Solicitors in Birmingham

What does a typical transaction involve?

Not all transactions are the same and are dependent on factors such as the nature of the property being sold, the nature of the title to the property, whether the house is being bought with a mortgage, amongst many more.  However, to give you an idea, the following steps generally need to be taken:

1.       The seller’s solicitor gets details with regards to the title (for example, it could be a freehold or leasehold and subject to certain rights and obligations – covenants, easements etc.) and drafts the contract.

2.       The solicitor checks the validity of the title; looks over the contents of the contract and undertakes any necessary/relevant searches (see below).

3.       Contracts are exchanged between seller and buyer and the buyer pays a deposit to the seller’s solicitor.  At this point, both parties must be committed to the contract otherwise either party will be subject to certain liabilities.

4.       A completion date is agreed upon and stated in the contract.

5.       Ownership is transferred when the sale is completed.  The buyer’s solicitor must collect any funds being used (such as a mortgage advance), those funds to the seller’s solicitor and, if appropriate, the seller pays off an existing mortgage.

6.       When the completion dates comes, all the funds for all the transactions involved must be cleared at the relevant banks.  When everything has cleared, the buyer is gains possession of the property.

7.       The buyer’s solicitors get the buyer registered at the Land Registry.

What do you mean by searches and do I need to undertake them?

Searches, which tend to take up the bulk of conveyancing work, reveal hidden information about the property you intend to purchase and help you understand any risks and liabilities associated with it.  If you are not taking out a mortgage, you can decide what kind of searches you wish to be carried out, if any at all, although we recommend that you do.  If we are acting on behalf of you and a lender in cases where you have taken out a mortgage, then we will have to do searches which we consider essential to protecting the lender’s interests as well as any searches you personally request.

What types of searches exist?

Local search – this search gives information from the Local Authority and is used to reveal any planning consents connected with the property; whether the property is in a conservation area or is a listed property. Recommended for most properties.

Drainage search – this search gives information with regards to drains and sewers. Recommended for most properties.

Mining search – if the property is in an area where there is a history of mining, your solicitor will have to undertake this search to make sure the property is not at risk of subsiding due to the collapse of old mines. Recommended for properties in mining or ex-mining areas.

Environmental search – this search will show whether or not the property has been built on polluted land, such as former landfills, waste sites, unstable or industrial land.  This search will also reveal whether the property is at risk of flooding, subsidence, contamination from radon gas and other pollutants.  The area covered by the search is generally 500 metres.

Plan search – this will provide information with regards to any developments in the area surrounding the property and details of planning permission if appropriate.  A Local search will not provide this information.

Chancel search – very rarely, you might be dealing with a property where you have to pay towards the costs of maintaining and repairing pre-reformation churches.

Checklist of practical items  to deal with before completion

• Post Office Re-direction
• Notify Gas
• Get electricity meter read and alert supplier to change
• Deal with water
• Advise telephone supplier
• Notify Council tax
• Contact Sky / Cable tv suppliers
• TV Licensing
• Broadband
• Ensure DVLA are aware of change of address
• Car Breakdown Cover
• Car Insurance
• Bank and/or Building Society
• Credit / Store Cards
• Loan companies
• InlandRevenue
• Accountant
• Any Pension Provider
• Passport Office
• Doctor and anyPrivate Healthcare
• Dentist
• Optician
• Health Club / Gym
• Newspaper / Magazine Subscriptions
• Work
• Friends & Family
• Gas Cooker Disconnection
• Contact occupants of new property to find out about transfer of utilities
• Make arrangements for childcare or pets
• Ensure keys are available for new house and get the alarm details if required.
• Consider changing the locks at the new property

What is a transfer of equity?

Equity in a property is the financial value of the interest, otherwise known as the beneficial ownership. A transfer of equity may or may not involve a change in the legal ownership as well as the beneficial ownership, but commonly involves someone being removed from or added to the legal title to a property. Commonly, transfers of equity will be accompanied by a remortgage.

The most common circumstances where a transfer of equity occur are :

• Divorce or separation – following divorce or separation it is common for one partner to be removed from the ownership of a house and sometimes also removed from liability to pay any mortgage. Often, there is a remortgage and a cash payment may be made insome circumstances to buy out the departing owners interest
• Marriage or living together – often where a new owner is added to the ownership and the legal title.

In situations where there is change or substitution of ownership of a property and there is an existing mortgage the lender must be asked to consent, and may charge a fee. This can cause a delay of several weeks on these types of transactions.

Do changes to a property require Building Regulations Consent ?

Where work is undertaken at a property, or it has been recently built, Buildings Regulations may apply in order to ensure that the methods and materials used comply with safety standards.  Where such consent was needed and was not obtained this is a cause of concern for a buyer and may prevent the transaction proceeding and enforcement action may also be a possibility by the Local Authority or Council. Even if a buyer considers the lack of consent as a minor issue, his, her or their solicitor will need to consider the matter from any mortgage lender’s point of view also, since the solicitor will commonly act for both buyer and lender.

What is a conservation area ?

A conservation area is an area protected by the Local Authority and whether a property is recorded as within a conservation area will be revealed by the Local Authority serach undertaken by the buyer’s solicitors. These properties can be subject to planning restrictions especially as regards the property exterior.

What is a contract race?

It is entirely lawful for a seller to be able to offers a property to more than one buyer usually on the basis that the first one to exchange contracts gets the property. However, the seller is obliged (by conduct rules governing his/her/their solicitor to inform all parties concerned if contracts have gone out to more than one Buyer and the terms of the race. If you lose out on a contract race you cannot claim your lost expenses from the Seller

What types of Survey are available and which is best ?

There are 3  main options:-

• A basic valuation – this is normally undertaken for the benefit of the mortgage lender even though the buyer pays for it, and is mandatory with a mortgage. It is a very limited report and really involves very little practical inspection of the property.
• A Home Buyers Report & Valuation – this type of report has to be undertaken by a qualified surveyor and is something of a “half way house”. It is worth being aware that even with this type of survey, in-depth inspection is not generally carried out.
• A Full Structural Survey -most buyers do not have such a survey because of the cost involved.  It will be an in depth report.

Is buying an ex-council flat a good idea  ?

There are some extra and potentiually expensive issues when buying such a property. As with all leasehold blocks, maintenance works are required on an ongoing basis, and these tend to be more expensive with ex-local authority properties, and such “major works” charges are also problematic because it is not unusual for a council to decline to provide reliable estimates of future planned works. Consequently, it is not unusual, when buying such a property, to find that there are works planned but the seller cannot provide reliable information about works which the council has advised will be undertaken but which have not commenced. One solution to this is to seek to agree a retention of some of the sale proceeds, so that the seller may contribute towards such works, but clearly, the seller will seek to resist such an arrangement.