Category Archives: Residential Property

Transferring Property Equity

Residential Property Solicitors at HS Legal Solicitors can help you with transferring property equity. Call us on 01206500181 or contact us online.

We can assist with transferring of equity if a property needs to be transferred into another name in accordance with a divorce settlement or if you just need to for another reason.

 

WHAT IS EQUITY?

Equity is the value of your property less the unpaid sum of your mortgage. For example, if you own a home costing £300,000 and you have a remaining mortgage of £80,000, you have £220,000 equity.

What is the transfer of equity?

A transfer of equity is a transaction where legal ownership of a property changes hands but at least one of the original owners remains on the title. For example, where a couple transfers it into the sole name of one or other of them or a person is added to the title.

It is generally much more straightforward than a sale or purchase as usually there will be no searches or enquiries, since the parties involved will have prior knowledge of the property, so there is no need for a contract.

How long does a transfer of equity take?

How Long Does A Transfer Of Equity Take? Straightforward transfers take about 4-6 weeks, but every transaction is different and each can take a different amount of time. The process will take longer if you have a mortgage.

 

Where There is a Mortgage

If there is a mortgage registered over the property, you will need to apply to your current lender to approve a “transfer of equity” application. Once the application has been approved, and we have instructions from your lender, we can draft the transfer deed, which affects the transfer of the property. We will then send this to you for signature.

Stamp Duty Land Tax

It’s important to note that stamp duty land tax is sometimes payable on the transfer of equity transactions. Ask us about this, one of our property Lawyers will be able to advise you. Once the transfer deed has been executed by all parties, we will obtain any additional funds from you and/or your lender and proceed to the completion stage.

Once completion has taken place, we will apply to the Land Registry to register the new ownership of the property. Once the Land Registry has completed the registration, we will provide you with a copy of the title deeds and return any original documents to your lender for retention.

Call our Residential Property Solicitors on 01206500181

Residential Conveyancing

We take great care to provide legal advice of the highest standard on your property matter, whilst simplifying the procedures and removing the stresses involved in buying, selling or remortgaging your home. We work closely with agents and other property professionals to ensure that you are kept fully informed through each step of the transaction.

We handle:

Sales and Purchases · Freehold and Leasehold · Buy to Let · Shared Ownership · Key Worker Schemes · Right to Buy · Mortgages and Remortgages · Buying and Selling at Auction · Equity Release Schemes · Transfer of Equity · Lease Agreements · Tenancy Agreements · Purchase of Freehold for Lessees · Altering Lease Terms · High Value Transactions · and more

Mortgages and Remortgages

We ensure that mortgages and remortgages are processed quickly and efficiently. Working closely with mortgage brokers, building societies, and other property professionals, this level cooperation ensures that our clients are kept fully informed throughout the transaction, and we aim always to minimize the the stresses and delays that sometimes can occur.

Lease Extensions

Where a person has owned a leasehold property for at least two years, the law affords that person the right to extend their lease. The cost of extending the lease is laid down by legislation designed to protect property owners from unscrupulous landlords. This may be of interest when offering a property for sale, as a lease extension may increase the property’s marketability and value. We provide expert legal advice in relation to lease extensions.

Frequently Asked Questions

HS Legal Solicitors

FAQ’S

We hope that our website helps to explain the conveyancing process in relation to your property transaction. Below are some commonly asked questions and their answers which may assist you further.
In the event that you require any additional information please do not hesitate to contact us.Call us on 01206585050 or email us info@hs-legal.co.uk

Q-Will I need to go into the Conveyancer’s office to sign all relevant documentation?

In the majority of circumstances it is not necessary for your Conveyancer to see you in person. All issues can be dealt with by correspondence, either by email, letter or telephone. The distance between you and your Conveyancer is therefore of no relevance in relation to your property transaction.

Q-Will I be able to speak to my Conveyancer whenever I need to?

Your personally allocated Conveyancer, or a member of his or her support team, should always be available for you to speak to during normal working hours. The response time for returning calls in relation to messages left is a maximum of four hours. You will have at least three points of contact available to you when you call.

Q-Why should I use Property Transaction?

We offer a personal, friendly and effective conveyancing service. Our aim is to provide you with a proactive service that puts you in a position to proceed to completion as soon as possible and in accordance with your instructions. Our key service products include:

  1. Our Conveyancers provide a fast, effective and efficient service
  2. We offer free, quick and easy Conveyancing Cost Estimates
  3. We offer a No Move – No Fee Product
  4. We provide Free sellers packs
  5. We provide Online Case Tracking 24/7
  6. Our Conveyancers deal with 99% of all UK Mortgage Lenders

Q. Just what is conveyancing?

Many of you who have bought or sold property will have certainly heard of conveyancing. However, how many people actually understand what the process involves, or, for that matter, what solicitors actually do for our part?

In its simplest terms, conveyancing is the process of transferring ownership of property or land from one person to another. In reality it is a little more complex and a lot more bureaucratic. There are many, many standard forms and documents to contend with.

For a comprehensive look at the conveyancing process – from start to finish – please take a look at our Conveyancing Guide(link is external)

Q-Thank you for your advice on Conveyancing but I’m still confused about the costs involved in buying a home. Please can you help?

The cost of conveyancing can essentially be divided into two parts; the legal fee, which is the actual fee the solicitor charges for doing the work and the disbursements, which are the expenses incurred on your behalf, and are paid to third parties, such as Land Registry fees, Stamp Duty Land Tax if applicable and searches.

There are very clear rules as to what is a legal fee and what is a disbursement, make sure that there are no additional ‘legal fees’ tucked away in the disbursements. I can only speak for our firm here but we will always provide a clear and transparent quote before you instruct us. This will include a breakdown of all fees, including the standard disbursements for your transaction based on the information we have at the time. By way of example, at HS Legal Solicitors our legal conveyancing fees start at £399 for first time buyers and go up from there in clear fixed brackets, any disbursements are then added to the top.

