The Complete Guide to Conveyancing

Buying or selling a property is rarely a quick process – and that’s because certain steps must be taken along the way. One such step is conveyancing. It’s a vital link in the chain and necessary to complete the transaction between buyer and seller.

What is conveyancing?

Conveyancing is the legal process of transferring property ownership from one party (the seller) to another (the buyer).

Any transfer of property begins with a negotiation of terms between the buyer and seller, including the purchase price and any conditions of the sale. Once an agreement is reached, the conveyancing process can formally begin.

One of the primary tasks in conveyancing is conducting searches and investigations to uncover any issues that may affect the property's title or use. These searches can include checking for outstanding liens, easements, planning restrictions, or other legal encumbrances that could impact the property's value or how it is used.

As a real-world example of what these investigations may uncover, let’s consider the issue of cladding in high rise buildings. For those considering buying a flat in a multi-occupancy building, the question of cladding is especially important following the tragic fire at Grenfell Tower in June 2017. A fire which started on the fourth floor due to an electrical fault in a refrigerator subsequently enveloped the entire tower. The fire was able to spread so quickly because combustible aluminium composite cladding and external insulation on the outside of the building fed the flames, leading to substantial loss of life. 

Ever since, many owners of flats in buildings with a similar cladding applied have seen the value of their homes nosedive. Conveyancers can help advise prospective buyers on the need for surveys and whether the cladding on the property they wish to purchase has the correct certificates of safety to confirm that it meets current regulations

Importantly and at the core of what conveyancers do is to , prepare and review and advise on legal documents such as contracts of sale, transfer deeds, and mortgage documents. These documents outline the terms of the transaction and ensure that both parties understand their rights and obligations and what they are buying and selling.

Who needs to do my conveyancing?

In the UK, conveyancing can be carried out by firms that are regulated as solicitors, legal executives  or licensed conveyancers. All are professional and are qualified and regulated to handle property transactions, but there are some differences between them.

Solicitors and Legal Executives are qualified lawyers who can practise in various areas of law, including conveyancing. They can have a broader legal knowledge base and can with their colleagues, often assist with complex legal issues that may arise during the conveyancing process not least because Solicitors firms can also provide additional legal services beyond conveyancing if needed.

Licensed conveyancers specialise in property law and conveyancing. They undergo specialised training in property law and conveyancing procedures, making them highly knowledgeable and experienced in the field of property transactions. They cannot generally however advise outside of that limited area should it be needed.

What will a conveyancer do?

As we have touched on, a conveyancer plays a vital role in ensuring that property transactions proceed smoothly, legally, and in the best interests of their clients. But what does it mean in practical terms? What do they do, exactly? Here are the primary responsibilities of a conveyancer.

●       Legal Advice: A conveyancer provides legal advice and guidance throughout the property transaction process. They ensure that their clients understand their rights liabilities and obligations, as well as any legal implications associated with the transaction. Which is to say, don’t hold back if you have questions!

●       Conducting Searches: One of the key tasks of a conveyancer on a purchase is to conduct various searches and investigations on the property being bought or sold. These searches aim to uncover any issues that may affect the property's value or use. This may include outstanding liens, easements, planning restrictions, or other legal encumbrances.

●       Preparing and Reviewing Documents: A conveyancer will also be responsible for preparing and reviewing legal documents related to the property transaction. Those documents include contracts of sale, transfer deeds, and mortgage documents. The conveyancer will verify that the document contents accurately reflect the terms of the transaction and protect their client's interests. In short, they go through all the small print.

●       Facilitating Communication: A conveyancer acts as a mediator between the buyer and seller, as well as other parties involved in the transaction, such as estate agents, mortgage lenders, and government authorities. They facilitate communication and ensure that all parties are informed of the progress and any relevant developments as they happen.

●       Managing Finances: A conveyancer manages the financial money movements of the property transaction, including the transfer of funds between the buyer’s conveyancer  and sellers’, payment of estate agents fees and taxes, and settlement of any outstanding mortgages or obligations relating to the property.

