Residential Conveyancing: Tips for Ensuring a Quick Process

 

One misconception about the real estate industry is that if both parties find the buyer’s proposal amenable, the title transfer should be quick and easy. Ideally, that would be the case. However, many stumbling blocks can prevent smooth transactions, from potential issues revealed during residential conveyancing searches to either party being slow to respond to requests for information. Here are tips to ensure that your conveyancing proceeds without a hitch.

Know How Much You Can Borrow before Buying

Before you make an offer, you should already know how much you can borrow. Once you have an accepted offer, it will be easy to go through the following steps. Applying for a mortgage comes with complications of its own, so if you can get one in advance, it would make the conveyancing process faster. Having a mortgage secured before buying will also show sellers that you’re serious about coming to an agreement.

Hire an Estate Agent instead of Going Independent

It can be tempting to attempt to purchase your house alone, especially if you’re thinking about how much money you could save. However, good estate agents are worth what you pay—they are efficient and have industry knowledge that will see you through unforeseen situations.

Double-Check Everything You Fill Out

The residential conveyancing process will involve plenty of document exchanges, and the quicker you respond to requests for information, the sooner the solicitors will move to the next stages. However, you have to be sure what you’re writing down is accurate—submit complete forms and be careful to fill them out as accurately as possible. Correcting mistakes will use up time and make the conveyancing even longer.

Hire a Conveyancing Solicitor

Getting a conveyancer is one of the best ways you can ensure that the transaction goes well. If you’re a first-time buyer, having an expert to guide you will help remove the uncertainty of the process. A conveyancer can help you understand aspects about the sale which are unclear to you, and they can take the lead on unfamiliar things. Even if you do a lot of reading, nothing beats having first-hand knowledge of something, and a conveyancing expert would have plenty of experience in transferring properties.

The conveyancer is also crucial in helping speed up the process. They will be aware of red flags and alert you about these—they can even suggest possible ways forward. A good conveyancer will put your needs above everything and keep you updated throughout the conveyancing process. Many of them make it a point to ensure that first-time buyers have a painless, hassle-free experience, so if you have plenty of other commitments or responsibilities, getting a solicitor for the transfer will be a great help.

Conclusion

Whether you’re buying or selling property, you’d need to instruct a conveyancing solicitor to carry out relevant legal processes. Transferring home or land ownership is no walk in the park, even for people who quickly reached an agreement about the sale. Having a solicitor enables you to speed up the process and handle all transactions with confidence and ease.

Conveyancers told to 'get ready' for fee increase

 

HM Land Registry has told conveyancers to 'get ready' for the first fee increase since 2009 in a blog that hints of potentially further changes ahead.

The agency announced last November that fees for registers and transfers of title would rise by up to 21% under changes to come into effect on 31 January.

In the latest blog, chief financial officer Iain Banfield said applications started before 31 January, but submitted on or after this date, will be subject to the new fees, as will applications submitted before 31 January but subsequently cancelled, rejected or resubmitted on or after the 31^st.

Conveyancers are asked to 'get ready' by familiarising themselves with the new fees.

Banfield said: ‘The fee increase allows HM Land Registry to move forward with plans to deliver what customers need – more consistency and speed in service delivery – by investing in both operational capacity and accelerating the digitalisation and automation of services. With this in mind, we are exploring further changes to the fee order, including its structure and simplicity. We are currently engaging as widely as we can before we set out any proposals.’

Will House Prices Keep Rising in 2022

 

 

 

 

 House prices soared in 2021, and with experts unclear as to whether growth will continue in 2022 we examine what you need to know

 

 

House prices could stabilise in 2022 following a red hot year for the housing market in 2021, but many uncertainties lie ahead, experts say. 

The average UK house price rocketed up by 10.2% over the past 12 months to £285,000 in England, according to the Office for National Statistics (ONS). Reasons for this included the stamp duty holiday, a shortage of available properties and the 'race for space' - a desire for homebuyers to live in bigger homes following multiple lockdowns and the move to working from home. 

But, in potentially good news for those buying before renovating a house, some experts project price growth to calm. James Tatch, principal, data and research at UK Finance, told the PA news agency: “We’re seeing a return to a stable path for new lending, for (2022) onwards.”

 

However, David Hannah, principal consultant at Cornerstone Tax, says that many uncertainties in the UK housing market as we head into 2022, with one of the predominant problems being the current supply within the UK housing market.

Read on to see whether experts predict a cooling of the market in 2022, and why housing activity has thrived throughout 2021. 