Fees and disbursements will only ever change if something comes to light during the Conveyancing process which was unforeseen at the time the quote was given. A good solicitor will always contact you before incurring additional expenses on your behalf.

On top of the legal fees there are other costs that you need to consider:

  1. Mortgage administration fee – Charged by most mortgage companies, this is basically a processing cost and can vary from a few hundred pounds to a few thousand but should be made clear to you at the outset of arranging your mortgage
  2. Mortgage valuation fee – They have your property independently valued, you pay for it. Normally a few hundred pounds.
  3. Moving costs – Whether you do this yourself to save money, or employ a professional will depend on the amount of furniture you have and how much stress you want on completion day.
  4. What is the difference between a survey and searches?

In the somewhat confusing world of conveyancing, these two items quite often get mixed up. They both provide a better understanding of the property being purchased, they will normally cost the client money and, of course, they both begin with the letter “S”; they are however quite different but equally important elements:

Survey

If you are using a mortgage to purchase the property, a basic mortgage survey (a “valuation report”) is undertaken to ensure that the property you are purchasing meets the value of the loan that the mortgage company is lending you. In other words, does it offer them sufficient collateral to lend against or, if they had to repossess it , can they get their money back? They arrange this and administer this, but you pay for it.

Although this survey will highlight any significant defects that the property might have, it is not the best way of ascertaining the property’s overall condition or value, and a further problem with such a valuation report is that it is prepared for your mortgage company’s purposes only – you cannot rely on it if there is a problem in the future. If you wish to know more about the property, you are naturally at liberty to instruct a more detailed survey, again at your expense. Here you can have a Home Buyers Report (which is much more detailed) or even a Full Structural Survey (which is even more detailed), any problems will be highlighted and advice given from the surveyor.

Remember that buying a property is probably the most expensive purchase you will ever make – it is worth spending a couple of hundred pounds on a decent survey to ensure that what you are buying is not only correctly priced, but also, that it is not going to cost you thousands of pounds in maintenance bills as soon as you move in.

Searches

Searches are simply a set of enquiries that your solicitor submits to various third parties that include Local Councils, the Environmental Agency, the Coal Authority and Water Authorities. They are called searches because your solicitor is asking those organisations to search their records for information about the particular property you are buying. The type and number of searches vary according to what and where you are buying, although if mortgage finance is required, searches will usually include: –

  1. Local search – this is carried out by your solicitor with the Local Authority and will confirm if there are any Local Authority Land Charges relating to the property (such as improvement grants or Smoke Control Orders etc); the Building Regulations and the planning history for the property, if roads are adopted (i.e. maintained and repaired by the highways department, as opposed to private roads which are down to the owner or a private management company to maintain); whether it is a listed building and whether there are any proposals for a motorway at the bottom of your garden, etc. If any entries are revealed on the search, your solicitor will then make further enquiries with the sellers’ Solicitors to investigate any issues on your behalf.
  2. Environmental Search – this is a commonly used search that will identify risks within 500 metres of the property and will reveal the history of the site on which your house has been built. It will check if it has been built on a waste or landfill site, and if the property is within a flood plain. This search is required by most mortgage lenders. Again, if problems are identified, your solicitor will raise this with the sellers.
  3. Water & Drainage Search – this is carried out with the local water authority, and will confirm to your solicitor if the property is connected to the main drains and whether the property is on a water meter or not. It will also reveal if there are any public sewers within the boundaries of the property, or nearby, which could affect future development or building work.
  4. Chancel Repair Search – this will show whether a property has a potential liability to contribute to the cost of repairs to the chancel of a local mediaeval church. Unfortunately, there is no readily accessible central database to identify properties with chancel repair liability and existing records are incomplete. In some cases, liability will be shown on the register for the property at the Land Registry, but this is not always the case.

In certain circumstances, if you are purchasing in a certain area of England or Wales, your solicitor will undertake additional specialist searches, for example mining or flood searches. The costs of these searches can vary, but generally you should budget for about £200 for a local search, drainage search and environmental search.

Q-Do the searches explain where a property’s boundaries lie and will they help resolve a boundary dispute?

Boundaries and boundary disputes are an extremely complex area of property law. Boundaries are illustrated on the Title Deeds and the Land Registry plans, however this does not make the illustrations definitive or legally binding.

Many people believe that the boundary between theirs and the neighbouring properties is defined by the Land Registry plans. However these are not intended to determine the actual line of boundaries. They are drawn generally and with thick lines separating the properties. It is therefore often difficult to ascertain boundaries, and they cannot be relied upon to move or re-establish boundaries.

There is also a common misconception that the boundary runs in a straight line between the properties. However, this is often not the case: boundaries differ and vary over time; moving slightly or changing direction due to the removal and/or replacement of the physical boundary, agreements between previous owners of the property and various other factors.

The general lack of any definitive boundary representation means that most boundary disputes have to be resolved by the instruction of an expert (usually a surveyor) who will consider the Title Deeds the properties concerned and various other indicators such as old photographs, witness evidence and the actual property itself (including any old boundary markers such as posts) to determine where they believe the boundary is. However, it is of course possible that one person can instruct an expert who determines that the boundary is in a particular place, only for the neighbour to find another expert who believes it is in fact somewhere else. This ‘grey area’ is why a lot of these cases end up in the Courts, leaving it to a Judge to make a decision based on all of the evidence as to where the boundary is – the legal declaration by the Judge as to the location of the boundary is only then definitive.

However, litigation through the Courts should be used as a last resort. It is often better for most boundary disputes to be resolved through mediation or a ‘meeting on site’ of experts. If you are thinking of moving a boundary or you wish to object to your neighbour doing so, specialist advice should be sought. Disputes with neighbours should be avoided, and boundary disputes can be arbitrary, stressful and can last a number of years – and importantly, they can cost thousands of pounds to resolve. Therefore, it is always wise to check the position with regards to your boundary before making any changes. A good property solicitor is the best place to start.