●       Registering the Transfer: After the completion of a purchase transaction, the conveyancer is responsible for registering the transfer of ownership from the seller to the buyer with the the Land Registry in the UK. This officially records the change of ownership and ensures that the new owner's ownership rights are legally protected

How much will it cost?

The cost of conveyancing can vary depending on several factors, including the complexity of the transaction, the value of the property, the location of the property and the clients personal situation and circumstances.  . All regulated conveyancers are required to provide details of their charging structure but they can vary – with some firms offering a more expensive bespoke service and others offering a more online service that allows cheaper fees but less personal contact  

Additionally, some conveyancers offer fixed-fee packages or no-completion, no-fee arrangements,. While conveyancing costs can add up, investing in a reputable conveyancer will provide peace of mind and ensure that the property transaction proceeds smoothly and legally.

Here are some common expenses associated with conveyancing:

●       Conveyancer's Fees: This is the cost of conveyancing work itself and typically varies based on the conveyancer's experience, location, and the services included. Conveyancer fees may be fixed or based on a percentage of the property's value or (rarely) on a time spent basis .

●       Search Fees (Purchase only): Conveyancers need to conduct various searches on the property. These include conducting local authority searches, environmental searches, and water and drainage searches. These searches incur fees, which can vary depending on the location and the types of searches required. Some properties may also need mining searches and some clients may want more detailed searches about what may be happening in the local area etc.

●       Land Registry Fees (Purchase only): There are fees associated with registering the change of ownership with the Land Registry. The cost depends on the value of the property and whether it's being registered for the first time or has already been registered and is being updated.

●       Stamp Duty Land Tax (SDLT) (Purchase only): SDLT is a tax imposed by the government on property transactions above a certain threshold. The amount of SDLT payable depends primarily on the purchase price of the property but other factors, such as whether it's a second home, of the buyer has loved abroad, can play a significant role in how much tax is payable. This is a very complex area and specialist advice may be needed

●       Additional Costs: There may be additional costs involved, such as bank transfer fees, mortgage lender fees, or indemnity insurance premiums to cover any potential issues uncovered during the conveyancing process.

How long does the process take?

The duration of the conveyancing process can vary depending on many factors, including the requirements of the parties, the complexity of the transaction, the efficiency of the other conveyancer, mortgage offers, surveys and any unforeseen problems that may arise. However, on average, the conveyancing process in the UK typically takes between 12 to 16 weeks to complete, according to the HomeOwners Alliance whilst leasehold transactions can take considerably longer) .

In this time frame, the conveyancer will conduct the various searches and enquiries, review legal documents, and conduct any necessary investigations should further information be needed. Once all of this complete, and both parties are satisfied with the terms of the transaction, contracts are exchanged and both parties are committed contractually.

At this point, a completion date is agreed upon for you to move house. Following completion, the conveyancer ensures that the change of ownership is registered with the Land Registry and handles any remaining administrative tasks.

Do I need conveyancer for remortgaging?

Eagle-eyed readers will have caught the reference to mortgage documents in the first section of this guide, and they won’t be surprised to know that the answer is yes - in some cases.

Whether or not you’ll need to involve a conveyancer in your remortgaging process often depends on whether you’re remortgaging with your current lender or looking to move to a new mortgage deal with a new lender. If you’re sticking with your current mortgage provider, you may not be required to use a conveyancer. If you’re hoping to move to a new lender, you will need the services of a conveyancer.

Remortgaging, though less complex than the initial property purchase, still involves several legal steps.  Your identification will need to be verified for example and details of your current mortgage will need to be requested from your lender.

After your new lender evaluates the property and issues a mortgage offer, it will need to be reviewed and then signed.

On completion day, your legal representative receives the mortgage funds, settles your old mortgage, and disburses any remaining funds. Finally, they will update the Land Registry to reflect the changes in your property's legal title.

