Conveyancing

Home Information Packs (HIPs)
If you are a seller you need to make sure that you have a pack by the time you market your property.
 
The Home Information Packs is a collection of compulsory and optional documents that includes Local Searches and an Energy Assessment of your property.  The pack provides the buyer with up to date information on the property helping the buyer to make a more informed decision as to whether to proceed, potentially reducing delays or even aborted sales.  It also includes a guide on how to improve the energy performance of the property.
 
If you are a buyer you should ask the seller to provide you with a Home Information Pack so you too can make an informed decision as to whether to go ahead with your purchase
 
What’s in a Pack
The Home Information Pack provides important information about the property including, its legal title, planning permissions, searches, energy efficiency and environmental impact.  Some information is compulsory and some is voluntary.
 
The sale statement included in the pack provides information about the seller’s name and full address of the property, whether it is freehold or leasehold and evidence of the title whether it is registered or unregistered.  If the property is leasehold it will show you the number of years remaining on the property.  The title plan will show the boundaries of the property and any surrounding land. 
 
Local Authority searches and drainage and water searches are included in the pack, but there are a number of other searches which may need to be undertaken and these will be undertaken by the purchaser’s solicitor.  Pennine Law carry out official searches which are acceptable to all Mortgage Lender’s thereby reducing the risk and potential delay of a purchaser having to carry out further searches if their lender requires an official search. 
 
The EPC indicates how energy efficient the property is and information about what impact the property has on the environment. The certificate will also include pointers as to how the property could be improved to make it more energy efficient.

Residential Conveyancing

Stages of a Conveyancing Transaction

Consider how should you own the property
Survey & Mortgage
Searches – against the property – Local Authority and Drainage searches are carried out by the Seller if a HIP is provided
Investigation of Title & Enquiries
Exchange of Contracts
Completion
Payment of Stamp Duty Land Tax
Registration of Property at the Land Registry

How should you own the property?
If you are buying a property with someone else you should understand the basis of ownership from the outset. There are two kinds of joint ownership:

Joint Tenants
Two or more people own the property on the following basis:
On sale of the property the proceeds are automatically divided equally between the parties, regardless of contributions made to purchase price or subsequent improvements
If one joint owner dies, his or her share automatically passes to the surviving owners without payment. The transfer of the deceased owner’s interest to the other joint owners is automatic and is not affected by any Will of the deceased owner.

Tenants in Common
Two or more people own the property and the shares in the property are specified. They may own property jointly as tenants in common in equal shares or unequal shares. This form of ownership can record differing shares, particularly if one party has contributed more of the purchase money than another. The effects are as follows:
On sale the proceeds of sale are distributed between the owners in accordance with their stated shares
If any owner dies his or her share does not automatically pass to the other owner but will form part of the deceased estate and therefore pass to either the beneficiaries under the Will or if no Will has been made to the deceased next of kin.

Note: If two or more people own property as beneficial owners it is possible for any one owner to sever the joint tenancy and change it into a tenancy in common by the serving of a notice on the other party(ies). It is not necessary to have the agreement of the other owners for this to happen.

Survey & Mortgage
If you are applying for a mortgage your lender will need an independent valuation of the property. They normally appoint their own surveyor to do this, but the buyer has to pay for it. This is a valuation not a survey and cannot be relied upon in determining the condition of the property.

Unless you are buying a new property, which has the benefit of a ten-year guarantee or some other form of guarantee, it is recommend you obtain the benefit of an independent survey of the property by a chartered surveyor. This is known as a “Home Buyer’s Report”, the price of which varies according to the value of the property. Once you have completed the purchase it will be too late to rectify any defects, which were not disclosed. The golden rule is “caveat emptor” “buyer beware”.

Searches
There are various searches which can be undertaken when purchasing land or property to assist in identifying the facts, and decisions that may adversely affect the property or your enjoyment of it.

Local Authority Search – Pennine Law advise purchasers to have sight of an Official Local Authority Search rather than an agency search. Whilst slightly more expensive an Official Local Authority Search these searches are preferred by Lenders and can in the long run save time and further expense. A Local Authority Search would reveal whether any planning permission or building regulation approval applications have been adopted by the Council. It would also reveal whether there are any road schemes in place which would affect the property or the surrounding area and whether or not the local authority have issued any compulsory purchase or enforcement notices. Radon is a colourless, odourless gas which is radioactive and which occurs naturally. It is formed where uranium and radium are present in bedrock and can move through cracks and fissures into the sub-soil and into the atmosphere, or by seepage into spaces under and within dwellings. Radon occurs everywhere across the UK but usually at levels, which pose little or no risk. Your local authority search will advise the level of risk and where there is a likelihood of a high level of radon being present further advice will be required from the National Radiological Protection Board.

Drainage Search – This search reveals whether the property is connected to the mains water supply whether surface water and foul water drain from the property to the public sewerage system and whether there are any public sewers within the boundary of the property.

Environmental Search – provides information on the area surrounding the property and details of any firms or industries in the area which are subject to environmental controls. It also provides information on landfill sites within the area and any incidents of pollution or other environmental damage in the area.

Mining Search – This search reveals whether the property is likely to be troubled by past present or future underground or opencast mining. It will also reveal whether there are any shafts close to the property and whether any subsidence claims have been noted against the property.