Q-How long does the conveyancing take?

The simple but rather unhelpful answer is that it is ‘as long as a piece of string’. If everything is in your favour with a freehold property, no chain or finance required and the property is empty or sold with ‘vacant possession’, a conveyancing transaction can literally be wrapped up in a few days. At HS Legal Solicitors we have even been known to turn them around in under 3 weeks. However, unfortunately we don’t live in an ideal world and at virtually every step throughout the process there is an opportunity for delay. Searches and enquiries can raise issues that need clarifying. You may be surprised (!) to hear that banks and lenders can prove to be somewhat awkward and, particularly in these austere times, getting the blood out of the proverbial stone can prove very difficult. Then there is the chain, a common problem, where the ability to reach exchange and completion is out of your hands; the chain moves at the speed of the slowest party.

So to get back to that ‘piece of string’. A general conveyancing transaction should on average take no more than five or six weeks to get from the point of initial instruction to exchange and a further week or so from there to completion. You can assist this process by having all your ‘ducks in line’; complete and return paperwork to your solicitor as promptly as possible and have your finance agreed in principle for the amount of the property you are looking to buy. Communicate with both your solicitor and estate agent, be honest and, within realistic reason, demanding too; you pay the bill so let them know what you want

Q-How can Chains delay matters?

Delays in a property sale or purchase are more often than not caused by breakdowns in ‘the chain’.

A property chain is quite simply where there are more than two parties involved and their sale and/or purchases are interdependent, e.g. you are selling to someone who is in turn selling to someone, who is in turn selling to someone etc etc. Here, the old adage applies, in that you are only as fast as the slowest member of the team; however in this ‘team’ not only do you have varying speeds, there will be different objectives, schedules and consequent levels of honesty.

If you can appreciate the host of issues that can cause a delay to your own conveyancing transaction and multiply that by the members involved in the chain, and their many individual agendas, you can begin to understand why most multiple property transactions do not run smoothly and why property solicitors are greying or, like me, getting a little thin on top. It takes a huge amount of time, diplomacy and patience to progress chains. Like many solicitors, at HS Legal Solicitors we actually employ a number of tenacious individuals just to do this. Finally even when all parties are ready, it only takes one person to move the completion date or even worse pull out and the whole chain can collapse like a deck of cards. But more of that next week.

It is not all doom and gloom, however, since although much of the chain is out of your hands, patience, honesty, organisation and a little persistence can help progress matters. Be realistic and talk to your solicitor and agent.

Q-What happens if the chain collapses?

Until all contracts are exchanged, there is nothing to stop individuals in a property chain from pulling out – the transaction is ‘subject to contract’ until the point of exchange. When this happens, as most people rely on the proceeds from their sale to fund the subsequent purchase, only one cancelled deal can quite often lead to the whole chain collapsing, leaving everyone in limbo, exposed and out of pocket.

If the chain breaks down, your solicitor will look to find out exactly why the party has pulled out and to see what, if anything, can be done to get things back on track. Is it simply a question of cold feet or is there something more significant, e.g. an unsatisfactory survey or financial complications brought about by job problems or a declined mortgage?

Renegotiation can quite often rectify matters. If it is money related, it may be that the other parties in the chain would be willing to help out in order to keep the chain alive. On rare occasions, some parties in the chain might accept a reduction in their sale price to ensure that another party is able to move, thereby not breaking the chain; and in other cases, it may be that the estate agents agree to reduce their commission to be able to pay a financial incentive to one of the parties.

If you’re selling and the buyer drops out, keep solicitors and everyone in the chain informed while you search for another buyer. Remember to be fair with the price and honest about the condition of the property as this will generally keep the surveyors happy and the purchasers calm and constant.

If you’re buying and your financial situation is jeopardising the sale, try renegotiating a lower offer with the seller. Obviously be prepared for a ‘no’ but it never hurts to ask.

Finally if the chain does fall apart, and at worse you end up without a buyer for your existing property and you lose out on your new ‘dream’ home, be practical. If your property was right for one person it’ll be right for someone else and, in my experience, invariably another ‘dream’ home will pop up too. Speak to the local estate agents; they will know that you are serious, organised and keen to proceed.

Q-What are gazumping and gazundering?

When the sale price has been agreed between buyer and seller, but the contracts have not yet been exchanged on the property, there is still the opportunity for a third party to offer the seller a higher price. When the seller accepts this offer, and subsequently withdraws from the sale to the original buyer, the third party has ‘gazumped’ the original buyer. This has severe consequences for the original buyer, in that not only do they lose out on the property they wanted, but they may well have incurred significant costs including surveys and legal fees. Furthermore they have no redress against either of the other two parties for these sums – every sale and purchase transaction is ‘subject to contract until formal exchange of contracts takes place.

As is a common misconception, this scenario does not usually come about through the estate agent’s desire to maximise their commission by obtaining a higher sale price for the property. Yes, they are keen for you to maximise the sale price of your property but that’s what you pay them for. In actual fact, they are very much just doing their job; an estate agent has a legal duty to inform the seller of all offers made on their property. This includes offers made after another offer has been formally accepted. An estate agent can legally give guidance but can never recommend and it is entirely at the seller’s discretion as to whether they accept the higher offer or not.