If you’re looking for exceptional, expert assistance with your residential property matter contact the team today at conveyancing@kiteleys.co.uk or call us on 01202 849242.

How complex do leases have to be?

During an average month I may see more than half a dozen different styles and forms of commercial leases pass across my desk.   The type of property and its location mainly dictates the type of lease. I may see anything from a lease for a small lock-up shop on Poole High Street to a factory unit on Upton Industrial Estate. I could be dealing with a major new office development in Swansea or part of a shopping centre in central London.

The quality of modern drafting is generally more consistent than its equivalent of a few decades ago, primarily due to the ability to reprint and re-create leases at the click of a mouse, but this ease of production has its downsides. Too often now I can be presented with a draft lease for a 3-year lease of a small unit based on a lease the landlord’s solicitor had used for a major new development, with all its minutely detailed provisions relating to service charges and approval for subletting. Whilst leaving no stone unturned, such leases are usually overkill, as they can run on for 80 pages or more, and invariably end up costing the landlord and tenant more, as the solicitor is under no less duty to advise.

Landlord’s can often save time and money and have a tenant completing a new lease sooner by choosing a solicitor who will carefully prepare the first draft so as to be as straightforward as possible given the length of the term and the type of property, whilst ensuring that the key issues are addressed in the document.

Residential Property: Boundaries and boundary disputes

When you purchase a property the last thing you want to inherit is a boundary dispute. This is why it is so important for you to check any plan you receive very carefully to make sure it accurately reflects the property you believe you are buying.

As solicitors we do not physically inspect the property but rely upon our you/your surveyor to draw to our attention any discrepancies. You should investigate the precise boundaries of properties carefully, in particular where there is some obvious inconsistency between the physical aspects of the land and the wording of, or plan in, a document.

If a dispute arises between neighbours about the boundary between their properties the legal documents will be looked at to determine boundary ownership. However, the boundaries between properties can differ from those described in the title documents or lease. The most common are where they have been changed by agreement or by encroachment (occupation without permission).

Sometimes where the deeds seem clear, on closer examination there may be uncertainties. If you think that the boundaries are not defined in the title document or lease, or that the boundaries have been changed by agreement or encroachment, you will probably need to get legal advice from a solicitor and/or a surveyor.

Even where the boundary appears clearly defined on the Land Registry title plan, the red edging on that plan is ‘indicative only’ and as Land Registry plans are described as accurate ‘to within a metre either side’, there is substantial room for disagreement.

Boundary disputes can be costly and time consuming and generally create a lot of unhappiness and mistrust for all parties involved. They can quite often escalate beyond all proportion to the original dispute. Any disputes would need to be disclosed to any future buyer of the property and this could impact upon the value of your home. Often it can far better in terms of time and expense to reach a compromise, however this should not be attempted without an opinion from a solicitor and surveyor as to the likely true position should the matter reach the Courts.

There are of course steps you can take to make disputes far less likely, or prevent them escalating. Thoroughly check any plans and flag up any issues to both your solicitor and the surveyor and deal with any encroaching fences with your neighbours at the point when the footings are going in, rather than when the fence is already erected and has been standing for six years or more!

Kiteleys’ property team can help you by reporting on any likely disputes at the time of purchase and our dispute resolution team can give advice to homeowners on progressing a claim in court if matters cannot be resolved amicably with your neighbour.

Tenancy Deposits – to protect or not?

As most landlords are aware, since the 6th April 2007 all security deposits taken by landlords must be protected in one of the approved Government Tenancy Deposit Schemes [TDP]. Landlords have always had a choice of schemes to which they can safeguard each deposit that must then be followed up with the serving of a statutory notice [Section 123], which must be served upon the Tenant no later than 30 days of receiving the deposit.

The question arises though; must all deposits be in monetary form and must all deposits be protected? The answer is surprisingly no, since the latest legislation amendments of April 2015, landlords can now accept actual valuable items instead of money. Examples include a car, a piece of furniture or even jewellery, such physical assets do not need to be protected by any such scheme therefore giving an “opt out” option to a number of landlords who find the deposit schemes ineffective and time consuming.