Chancel Repair Search - The purpose of this search is to determine if the property is located in the parish of a church, which may be able to compel all the residents of the parish to contribute to repairs of the Church. If the property is identified as being in a ‘risk parish’ indemnity insurance can be arranged for a single premium based on property value and size. All lenders will require this search to be undertaken. More details can be obtained from the website www.clsl.co.uk.

There are other searches, which may be necessary for example a Company Search and a Commons Registration Search.

Pennine Law undertakes the majority of these searches on line which means the results are processed quicker.

Investigation of Title & Enquiries
The Sellers Solicitors provide the draft Contract and various information for the purchaser to approve. The Buyer’s solicitors will ensure that all the documents are checked thoroughly before proceeding thereby ensuring everything is as it should be and no difficulties should arise following completion. The seller will provide information of what is being included and excluded from the property. Boundaries and maintenance of boundaries will be identified, disputes with neighbours and work carried out to the property will also be provided. Once this information is provided further enquiries may need to the raised with the Seller solicitors.

Exchange of Contracts
Once the contract has been signed and the title document and search results are satisfactory and funds are available either by way of mortgage or personal funds all parties can proceed to exchange of contract. Exchange of contracts is carried out by the Solicitors and this is when the transaction becomes binding on all parties. A completion date will be set and the terms of the transaction cannot be varied. It is usual for the Buyer to pay the Seller a deposit of 5% or 10% of the purchase price on exchange of contracts. The buyer will also be responsible for the buildings insurance on the property from exchange of contracts. When there are linked transactions exchange of contracts must take place simultaneously throughout with the same completion date.

Completion
Completion day is when the balance of the purchase money is paid to the sellers solicitors and in return the buyer receives the keys to the property.

Stamp Duty Land Tax
Stamp Duty Land Tax is payable to the Inland Revenue within 30 days of completion. Up to date rates of stamp duty land tax are available on the following link www.hmrc.gov.uk/sdlt/rates-tables.htm

Registration of Property
Following completion and payment of any stamp duty land tax the Buyers solicitors will register the Buyer as owner and if applicable the mortgage at the Land Registry. Following registration the Land Registry will provide a copy of the Title Information Document. If a mortgage is in place on the property a copy of the Title Information Document will be sent to the lender.

Note: If you have not already done so, Pennine Law recommend you consider making a Will after completing your conveyancing, as this will have the effect of bringing certainty into what is otherwise both an uncertain and very often unsatisfactory area, particularly when people die intestate. If you would like us to assist you in the preparation of your Will please arrange an appointment with our specialist.

Property Jargon Buster

Additional Enquiries
Specific enquiries that are sent to the Seller’s Solicitors based on the information contained in the pre-Contract documentation.

Beneficial Interest
Entitlement to have a share of proceeds of a property.

Caveat Emptor
Buyer beware

Charge
A charge on a property similar to a mortgage. The purpose is to give the holder of the charge additional security if they are to be paid out of the eventual sale proceeds.

Chartered surveyor
The generic term for surveyors who have achieved the professional standards set out by the Royal Institute of Chartered Surveyors (RICS).

Completion/completion date
The point in a sale and purchase transaction when the Buyer’s Solicitor sends the purchase price to the Seller’s Solicitor and the Seller hands over the keys. The date on which the Seller is obliged to move out of the property and the Buyer moves in as the ownership of the property passes from the Seller to the Buyer.

Compulsory Purchase
A forced sale to a government department or statutory authority.

Contract
A written and signed agreement made between the Buyer and the Seller. It will give full details of the property and all of the other terms and conditions of the sale that have been agreed.

Demise
The extent of the premises.

Demised premises
Land or property leased for a term of years.

Disbursement
Fees that are paid to third parties such as Local Authorities and Land Registries

Energy Performance Certificate (EPC)
This forms part of the Home Information Pack and rates a home on how efficiently it uses energy.

Engrossment
The final version of a document

Equity
The part of the value of a property that is free of mortgage or other charge.

Exchange of Contracts
The point in a sale and purchase when the Seller agrees to sell and the Buyer agrees to buy at the price and on the completion date outlined in the contract.

Fittings and Contents Form
A prescribed list on which the Seller shows the items included or excluded in the sale

Freehold Title
A type of land ownership that in effect runs forever.

Land Registry
The government department that handles the registration of land titles in England and Wales.

Leasehold Title
The interest created out of a freehold estate by which a Tenant is granted a right of ownership for a fixed term of years on payment of an annual ground rent.

Legal Title
The legal ownership of a property is usually held by owner occupiers or trustees who hold on behalf of others.

Mortgage offer
The formal document making an offer of a loan under a mortgage which will say how much the loan is for, the period and the amount of repayment and all the terms and conditions attached to the loan.

Searches
Standard questions which are raised with the Local Authority, Water Authority, Environmental, Planning, Mining, Tin, Chancel Repair and other searches made prior to agreement of contracts.

Property Information Form/Additional Property Information Form
A prescribed set out questions completed by the Seller of a property to provide information about alterations, boundaries, disputes, services and guarantees to the property etc.

Stamp Duty Land Tax
Tax payable to the government on the transfer of ownership of property or land, subject to certain tax rate bands and exemptions.

Tenants in common
Where more than one party owns a property and each party has a specified share.

Title Deeds
If a property is registered title the deeds may contain a set of title registers and a plan. If the property is unregistered the deeds may comprise individual documents giving the title over a number of years

Wayleave Agreement
An agreement with a utility company to keep or run its equipment on or through land.