It is worth noting that the highest price does not always win and there are cases where a seller, having received higher offers, sticks to the original lower one because the transaction is proceeding well or they simply felt it was the right thing to do. Also a new entrant is not always a bad thing – sometimes a ‘gazumper’ can save a chain. If an original buyer is dragging their feet or looking to ‘gazunder’ the deal (see below), the transaction and reliant chain can quickly fall apart, however a new buyer, with the means and intent to proceed, can save matters for all parties. As a buyer, what can you do to lessen the chances of gazumping? If you have had your offer accepted, you can stipulate that, as part of the offer, the property be removed from the agent’s register and no further viewings allowed; you might also be able to negotiate an ‘Exclusivity Agreement’, where the seller effectively gives you the right of first refusal on the property, for a fixed period of time. However some sellers prefer to keep their property on the market until exchange of contracts, so that should the transaction fall through, they may have a back up buyer. An obvious point is that in paying the asking price you show your commitment and thereby dramatically diminish the likelihood of the occurrence of gazumping.

‘Gazundering’ is the other side of the coin where, at the last minute, the buyer refuses to go ahead with the sale unless the price is reduced. Again, there is nothing the seller can do about this apart from negotiate on the price or lose the sale. Here the estate agent should negotiate on the seller’s behalf, or failing that, will attempt to find you a suitable new buyer with all possible haste. Fortunately gazundering is rare but current market conditions dictate that there is often greater price negotiation and the buyers have greater leverage.

Q. With broken chains, gazumping and gazundering on the increase, what will I be charged if my transaction falls through?

Buying or selling property comes with a certain amount of risk and this includes the possibility that the conveyancing transaction can fall through due to factors beyond your control. Unfortunately when this happens, more often than not, costs relating to this will have already been incurred.

If this happens through reasons outside your control, most solicitors will charge a reasonable proportion of their fee relating to the amount of work that they have undertaken, plus any expenses or disbursements that have been incurred at that time. I can only speak for my firm here, but at HS Legal Solicitors, we would certainly look to do this, therefore with us, the cost to you is dependent on what the stage the transaction reached.

Alternatively we also offer a ‘Fair Deal Conveyancing’ scheme, where we are able to guarantee that, if your sale doesn’t proceed for reasons outside your control, you won’t face the expense of our fees for dealing with your abortive transaction – you will only have to pay for the disbursements that we have paid out on your behalf, such as search fees etc. In this way, at least you can minimise the costs associated with the risk.

It is always best to clarify with your solicitor at the outset what their policy is on abortive transactions. This information should also be included in their Terms and Conditions. Remember to pay particular attention to the division and payment of both fees and disbursements.

Q-What do we have to pay as deposit?

Discussion of deposits can often cause confusion as during a conveyancing transaction there are effectively two types of “deposit” that most people refer to. More commonly, when people refer to the deposit they are using to buy a house, they are referring to the sum that is the difference between the amount being borrowed from their mortgage lender and the actual purchase price of the property. It is usually privately funded by the buyer although it can also be lent by a third party, e.g. family member. However, when a solicitor refers to the deposit, they mean something very specific; namely the sum the buyer pays as a down payment on the property when contracts are exchanged. The balance of the purchase price for the property is then paid on the completion date.

In theory the deposit should be 10% of the purchase price, however the amount actually paid will depend on the transaction type and the amount that is being borrowed, e.g. with a 95% mortgage it is sometimes possible to pay only a 5% deposit at exchange of contracts. The actual amount payable will be negotiated in advance by your solicitor. Also, in chains of transactions, the deposit tends to be passed up the chain, so effectively the buyer at the very bottom of the chain physically pays a deposit based on his or her purchase price, and then this money is used as a deposit by all other parties in the chain.

If you are purchasing a property, your solicitor will request the deposit when they send all the contract paperwork to you for signing. When both parties have signed and ‘exchanged’ their respective contracts, your solicitor will pass the deposit over to the seller’s solicitor. They then keep the deposit until the completion date and this is then offset against the purchase price. You can pay your deposit by cheque, electronic bank transfer, or bank draft. However, you should note that if you pay by cheque or even bank draft, your solicitor will have to wait for your money to clear through the bank account – this may therefore delay exchange of contracts by up to 5 working days.

Q-What exactly happens when you exchange contracts?

Exchanging contracts is very much a “does what it says on the tin” moment. In the old days, your solicitor would physically take your signed contact and deposit cheque round to the office of the other solicitor, and would then swap, or exchange, contracts with the other party’s solicitor. Nowadays, with the advent of telephones, computers and the like, thankfully exchange of contracts takes place over the telephone, between the two solicitors.

Following formal exchange, the Buyer’s solicitor will also transfer the buyer’s deposit (the money that you pay at exchange) to the seller’s solicitor. This is usually non-returnable and acts as security for the seller in case you either cannot or do not want to complete. If that happens, the seller may be able to keep your deposit, and may take you to court to recover any additional losses arising from the breach of contract.

With contracts exchanged, both solicitors will arrange a convenient date for completion. They will then begin to make final preparations, ensuring everything is in place by that date. This includes:

  1. Land Registry – The seller’s solicitor will have sent a copy of the registered title for the property at the start of the process. Now they will do a final check to make sure that nothing has changed.
  2. Transfer deed – This is the document that records the buyer as the new legal landowner in the Land Registry. The buyer’s solicitor will prepare this before completion, and send it to the seller’s solicitor.
  3. Money transfers – The buyer’s solicitor will make the final arrangements for payment of the outstanding funds. This includes receiving any mortgage money for their lender.
  4. Final accounts – Your solicitor will prepare the final accounts for you. These will include details of any further money needed from you to complete. If you are taking out a mortgage, your solicitor will draw down the loan amount from the lender in time for completion.

You need to ensure that you fully understand what is being asked of you; exactly what is required and when. In particular make sure you have access to the appropriate funds when required. If you have any questions, ask

Q-What happens on the completion date?

Completion day is the day everyone has been waiting for; when the keys are handed over and the buyer gets to move in, and the seller, or their bank, gets the money for the property. A lot will happen on completion day and, as there may be multiple transactions working simultaneously within a chain, it is difficult to give a precise time as to what will happen when. At HS Legal Solicitors we always aim to complete around lunchtime, giving good time for you and your removal men to get in. However we would stress that the transaction is in the hands of other parties and the banking system, so it’s a good idea to take time off work or set a few hours aside to make sure everything goes smoothly.