Other types of deposits that do not come under the TDP legislation are deposits from lodgers, certain types of live-in landlords and company lets. As the landlords are not obliged to take deposits in these circumstances some get to avoid the rules altogether but landlords do need to be mindful of the fact that the TPD legislation only applies to Assured Shorthold Tenancies [AST].

The schemes are free and not over complex but still landlords are apprehensive to get involved as in some schemes require the full amount of the deposit must be protected where as other schemes which are insurance based, require the landlord to pay an ongoing insurance premium. Furthermore, at the end of the tenancy the landlord has the option of returning the full amount of the deposit or part sum depending on whether any dispute arises. If dispute does arise then usually an arbitrator will decide upon the validity of the issues and pays out accordingly.

To summarise, since the introduction of the TDP Schemes in 2007 there has been much confusion and a genuine lack of knowledge in regard to the legal requirements which has left many landlords in trouble. The rules are very stringent so if landlords do not want to get into strife, the following condensed summary is a useful breakdown of the current position that landlords of AST’s find themselves in since the latest amendments of April 2015;

• Deposits do not have to take monetary form, physical items can be used as a deposit that do not come under the TDP and therefore do not need to be protected;

• Once a deposit is received it must be deposited within 30 days and notice of the prescribed information [s123 Notice] must be served on the tenants;

• Proof of service is invaluable as without it any attempt of the Eviction via the Section 21 route will undoubtedly fail;

• Detailed inventory checks and reports must be carried out by independent, authorised third parties as without such documentation a landlord will not succeed in any claim for damage against a deposit;

Failure to comply with any of the rules will not only prohibit a landlord from serving a section 21 and regaining possession but will also result in a hefty fine that could be three times as much as the deposit.

Buying a Beach Hut?

Beginning life essentially as changing rooms for Victorian beach goers, beach huts have very much become a symbol of the great British sea side. Not at all a glorified shed but a valuable haven for the enjoyment of our beaches not just for the summer but all year round, and undoubtedly locally, high in demand. Head of Office of Savills Canford Cliffs Keith Fensom observes that beach huts are rare to the market and at Savills they hold a list of hopeful purchasers. So what is involved and how do you get one?

One option is to rent from the council. Poole Council re-opened its waiting list for the annual use of its beach huts at the start of 2014 after being closed for 7 years. Open to all Poole council residents, there are 7 lists relating to the different locations, including the prestigious Sandbanks and Canford Cliffs areas. However according to figures on the Poole Council website as at June 2015 the waiting list is up to 20 years for a Sandbanks beach hut. Indeed the council are currently in the process of building 86 new beach huts, due to be completed July 2015.  Weekly and daily lets are also available at less of a wait.

The alternative is to purchase. A beach hut is a long term investment and people tend to hold on to them for generations and pass them down to their children and grandchildren. Newspapers and Estate Agency’s are a good start your search and the National Association of Beach Hut Owners can offer advice.

In terms of legalities, in general, beach huts are Leasehold and purchased on a fixed term lease. This means that in addition to the initial purchase price, a yearly license fee, a sort of ground rent, is payable to the land owner. VAT may be payable on the purchase price and will need to be charged when sold. Some are sold with a share of Freehold, such as those at Branksome Chine, one of which was recently marketed by Savills of Canford Cliffs and is currently under offer at £99,000.00. Some Councils like Bournemouth charge a fee being a fixed percentage of the sale price when the beach hut is sold so the sale needs to be structured in a certain way.

In addition to the Licence fee, non-domestic rates apply to beach huts. Under current rules, if you do not own another commercial property you can apply for a reduction in the charges. Regular maintenance is needed and insurance will need to be obtained from a specialist provider, with the majority of claims being made for theft or vandalism. Commonly overnight stays are not permitted, an exception being at the beach huts on Hengistbury Head, hence the disparity in prices, with Beach Huts there selling for over £200,000.00. Despite prices such as these, no lender will generally lend on a beach hut although some interest is now being shown by specialist lenders.