What to Know About House Prices in 2022

Some experts believe the market will cool in 2022, but the combination of stronger buyer demand coupled with a shortage of available properties means that the market could remain healthy for a while to come. 

"The inbalance between supply and demand has, inevitably, raised the average UK house price," says Hannah. "A solution to the global supply issues will cause an increased supply of new builds, providing the UK housing market with some much-needed extra stock, which should subsequently decrease the average UK house prices, but there are many obstacles facing the UK housing market now which has caused a lot of uncertainty”.

Tom Bill, head of UK residential research at the estate agent Knight Frank, says the Omicron variant could be a factor which affects interest rates and the housing market, which could impact prices. 

“Gravity-defying price growth is the result of low interest rates and tight supply, which are both things we expect to reverse this year, putting downwards pressure on prices," he said.

And Jonathan Hopper, chief executive of Garrington Property Finders, says that the Omicron variant make some homeowners decide to wait before putting their property up for sale, potentially cooling the market.

 

Why Have House Prices Rocketed up? 

House prices soared in 2021, reaching record highs in multiple house price indexes (HPIs).

Annual house price growth rose to 10% in November, up from 9.9% in October, meaning the average UK property value is now £252,687, according to Nationwide's latest house price index. Nationwide added that house prices have risen to almost 15% above average prices in March 2020 before the coronavirus pandemic first hit the UK. 

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Reasons for this surge include the stamp duty holiday extension and the new mortgage guarantee, two measures announced in the Spring Budget 2021 which kept housing market activity buoyant. The 'race for space' - with buyers seeking larger homes - has also been a factor.

But many expected the market to cool once the stamp duty holiday - which helped to fuel about 1.5m house purchases across the UK - ended in June (prior to the tapering effect between July-September). This was evidenced initially by annual house price growth falling to 10% in Nationwide's September house price index (from 11% in August).

However, the stamp duty holiday led to a shortage of available properties and ongoing price rises could be due to this limited supply. 

The impact of soaring inflation and the rise in interest rates in December could yet prove influential too and make it more expensive to buy a house

 

Where Have House Prices Risen the Most?

Mountain Ash in Wales is the place in the UK where house prices rose the most in 2021, according to Rightmove, which experienced a 31% increase in asking prices for homes.

Wales was also this year’s regional asking price hotspot, with average prices up 10.5% in Wales compared to 2020. This was followed by the South West (9.6%) and the South East (9.1%).

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Meanwhile, separate data from a review of Office for National Statistics (ONS) data by HouseholdQuotes, revealed that over the last 20 years, several London boroughs have undergone dramatic increases in house prices, none more so than Kensington and Chelsea, where prices have risen by £863,000. 

Westminster (£600,000), City of London (£540,000) and Camden (£505,000) have also all increased by over £500,000. Corby, meanwhile, has experienced the highest percentage increase in house prices, rising 246.49% between 2000-2020. A home in Corby used to cost £51,950 in 2000 and cost £180,000 in 2020.

Prices Remain Challenging for First-Time Buyers

Growth has exceeded earnings growth over the past year, and the ratio of house prices to average earnings has increased to a record high, Nationwide says.

A 20% deposit is now equivalent to 110% of average income - a record high and up from 102% one year ago. This is proving a particularly changing disparity for first-time buyers.

And Yorkshire Building Society said this week that UK house sales to first-time buyers reached their highest level for 19 years in 2021. 

“Clearly, new buyers have not been deterred by the price of a typical first-time buyer home, which has increased by 9% to £222,997 in the year to October,” the building society said.

 

The Legacy of the Stamp Duty Holiday 

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The stamp duty holiday exempted tax on the first £500,000 of the purchase price between July 2020 and June 2021, and has had a remarkable impact on house prices. 

Zoopla said in its July house price index that it expected prices to edge upwards by 6% in the coming months because of the clamour to make the most the tax break, before eventually easing back to 4-5%. 

Moreover, the stamp duty holiday led to a shortage in supply of properties on the market, with house sales 28% lower in October than a year earlier after a record surge in activity earlier in 2021, according to HM Revenue and Customs.

A tapering effect began on 1 July which kept exemption at double its standard level (£250,000) until the end of September. This dropped back to £125,000 at the beginning of October. 

Russell Galley said in August that "much of the impact from the stamp duty holiday has now left the market", but Jonathan Hopper, CEO of Garrington Property Finders, commented on Halifax's November HPI: “So much for the end of the stamp duty holiday taking the steam out of the market. It’s a month since the tax incentive for buyers was finally withdrawn in England, but you’d scarcely know it. The market is ploughing on regardless."