The process will start with the buyer’s solicitor transferring the payment to the seller. When a mortgage is involved, this money will have been sent from the lender. In situations where there is a chain of transactions, money has to be sent from the buyer at the bottom of the chain, all the way up to the seller’s solicitors at the top of the chain; depending upon the length of the chain, it can take several hours for this process to be completed.

When the seller’s solicitor has received the funds, this is the point of actual completion of the transaction – they will send the transfer deed and any other important documents to the buyer’s solicitor. At a more practical level they will also release the keys to the property. These are usually picked directly up from the Estate Agent that has been managing the sale. If there is no Estate Agent you would make arrangements direct between the seller and the buyer.

The buyer’s solicitor will complete a tax return for the stamp duty land tax, and will pay any Stamp Duty that you owe for your transaction. They will then arrange for the Land Registry to record you as the owner and to register the lender’s interest (if any) as a mortgagee.

Q-When should I insure the property?

At the point of exchange of contracts, the “risk” of the property usually passes from buyer to seller – this means that, although the buyer doesn’t yet have access to or rights over the property, they are responsible for it, so Buildings Insurance is required. This provides cover for the building and gives the buyer, and their mortgage lender, adequate protection should anything happen to the property prior to completion that may cause serious damage. Please note, this is irrespective of whether or not the seller still has the property insured.

There is no absolute requirement for you to insure your property, but if you do not do so, you will be taking something of a risk; it may also be the case that, if you are taking out a mortgage, your mortgage lender will require buildings insurance to be taken out before the loan is completed. Similarly, there is no obligation for you to insure your personal possessions by means of a contents insurance policy, but again, you would usually be advised to do so.

Ideally Building Insurance should be arranged prior to the exchange date so that it can be ‘put into force’ and begin to provide cover from this time.

Although it is very rare, there are cases where properties have been completely destroyed between exchange of contracts and completion – in such a case, the buyer is still obliged to complete the purchase and to pay the money due on the completion date, even if the house is now effectively a pile of rubble. The Buildings Insurance policy will then have to pay out for the property to be rebuilt where possible.

If you are purchasing a new build property, the Buildings Insurance should usually be put into force once the property is completed – the builder’s own insurance policy covers the property until the completion date.

Also, if you are buying a leasehold property, you will normally find that the freeholder (the “landlord”) insures the whole building, and each leaseholder in the building has to pay a proportionate part of the annual premium. In such a situation, there is no need for you to take out your own building insurance policy for the flat – although you would still be advised to take out a policy to cover your home contents.

Q-How can I get a mortgage?

Certainly a topical question and one that offers a more complex answer than I certainly can provide. However, although I am not a financial adviser, having worked in property for many years, I will do the best as I can. Certainly not financial advice but perhaps layman’s guide.

To start with, when a bank or building society is looking to lend you the money to buy your home, they will basically look at three things:

  1. The overall value of the property
  2. The amount that is being lent against that property
  3. Your ability to make repayments on that loan

The overall property value and the amount that can be lent against it, are important as they determine the lender’s security in the property. So, although the property is your home, it is their collateral; if they needed to repossess it they have to ensure that when sold it is of sufficient value to cover the debt. Whatever amount is lent against the property value determines the Loan To Value (LTV), for instance if they lent £75,000 on a £100,000 property, with your deposit covering the other £25,000, the LTV would be 75%. At the moment lenders, being rather risk averse, are keeping the LTV’s relatively low, and certainly 100% mortgages appear a thing of the past. Generally the rule is that the greater the deposit, and lesser LTV, the better the mortgage product and associated interest rate.

The next key consideration for the lenders is your realistic ability to make repayments. Here they analyse your income; usually using multiplier based on your overall salary, or in the case of joint mortgages, you and your partners salaries. They also take into account any significant expenditure you may have and, of course, your overall credit rating.

So, by way of example, in its basic form, a mortgage provider may lend you up to 3.5 times your annual salary as a mortgage. If there are two of you then they usually have a slightly different formula, either a set figure of the combined salary, e.g. 2.5 times, or an unequal split, e.g. 3.5 times the first salary plus 1 times the second salary. These formula can be complex, they vary from lender to lender and from mortgage to mortgage so please check.

To summarise, the more you put in the better the deal. Shop around and I would always advise speaking to a professional financial adviser before proceeding.

Q-How do I know what fixtures and fittings are included in the price?

Prior to exchange of contracts, your solicitor will provide you with a copy of the list of fixtures and fittings. This will have been completed by the seller. Generally anything fixed permanently to the house should be included but the seller can take anything that they wish, e.g. carpets and curtains etc, so it is important to take time to check the list to ensure everything that you thought was, or wanted, included is.

It is also worthwhile gaining confirmation that those appliances included in the sale are in good working order. If you there is an issue with the fixtures and fittings list provided, you can negotiate directly with the sellers, via the Estate Agents or through your solicitors. Please note that whatever is decided you must inform your solicitor of variances to the list of the agreed sale price.

Q-When I’m buying, when do you require the final payment?

We request that we receive the final balance a few days prior to the moving date. You will receive formal notification of the preferred date in the contract paperwork. In requesting the funds well in advance, we give you time to organise your finances, and in obtaining them in advance we have the money in our client account ready to complete on time and avoid any delays (hard to believe but banks have been known to misplace money). If you think you may have an issue in making the final payment, always let your solicitor know as soon as possible.

Like many modern solicitors, at HS Legal Solicitors  we accept payment via bankers draft, telegraphic transfer or credit card.

Q-When my sale goes through, when would I receive my money from you?

When you sell your home, you are entitled to the remaining balance after you have repaid the mortgage loan the lender and covered any Estate Agency and legal costs arising from the sale. Provided the funds are clear, a good solicitor will arrange to forward this amount onto you on the day of completion or next day. If they don’t, you need to ask what they are doing with it.