Once you have purchased your beach hut you may be free to change it, as long as you comply with the guidelines for the area, which can run not just to pages but small books! Most will have no running water or electricity and so it is sensible to check whether solar panels will be permitted.

For such an important purchase and one with so many variables it is essential that any prospective beach hut purchaser instructs a specialist solicitor to look over and advise on the lease arrangements so that you are aware of exactly what you are purchasing, and what is and is not permitted.

An abridged version of this article appeared in the Kiteleys July/August newsletter.  If you would like to subscribe to our newsletter please contact paula.rose@kiteleys.co.uk

Changes to Stamp Duty Land Tax

George Osborne revealed in his Autumn Statement to the House of Commons that he was reforming the way Stamp Duty was paid on property purchases. He hopes that this will benefit 98% of property buyers.

The old system worked on a tiered basis. As a result, the rate at which Stamp Duty was payable applied to the whole of the price. If the purchase price did not exceed £125,000 there was no Stamp Duty to pay. However, if the property cost say £125,001, Stamp Duty at the rate of 1% was paid on the whole price, working out at a rather large £1,250. If the purchase price was over £250,000, Stamp Duty was paid at the rate of 3% of the total price. For a property purchased above £500,000 (but not exceeding £1 million), the rate of Stamp Duty was 4% of the total price.

Under the new system buyers will now only pay Stamp Duty on the portion of the price that is within a certain tax bracket. Like under the previous rules, if the purchase price does not exceed £125,000, there is no tax to pay. However, a new 2% rate is charged on the next £125,000 of the price. If the purchase price exceeds £250,000, you will then be charged 5% on that part which exceeds £250,000, up until £925,000.

For example, if you are buying a property for £275,000, no stamp duty would be payable on the first £125,000. £2,500 would then be payable on the next £125,000 (£125,000 x 2%) and £1,250 would be payable on the final £25,000 (£25,000 x 5%). Therefore the total Stamp Duty payable would be £3,750. If you had purchased the same property under the old rules the tax would have been much higher, namely £8,250 (£275,000 x 3%).

Example on a purchase price of £275,000
First £125,000
Tax Free £125,001 – £250,000
2% Tax Rate £250,000 +
5% Tax Rate
£125,000
No Tax to pay Next £125,000
£2,500 tax Last £25,000
£1,250 tax

In summary, there will be no tax to pay on the first £125,000 of the purchase price. You pay 2% of the purchase price on the portion between £125,000 and £250,000 and 5% on the portion above £250,000 up to £925,000. Higher rates apply thereafter.

The new Stamp Duty rates are shown in the table below:
Purchase price of property Percentage paid on the part of the property price which falls within the tax band
£0 – £125,000 0%
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1,500,000 10%
£1,500,000 and over 12%

If you would like to discuss the changes with one of our specialist conveyancing solicitors at Kiteleys or would like to receive an estimate for conveyancing fees please contact our team at info@kiteleys.co.uk or call 01202 708634.

Getting on the property ladder!

Part One – House or Flat?

by Adele Parkinson

With lending to first time buyers at its highest since December 2007, it looks as though it is becoming just that little bit easier to get your foot on the property ladder.

Anyone contemplating buying their first property should consider speaking to a financial adviser who will be able to give you an idea of what is available in terms of lending options, give you a budget to work towards in terms of your maximum purchase price and typical monthly repayments.

Once you have a budget, you can begin the fun part – looking for the right property! But are you going to be looking for a house, or a flat? If you are looking in Bournemouth,Pooleor the surrounding areas, then the closer you get to the coast the more likely it will be that the only properties within a first time buyer’s budget will be flats or apartments.

Here are just a few considerations you may want to take into account before you decide whether to opt for a house or a flat.

