Conveyancing is the legal name given to the transfer of a property from one person to another. The property is normally freehold or leasehold. Most houses are freehold and most flats are leasehold.
In England & Wales conveyancing is usually dealt with by either a conveyancing solicitor or a licensed conveyancer. From as early as 2007, the provision of an Energy Performance Certificate (EPC) has become a legal requirement for anyone responsible for marketing a property for sale or rental.
The conveyancing solicitor or licensed conveyancer acting on behalf of the buyer must ensure that he or she obtains a “good title” to the land – i.e that the person selling the property has the right to sell it and there is nothing that would prevent the buyer from obtaining a mortgage or re-selling the property at any time in the future.
Under English & Welsh law an agreement for the sale of land is not legally binding until “exchange” of contracts. This is the point where the transaction becomes legally binding. Before this both parties have the advantage of being able to withdraw from the transaction but also the disadvantage of wasted time and expense in the event that an exchange of contracts does not eventually take place.
The ability to withdraw prior to exchange at any time and for any reason without obligation to each other can lead to a risk of what is commonly known as “gazumping” (where the seller increases the price before exchange) or “gazundering” (where the buyer submits a lower offer prior to exchange).
The normal practice is for the buyer to negotiate and agree a price with the seller, often via an Estate Agent.. The buyer usually then arranges a survey and the buyer’s solicitor subsequently carries out searches and pre-contract enquiries.
The seller’s conveyancing solicitor or licenced conveyancer also collects from the seller the information necessary to prepare a property information form which he or she then sends to the buyer’s solicitors or conveyancer.
It usually takes approximately 10-12 weeks to complete a conveyancing transaction but this can be affected by many factors such as personal, social and financial circumstances.
When contracts are exchanged, the buyer and seller legally commit themselves to going ahead with the purchase on the agreed terms. This is the most important stage in the home buying process and at this time the buyer will also normally pay a deposit of up to 10% of the purchase price.
“Completion” is the date when the buyer’s solicitor or conveyancer hands over the balance of the purchase price and the buyer takes ownership of the property. At this time the buyer’s solicitor or conveyancer will also send to the Inland Revenue any stamp duty payable in respect of the purchase.
Legally completion is effected by way of a transfer deed which passes ownership of the property from the seller to the buyer.
After completion the signed and dated transfer deed is sent to the Land Registry which then changes the records to show the new buyer as the owner of the property.