At HS Legal Solicitors we can pay your balance by cheque or, like most modern solicitors, we can arrange an electronic transfer of the funds directly into your bank account.

Q-How do I buy a home with my partner?

There are essentially two ways in which you can buy a home with someone else, either as Joint Tenants or as Tenants in Common. Despite the term ‘Tenants’, this has nothing to do with renting a property; it’s all to do with how a joint share in the property is distributed if one of you dies.

Most cohabiting couples who buy together do so as ‘joint tenants’, meaning that both parties jointly own the whole property, they each have an equal share of it and if one partner dies their share of the property automatically passes to the other joint tenant or tenants. This is known legally as the right of survivorship.

With a joint tenancy, in most cases, even if you or your partner have made a will, irrespective of what the will says, the surviving partner will still receive their share of the property. If neither of you have made a will and one of you dies ‘intestate’, it means that the property and other assets will be distributed according to the ‘law of intestacy’ but the surviving partner will still inherit the property.

Alternatively, if you’re living together and owning the property as ‘tenants in common’, you don’t necessarily have equal shares; instead each partner has clearly defined shares that are separate from each other. You may think this is appropriate if you have made unequal contributions towards the purchase price and want this to be reflected on the sale of the property, or you simply want to have more control than Joint Tenancy allows. With this, if one of you dies before the other, the share of the person who has died doesn’t pass automatically to the other but instead passes according to the wishes of the Will the deceased partner made or the law of intestacy. In any case where joint owners of a property own as tenants in common, it is advisable to have a separate Declaration of Trust drawn up, to reflect either that you each own an equal share in the property, or alternatively, that you own different shares. This is a fairly inexpensive document to prepare, but can save thousands of pounds in legal costs in the event of a future dispute about who owns what.

With either ownership method, each partner has a legal share in the property, and generally, both have rights and obligations in respect of the property. For instance, if one partner moves out and stops contributing to the mortgage, the other will still have to keep up the payments. Equally the failure of one partner to meet credit card payments when registered at the property could affect the other. So beyond the simple structure of the home ownership, there are many other practical issues that need careful consideration and legal guidance.

Q-What needs to be considered when buying with a partner?

You have to give credit to anyone for dealing with this rather unromantic but nonetheless important aspect of a developing relationship. Changing social norms and financial causes are increasingly motivating couples to buy their home together before marriage and, while this does have a number of advantages, there are unfortunately certain misconceptions that can allow one or both parties to make ill informed decisions.

Buying a home with your partner is a significant step, both emotionally and financially, and it is important that both parties understand their legal position from the outset; not doing so can cause issues during the relationship and could critically affect their legal and financial circumstances should it come to an end. There are a therefore number of things to consider before you actually go ahead and purchase a property:

  1. What proportion of the property each individual owns?
  2. What deposit either party will be initially contributing?
  3. How the regular mortgage repayment costs are going to be divided?
  4. How the upkeep and maintenance costs to the property will be divided?
  5. When utilities and mortgage payments are due, how they will be paid and what will happen if one individual is unable to cover their share of the bill?
  6. Understand that things change. Unfortunately couples do split up. If so; who stays, who goes? How would the property be divided?

These changes have consequences. By way of example, if the property is in one person’s name only, generally in law the non-owner has no right to a share of the property. So it is necessary to think very carefully about how the house is to be bought and paid for in the long term and, in contemplating and addressing the unthinkable, what would happen in the event of a split. Equally, what happens if one person begins to contribute more than other? Consider the options, work out what is fair and how will this be reflected.

The answers to these practical considerations can avoid future complications and stress in the relationship. Be open and honest, and remember that although it is good to talk about these matters, this information needs to be documented in a formal contract, e.g. Declaration of Trust and/or a Cohabitation Agreement. It is also a good idea to make a Will at this time, as this will help you resolve and consider some more of life’s delicate questions.

Before finalising matters, it is always advisable for you and your partner to gain independent legal advice from a specialist solicitor.

Q-What additional legal protection is advisable when buying a home jointly?

Unfortunately most people do not consider their individual legal position within a relationship until that relationship breaks down. By then, trying to reach agreement is often clouded by financial and emotional baggage. However by simply analysing, agreeing and documenting your and your partner’s main considerations, e.g. assets and finances, much of the stress and cost can be removed from such a scenario.

A Declaration of Trust is a formal document in which you and your partner define your joint ownership of the property. However, a Declaration of Trust is limited to the actual shares each person has in the property at the time of purchase. If you wish to set out the facts and figures in greater detail, you would be advised to prepare a Cohabitation Agreement. The agreement can be defined as the parties wish but considerations might include the following:

  1. The percentage shares in the property.
  2. Initial deposits paid by either party.
  3. Whether it was bought individually before or jointly during your relationship.
  4. Ownership of particular possessions, either existing or those acquired while living together.
  5. How you will share the cost of the mortgage and bills relating to the property.
  6. Options for one of you to buy the other out of the property in the event of a split, how this is agreed and at what price.

Cohabitation agreements allow couples to regulate their relationship at the outset, providing certainty once the decision has been made to live together. Although consideration of such a formal agreement can prove difficult, any such discussions can bring openness and maturity to the relationship.

Although Cohabitation agreements are currently not legally binding, the Courts are increasingly placing weight on the contents and, if information has been shared honestly, there is more chance that they will hold each party to their side of the bargain. Equally, if both parties have received the benefit of independent legal advice, then there should be no question as to undue pressure in entering the agreement.