In legal terms, most houses are “freeholds” and most flats are “leaseholds”. The difference is that with a freehold, you own the land absolutely but with a “leasehold” property you buy exactly that – a lease for a number of years.

Although it sounds obvious, it is important to check at an early stage how long is left to run on the lease. Many mortgage companies (i.e. lenders) are unlikely to lend on flats where there is 70 years or less to run on the lease because of their concern that it may devalue the property and be less easy for them to sell on if they were to repossess.

When you buy a leasehold property, there will also be a “freeholder” who owns the freehold of that land, i.e. an individual or a company that owns the block as a whole.

The residents of the block may have formed a company and bought the freehold themselves. This is known as “share of freehold”. As a purchaser, you would also become a shareholder or member of the company on completion.

Many people see “share of freehold” flats as preferable because the residents have more control of the upkeep of the block and most importantly, they are free to extend and update their leases when necessary.  If the block is not share of freehold then the freehold owner may charge a large premium to extend the lease.

So, my tips when buying a leasehold property would be:

• Check with your Solicitor or Estate Agent who owns and manages the freehold  3(they might not be one and the same)

• Check to see whether the flat is “share of freehold”

• Check how long there is left to run on the lease and whether the lease term could be extended

• Check the restrictive covenants contained within the lease – for example, are you required to have sound proof flooring? Are pets allowed?

• Check the level of ground rent and maintenance charges and work them into your monthly budget along with the rest of your outgoings.

For more information, please ask for Adele Parkinson in the Property team, adele.parkinson@kiteleys.co.uk or telephone 01202 708634

Moving with Kiteleys

Moving home is a huge commitment practically and emotionally. Finding the right solicitors to guide you through the process as well as on the big day is so important to ensure it goes through as smooth as possible. Given that it is reassuring that a friendly solicitor team can be on the end of the phone if you have questions or queries throughout the moving day.

They can be your middleman between all parties in the moving chain and give you the knowledge you really need when in a possible panic.

You will probably be working between the two properties during the day, if there are more than one of you can make this easier by sharing the duties, and if possible more the merrier.

For an almost effortless moving day here are a few reminders and tips:

The Old House
•    Night before the move, chargeyour mobile and so on the day keep your ‘fully charged’ mobile close to hand
•    Have a few extra boxes, bags and wrapping materials on hand for last minute items
•    Check all rooms , cupboards, sheds, garage and garden to make sure you haven’t missed anything
•    Clean up after yourself, mopping , sweeping, hovering as each room is emptied, closing the door behind you  to show that it is completed
•    Take meter  readings – make a note or call immediately if you can (so take note of numbers to call), electric, gas, water (if necessary)
•    If you know the property will be empty for a while, turn off water at the stopcock and electric at the fuse box
•    Leave an instruction guides/manuals  for new tenants in an obvious place
•    Leave contact details just in case the new tenant needs to forward post or has an emergency question

The New Home
•    Keep your mobile (and charger) close to hand
•    Emergency kit – take the must-have kit with you which includes the simple things, kettle, mugs, spoons tea, coffee, milk, bathroom toiletries and small first aid kit, maybe the odd treat!
•    Very important possessions – keep important documents, e.g passport, bank account details, insurances etc with you so you know they are safe and not lost. Take small heirlooms, wedding albums and your most prized items if you can and put them somewhere safe
•    Lay protective sheeting or polythene over carpets while removals are bringing boxes in
•    Make a note of meter readings
•    Keep on eye where boxes are going, and direct where necessary
•    Don’t upset the neighbours – if the removal van or your car blocks someone’s access, ask first and introduce yourself, people are much more accommodating if they are informed initially
•    Keep the gangways clear – make sure hallways, corridors and pathways  are left empty for faster and easier transportation of boxes into rooms and the garden
•    Cork open the champagne!

If you would like to speak to a specialist Conveyancing solicitor, please call Mandy Jeneson on 01425 278866.