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Conveyancing

Conveyancing is the process of legally transferring real property (i.e. land and buildings) from one owner to another. Traditionally handled by solicitors, now the process can be carried out paralegal conveyancers, building societies and banks, though it is also possible to do your own DIY conveyancing.

In the 19th Century, when there was a great deal of fraud in land transactions, when title deeds were a rarity and land registration was unheard of, only solicitors were allowed to prepare documents known as a "conveyance" to transfer ownership of land. This gave solicitors a monopoly and resulted in inflated fees - solicitors were not allowed to under-cut each other - in other words the process was anti-competitive and would not be acceptable in today's era or the Office of Fair Trading and the Competition Commission.

Comfortable professional monopolies, particularly in the legal profession, came under attack in the 20th Century under Margaret Thatcher in Britain and have now be largely curtailed. Land Registration introduced in 1925 replaces large bundles of title deeds with one single document known as a "Title Information Document" simplifying the whole process. As we enter the electronic era we are likely to see on-line electronic conveyancing very soon.

The legal transfer of title to real property (land) in Britain is different to that of other types of property: (1) the agreement must be in writing (whereas selling a car could be purely oral) (2) The actual change of ownership needs to be effected by Deed previously called a conveyance, but now called a "transfer" of registered land - hence the "exchange of contracts".

The process of buying a property and acquiring good legal title starts with the making of an "offer" to buy a property which is on the market for a certain price not necessarily the asking price - either directly to the owner, or through a property agent (Estate Agent)

If the sale is made through a property auction any offer made and accepted is immediately binding on the person making the offer. This is not the case under other circumstances - the offer does not become binding until the final stage of exchanging contracts - at any point before this parties can withdraw from the deal.

Once a formal offer is made, and accepted by the seller, letters are sent out by the agent to both parties setting out the details of the sale, and copies to both party's solicitors.  Where there is no agent it is up to the parties to inform their own solicitors.

This starts off the whole legal process with the purchaser's solicitor making search enquiries, the purchaser agreeing terms with the mortgage company and a valuation survey being carried out. Prudent purchasers will also at this stage arrange for a structural plus electrical and wood surveys on the property. These latter may involve the appointment of professionals, or experienced builders/trades people to check the property out.

Once the mortgage offer has been made and the other legal formalities completed exchange of contracts can take place. The contract will include a date set for the transaction to be completed (The completion date). This date is when the purchaser's solicitor authorises a money transfer to the seller's solicitor, and in return receives a Deed of Transfer.

The process is completed by the purchaser's solicitor registering the transfer at the Land Registry, and seeking payment for his fees and expenses from the purchaser before instructing the agent to release the keys to the property. The seller's solicitor will deduct his fees and expenses from the sale proceeds before arranging a money transfer to the seller.

Buyer Beware (caveat emptor) a Latin term an legal principle in English law involving property transactions. The purchase of regular goods is protected by the Sale of Goods Act - not so property. If you don't ask the question about defects the seller is under no legal obligation to reveal. For example, if the house floods on a regular basis the seller has no obligation to tell you this fact, unless you ask - then he must give a truthful answer. This is why surveys are so important - if the survey spots a defect, you would need to re-negotiate, if it should miss a serious defect, the surveyor is insured in anticipation of a claim from the purchaser.

Information here is general only & believed to be correct, though we cannot guarantee it, nor do we accept any liability if you act or fail to act on this information. Always seek professional advice before making decisions. Investments can go down in value as well as up over  time.