It is a flexible agreement and the contents can be as simple or as complex as you wish. It can include:

  1. Income and expenditure responsibilities,
  2. Sensible terms if one owns the home both intend to share,
  3. Plans for mortgage payments,
  4. Respective shares of the property (i.e. how the proceeds will be split if one partner dies)

Ante-nuptial agreements (commonly known as “Pre-nuptial agreements”) is a document in which a couple set out their rights in relation to any property, debts, income and other assets purchased together or acquired individually (e.g., through inheritance), or that they have brought into a relationship. They are now considered by many to be an important part of common sense, personal planning. By highlighting and discussing the base facts in a relationship can provide clarity, thereby avoiding potential thorny issues or disagreements in the future. The contents of a pre-nuptial agreement can vary, but they commonly include provisions for the division of assets if the relationship breaks down at a later date. Pre-nuptial Agreements are not currently legally binding, however the Courts will consider the Agreement along with all the other surrounding circumstances.

Legally, once married all of these assets become “matrimonial assets” and, unless specifically protected, are thrown into a single financial pot. The primary purpose of an Ante-nuptial Agreement will frequently be to limit the potential claims on the wealth of one of the parties to the marriage in the event of future divorce.

Anyone contemplating marriage should consider whether or not they need such an agreement and, as ever, with such significant matters it is always best to obtain specialist legal advice.

Q-If a family member dies and how do we sell the house?

The actual conveyancing procedure is the essentially the same, however before the sale can occur a number crucial procedural matters must be completed. Without going into too much detail about Estate Administration, the process basically involves implementing the deceased person’s wishes and the first consideration is engaging a solicitor to ensure that this happens. When there is a Will this will be undertaken in conjunction with the executors, if there isn’t then this will be in conjunction with the next of kin.

Usually an executor won’t know much about the property itself so the forms that are normally filled out by the seller are usually left blank.

Q-What exactly are disbursements?

The cost of conveyancing can essentially be divided into two parts; the legal fee, which is the actual fee the solicitor charges for doing the work and the disbursements, which are the expenses incurred on your behalf, and are paid to third parties, such as Land Registry fees, Stamp Duty Land Tax if applicable and searches.

There are very clear rules as to what is a legal fee and what is a disbursement, make sure that there are no additional ‘legal fees’ tucked away in the disbursements. I can only speak for my firm here but we will always provide a clear and transparent quote before you instruct us. This will include a breakdown of all fees, including the standard disbursements for your transaction based on the information we have at the time. By way of example, at HS Legal Solicitors our legal conveyancing fees start at £350 for first time buyers and go up from there in clear fixed brackets, any disbursements are then added to the top. Fees and disbursements will only ever change if something comes to light during the Conveyancing process which was unforeseen at the time the quote was given. A good solicitor will always contact you before incurring additional expenses on your behalf.

Selling Residential Property

Residential Property Solicitors at HS Legal Solicitors can assist with all areas of selling a home. Call us on 01206500181 or contact us online.

When selling a property you need to make sure that you choose a law firm that can deal with a range of areas within property law. We deal with all aspects of residential Freehold and Leasehold conveyancing, including re-mortgaging, transfers of equity and equity release schemes.

Selling property can sometimes be a daunting process particularly for people who are not familiar with the process. We pride ourselves on making your transaction run as smoothly and as stress-free as possible.

Residential Property & Conveyancing Legal Advice

Our friendly conveyancing team are here to answer any questions that you may have throughout the selling process and beyond. Unlike some law firms, we believe in a personal approach and you will have a dedicated property Solicitor who will answer any questions about legal advice when selling a property. You should be able to speak to your Solicitor each time you contact us so that any questions you have can be answered straight away.

Legal Considerations when Selling a Property

A few things that you will have to consider:

  • The Property Selling Process
  • Exchanging Contracts
  • Other Considerations

The Property Selling Process

On the “completion date,” you should receive the money and sign over the property. The buyers are entitled to move into possession of the property they have bought free of you, your family, any claims on the property and any of the property’s contents at all; apart from any they have agreed to buy, which must, of course, remain there.

Exchanging Contracts

The date, the price and the terms on which the property is taken are formally agreed and become binding from the date on which your Solicitor, “exchanges contracts” with the buyer’s Solicitor. On this date, a deposit is usually paid to us by the buyer. If the buyer fails to complete the purchase you will probably be entitled to retain the deposit and the property. If you fail to complete, the buyer will recover his deposit and you will also face a substantial claim for compensation.

It is clear then that exchange should only take place when you are confident that you can vacate the property and the buyer is confident he wants to buy the property that you are offering to him and he will be able to pay the price. It is therefore convenient to consider the following matters that must be dealt with before exchange from the perspective of what the buyer needs to know before he will give his solicitors instructions to proceed.

After the exchange, you have an obligation to ensure that so far as is reasonable the condition of the property remains the same. You should not cancel your insurance cover until completion unless we advise you to do so.

Other Things to Consider

Most sales of properties proceed smoothly, but you can see the risks involved and the possibility that the buyer will not be able to proceed and will, therefore, withdraw before exchange of contracts. For this reason, you may decide you want to keep advertising the property until exchange of contracts in the hope of securing an alternative buyer if the present buyer drops out. However, the buyer may object to this in which case you and your agent will need to resolve this matter.

When you have sold your property this may be the perfect time to update some of the other legal documents that have been affected such as your Will. We can also assist with tax planning which will make the most of your money.

Call our Residential Property Solicitors on 01206500181

Remortgage a Residential Property

For expert legal advice about remortgaging a residential property, call HS Legal Solicitors on 01206500181 or contact us online.

A remortgage should be a very smooth process. Once you have instructed us and you have notified your lender that we are to represent you, your lender will process your mortgage offer.

Once the offer has completed, the lender will send you your part of the mortgage offer and send the firm Solicitors to copy detailing their instructions.

What is Remortgage?

A remortgage is where you take out a new mortgage on a property you already own – either to replace your existing mortgage or to borrow money against your property.

