Property Services

Residential Property

Frequently Asked Questions on Residential Property

Q How much will it cost?

A We are unable to generalise here, but our conveyancing staff will be happy to discuss your particular requirements in detail on the telephone, and to provide you with a written breakdown of the legal fees and associated disbursements.

Q How long does it take?

A On average a straightforward transaction will take 6 to 8 weeks from start to completion. However you should bear in mind that any transaction can only proceed at the pace of the slowest party in the chain. The longer the chain, the longer it is likely to take to complete.

Q What is the difference between exchange and completion?

A Exchange of contracts means that as your solicitors we swap the contract you have signed for the part signed by the seller (if you are buying), or the buyer (if you are selling), and we insert the completion date agreed.

It is then for the first time that you become legally bound to buy or sell the property and your seller or buyer becomes legally bound to sell or buy it. When contracts are exchanged it is usual to pay a deposit on account of the purchase price, and traditionally the amount paid is 10% of the purchase price. However it is quite common by arrangement for smaller deposits to be paid and accepted.

Completion is the date when you complete your sale or purchase, and it is when the balance of the purchase money is paid over. On this date the seller moves out of the property and the buyer moves in.

Q When can I stop paying my mortgage?

A We recommend that you do not stop paying your mortgage until after contracts have been exchanged at the earliest. Until that time it is possible that the whole transaction could fall through. If you stop making your mortgage payments you could end up in arrears and incur administration costs from your lenders. Some lenders will assume that any payments due prior to the actual completion date will be made by you and it is always better that you check with them direct before missing any payments.

Q Why can't I move on a Saturday?

A Completion has to take place on a day when the banks are open for business i.e. Monday to Friday, so that we can transfer the balance purchase money from our bank to the bank of the seller's solicitors. Once someone has paid over the full purchase monies for a property they are legally entitled to vacant possession of the property, and to take up residence in it. It therefore follows that moving must take place on Monday to Friday as well.

Q Why is buildings insurance necessary from exchange of contracts?

A You are legally committed to purchase the property from exchange of contracts. Most contracts for the sale of freehold properties therefore provide that the buyer takes over responsibility for the buildings insurance from that date. It may be different in the case of leasehold properties, since leases usually provide that the Landlord will insure and recover the cost of the premium from his tenant. You should therefore start your buildings insurance cover as soon as you are advised that contracts have been exchanged, unless we tell you otherwise.

Q Why do I have to start my life cover before I move into the house?

A Again, you are legally committed to buying the property from exchange of contract, which means that even if you died before completion the seller could compel your personal representatives to proceed with the purchase. If you were to die between exchange of contracts and completion then the life cover will provide sufficient funds for the purchase to proceed. This may be especially helpful in the case of a wife and young family. It would be hard enough losing a husband and father without the financial burden of being tied to a contract that you could not perform in your own right without the financial assistance of the death benefit under the life policy.

Q My partner is contributing towards the purchase of this property but is not going to be on the mortgage. How can he/she protect his/her position?

A For many reasons a property may be purchased in the name of one party even though more than one party will occupy the property. If the occupier is going to contribute towards the purchase price then the only way that they can protect their position is by way of a Declaration of Trust. This is a document which we can draw up for you to set out the agreement between you both in the form of a legally binding agreement.

Q Why do we have to produce evidence of identity to you when we have already produced it to the lenders?

A The Council of Mortgage Lenders require all solicitors acting in residential mortgages in England & Wales to check the identity of all clients. The lenders inspect your documents to satisfy themselves of your identity when you apply for a mortgage and then ask us to check again at the time the loan is used, to ensure that the same people are obtaining the benefit of the loan.

Q Do I need a survey?

A Firstly, the survey which is carried out for your Lender is only intended to make sure the property is worth the amount the Lender is lending on the security of the property. This may be much less than the purchase price. Secondly the Lender's survey is to provide a valuation report and not to identify areas of concern to you as a potential purchaser. Thirdly, the Lender's surveyor has a contractual duty to the Lender, but no contractual relationship with you. You may not therefore be able to sue him if the surveyor misses something or is negligent. We therefore advise that you have your own survey carried out. When you make initial contact with the Lender it may be possible to arrange for their surveyor to carry out a House Buyers Report or Full Structural Survey for you, at the same time as the valuation is carried out for the lender. This would mean that only one surveyor needs to be engaged, and may save you some money.

Q What happens if a buyer fails to complete on the contractual completion date?

A If this occurs, the seller can ask the buyer to pay interest on the outstanding balance of the purchase money - usually at 4% over Clearing Bank Base Rate. The seller can also serve Notice requiring the buyer to complete in a certain specified time - usually within 10 working days. If the buyer still fails to complete within this further time the seller can sue him for damages, or sue him to make him perform his contract and complete, or forfeit or keep the deposit paid as a penalty. Most contracts also provide that if the deposit paid is less than 10% of the purchase price, he can require the buyer to pay the difference between the amount paid and the full 10% - and if necessary can sue for this sum.