal document which sets out the terms of the sale, and will in particular contain the names of the parties, a description of the property and the price. It is prepared in duplicate by the Sellers Solicitor once the Sellers Solicitor has the Title Deeds or Land Registry copies and one copy is sent to the Buyers Solicitor for approval together with a copy of the Title Deeds.
Exchanging ContractsOnce the result of the Local Authority Search and any other searches together with a suitable Mortgage offer have been received, the Solicitor will report to the Buyer on the Contract and other enquiry replies received by the Solicitor. Once the Buyer is satisfied that the paperwork accurately reflects the Buyers wishes, then the Buyer will sign the Contract. Once the Contract is signed and in the possession of the Solicitor together with a Deposit then discussions will take place to fix a Completion date. Once this is agreed, the solicitors will then telephone each other to formally exchange contracts and will then forward in the post to each other their own clients part of the Contract with the Buyers Solicitor also sending to Sellers Solicitors the Deposit. From the minute that contracts are exchanged, the sale becomes binding. From that moment on, the Seller must sell, the Buyer must buy, it must be done at the price stated in the Contract, and this must all be done at the price set out in the contract. Until contracts are exchanged, NOTHING is binding – either party can walk away from the transaction with no penalty.
Completion DateThis is the date that the transaction is completed. The Buyers solicitor pays over the balance of the purchase price and in return the Sellers solicitor hands over the Title deeds and the Transfer Deed.The Buyer is now the new owner of the property and is therefore given the keys and can move in.
Land Charges DepartmentThis is a Government Department which keeps records of matters affecting property the ownership of which is not registered at the Land Registry.
Land RegistryThis is another Government Department which keeps a register of land ownership in England and Wales.When a property changes hands or is remortgaged the Transfer Deed and/or Mortgage Deed must be sent to the Land Registry so that the Change of ownership or Mortgage Lender can be registered. Although the Land Registry have registered 17 million properties since it was formed in 1925, the ownership of some properties remain unregistered. The Land Registry charge a fee for dealing with a registration.
Stamp Duty Land Tax
This is simply a tax charged by the Government and is charged at different rates depending on the purchase price of the property. The standard rate bands are set out below:
Standard rate bands
On purchase price up to £125,000 0% Between £125-£250,00 2% Between £250-£925,000 5% Between £925-£1.5m 10% Over £1.5m 12%
In addition, if you are purchasing a property and already own another property, then additional stamp duty of 3% will be payable on each standard rate band. See below:-
If you are selling your main house at the same time as your purchase and the property to be purchased is to replace your main home, then you will not be liable for the extra stamp duty no matter how many other properties you own.Further information on stamp duty land tax can be obtained from the Revenue and Customs website www.gov.uk/stamp-duty-land-tax/overview
Standard Rate Buy-to-let/second home rate On purchase price up to £125,000 0% 3% Between £125-£250,000 2% 5% Between £250-£925,000 5% 8% Between £925-£1.5m 10% 13% Over £1.5m 12% 15%
Transfer DeedThis is the document that passes the ownership of the property from the seller to the buyer.It is dated with the Completion Date, and will be sent to the Land Registry after completion. The Land Registry need this deed to change their records, and show the buyer as the new owner of the property.
Other SearchesIf you are having a mortgage most mortgage lenders will require the Solicitors to carry out all the usual searches which would be normally carried out in most property transactions. This will include a drainage/water search, which will provide information such as whether the property is connected to mains drains or water, water quality and whether or not any main drains pass through the boundaries of the property.An environmental search is now considered by most Solicitors to be an essential search.This would reveal amongst other things whether the property is in a flood plain, has the property been built on a former land fill site, is the property in close proximity to any hazardous waste or processes.Depending on the location of the property, the Solicitor may decide to send off special searches e.g. a coal mining search to ascertain whether the property might be affected by old mine workings. Alternatively the Solicitor may make a search to find out if the property has been registered as Common Land, this is particularly important in rural areas.
Final SearchesThese are searches made immediately before the Completion Date in the Land Registry and the Land Charges Department to check that nothing new has been registered.If you are still confused, or want some more help, please feel free to call us and ask for our help.