Around a third of all home loans made in the UK are actually remortgages. Homeowners remortgage for a variety of benefits including:

  • To release equity from a property
  • To consolidate debts
  • To move to a better mortgage rate
  • To save money

 

Five Reasons to Remortgage

There are a number of reasons that people look to remortgage, and these reasons will naturally then affect which remortgage deals are appealing.

•    To Get a Better Rate

If you’re thinking about remortgaging to get yourself a better interest rate, an alternative mortgage deal may well have a considerable impact on your outgoings. If you’re currently on a fixed rate but the period for this rate is soon ending, it’s understandable that you might want to shop around.

•    Debt Consolidation

Debt consolidation is one of the main reasons that people consider remortgaging. If you’re a homeowner and have multiple debts that you’re struggling to keep on top of, it can be tempting to acquire funds using your home as security, to clear these debts. However, you should always think very carefully before securing borrowing with the property, as this will naturally be at risk if you fail to meet the repayments.

•    Home Improvements

Many people remortgage to gain funds to carry out home improvement work to their property. This is often seen as a sensible option, as any improvements you make to your home may well increase its value in the long term. Spending in this way is, therefore, an investment in your property as you will likely see a return on it at some future date.

•    Changing Financial Situation

Many people, especially in today’s troublesome economic climate, find that they’re simply unable to keep up with their outgoings for whatever reason. Whether you’ve had a change in circumstances due to illness, a job loss or personal reasons, you can easily find yourself in a position where your mortgage payments are just not possible.

If this applies to you, you should ideally speak to your current lender, and see if there are any alternative suggestions that they have. Remortgaging is just one of the options that may be available to you.

•    Equity Release

If your home has risen in value during the period of your mortgage, you may well want to see the benefit of this value through equity release. Remortgaging is one of the ways you can do this, as it can be built into the terms of the deal; however, it basically amounts to further lending on your property, and should therefore not be entered into lightly.

How we can help with Remortgage?

In most cases of remortgaging, and if you are changing to a different lender, the lender will require us to carry out a Local Search. We can submit searches extremely quickly as we use an internet-based system which advises us of the date on which the search will be returned.

Some lenders, however, allow us to take out “search indemnity insurance” which is an insurance policy which covers the lender against any adverse entries which could be revealed on a Local Search. This is a much cheaper option and we will always check with your lender to see if they will accept insurance rather than carrying out a Local Search.

Once the search result has been received and search insurance has been obtained, we can report back to you on your new mortgage offer and send you the appropriate mortgage deed for signature.

When you have returned the mortgage deed to us, we can order a redemption statement from your current lender for the date of completion and provide you with a completion statement.

On the date of completion, we will redeem your current mortgage and send any balance to you. We will then register the new charge over your property and once the Land Registry has completed the registration, we will supply you with a copy of the title deed for your information and send the original to your lender for retention.

Call our Residential Property Solicitors on 01206 500181

 

Buying Residential Property

Residential Property Solicitors HS Legal Solicitors deal with all aspects of residential Freehold and Leasehold conveyancing, re-mortgaging, property transfers of equity and equity release schemes. Call us on 01206500181 or contact us online and we will call you.

Buying a residential property can be a daunting process, no matter what the property law transaction. We pride ourselves on making your transaction run as smoothly and as stress-free as possible.

Our friendly conveyancing team are here to answer any questions that you may have. Unlike some law firms, we do not believe in a “team” approach but believe that the personal service we offer is better for you. You should be able to speak to your Solicitor each time you contact us so that any questions you have can be answered straight away.

Legal Aspects to Consider when Buying a Property

If you are buying a house, you should be aware of a range of legal aspects that may affect that property.

Legal advice on buying a residential property:

  • The Property Buying Process
  • Property Searches
  • Legal Considerations
  • Tax Issues

The Property Buying Process

The day on which you pay the money and move into the property is called the “completion date”. To enable you to make the financial arrangements and arrange for moving at some time before completion, a deal is struck whereby the price and date and the machinery of completion are agreed.

This is done formally by document and is called “exchange of contracts”. Until that date, either party is free to withdraw from the transaction with impunity.

And please before buying a house note:

  • The seller is obliged only to take reasonable care of the property.
  • You have to pay part of the purchase price to the sellers’ solicitors. This “deposit” will probably be forfeited if you fail for whatever reason to complete. It is therefore vital that before we exchange you are confident that you will complete.

Property Searches

In order to protect you and your lender, we are required to carry out searches on the property you are proposing to buy. These include:

  • The local land charges register, which details any obligations owners to have to the local authority or government. Once a search is completed you will receive an official search certificate.
  • Other local authority records, such as planning decisions, road building proposals and rights of way. You should check how wide an area the search covers and, if possible, look around for yourself or check the internet. It is often the slowest part of the transaction, apart from securing the mortgage offer.
  • Drainage and water services to the property detailing whether wastewater goes into a public or private sewer.
  • The environmental search, which investigates whether the property is on contaminated land or at risk from other environmental factors, such as flooding and subsidence.
  • An optional planning search with details of local planning applications, the location of nearby phone masts and general information about the area, such as council tax bands and local amenities.
  • An optional chancel checks search to find out if the property is at risk from a potential Chancel repair liability (repairs to the local church).

Once positive replies to the above questions have been obtained we will then be in a position to exchange, provided you are able to send us the monies to fund the deposit payable on the exchange.

Legal Considerations when Buying a Property

The time of buying a house is probably the time to re-consider your Will and Inheritance Tax issues generally. We have a dedicated team who can advise you on these matters and this could save you problems later on.

Tax Issues when Buying Residential Property

If, should you eventually sell the property, it has risen in value, you may have to pay Capital Gains Tax on the difference between what you receive for the property and what the property cost to acquire, improve and sell, after allowing for inflation. If the house is your main residence then no Capital Gains tax is chargeable at all, but you should bear in mind that you are only entitled to have one main residence.

Call our Residential Property Solicitors on 01206500181