Our Requirements Have Changed

The pandemic has also been a key driver of house prices, and spending more time indoors has changed the requirements of those looking to buy a home.

Two- and three-bedroom semi-detached houses were snapped up the quickest this year, Rightmove says, with many families searching for more spacious homes, following the shift to working from home. 

Nick Barnes, head of research at estate agency chain Chestertons, said in September: “We expect activity to pick up as there is still substantial unsatisfied demand for spacious homes, mortgage offerings remain attractive and buyers are keen to get their lives back on track post-lockdown.”

 

A Nationwide study from earlier this year revealed that of those moving or considering a move, around a third (33%) are looking to move to a different area, while nearly 30% are doing so to access a garden or outdoor space more easily.

Greater Demand for Rural Locations

The pandemic has also increased our desire for rural living. A recent study by Moveable that 50% of Londoners no longer have the desire to buy a home in the capital, with working from home continuing for many. 

Their research also discovered that 41% of home movers no longer consider commute times when searching for a property, and 41% of home owners in cities plan to move out in the next year to buy a house in the country.

Anthony Codling, an independent housing analyst, adds: “Large numbers continue to look for more space to facilitate working from home and countless others are looking for additional homes to accommodate the emerging hybrid working from home model of two to three days in the urban office and two to three days in the rural or coastal idyll. 

"Meanwhile, the number of homes for sale is not meeting demand and the outlook for prices is up not down.”

 

 

 

 

What You Should Know About Restrictive Covenants

 

 

 

 

 

 

 

 

 

 

 

When you are buying a property, you may encounter what is known as a restrictive covenant. This is a written binding condition included in a property’s deed or contract by a seller. This dictates what a homeowner can or cannot do with the property under specific circumstances. For instance, a restrictive covenant can prevent new owners from altering the architectural style of the building or keep them from building new structures on a specific part of the land. It could also state that the new owner cannot use the property for trade or other businesses. 

In this post, Conveyancing Expert, a trusted conveyancer in Manchester discusses all you need to know about restrictive covenants:

Why Are Restrictive Covenants Used?

In most cases, they are established to maintain certain standards for residents in a particular community. Housing developers usually add restrictive covenants to transfer deeds so that owners won’t do anything that could possibly affect the neighbourhood negatively or break from the desired “uniformity” of the area.

The restrictions in such cases are often minor, like the prohibition of installing satellite dishes, parking a boat or a caravan in front of the house, keeping livestock in the yard, painting the house a loud colour, or others. 

Land owners may also create restrictive covenants on the lands they are selling to protect their value and minimise damage. 

Are Restrictive Covenants Only Applicable to New Builds?

No. They can be placed even on older properties. Moreover, the age of the covenant won’t have any effects on its validity. There are cases, though, where really old covenants are accepted as unenforceable due to the fact that its original builder cannot be traced or because of ambiguous wordings that make it hard to apply. It may also be deemed void if the covenant is historically obsolete. 

How Will a Restrictive Covenant Affect You?

What you should know about restrictive covenant is that it is applicable to all future purchasers of the property and not just the first or original buyer. They call it “running with the land”. That’s why it is important for you as a buyer to discuss this with your conveyancing solicitor so they can examine the deeds to see if there are any covenants before you sign anything. Remember that once signed, you will already be accountable for any breaches that you incur. 

Additionally, you should check where the ‘benefit of the covenant’ is located and whether or not it has passed onto another person or company. This is because they will be responsible for the enforcement of the restriction and answering queries related to the covenant. 

As a buyer, you should also determine if the property’s value will be affected in the future due to the provisions of a covenant. There are cases in which mortgage lenders refuse to approve loans on properties where a covenant is determined to potentially affect their saleability in the future. In such cases, you can contact the successor in title and current vendor and tell them that you cannot proceed due to the covenant. It’s possible for them to remove the restriction, especially if it’s evident that the covenant is going to affect their ability to sell the property, too. 

Conclusion

These are just some of the basics that you need to understand about restrictive covenants. As you can see it can be one of the factors that can make purchasing a property more complicated, and definitely among the reasons you need quality conveyancing services. A seasoned conveyancer can review deeds to determine if there are any covenants that you should be aware of and give you advice regarding the best steps that you should take.

Losing the plot: Residential conveyancing complaints and their causes

 

 

 

 

 

 

 

 

 

 

Has the Legal Ombudsman opened a can of worms with his recent report ‘Losing the plot: Residential conveyancing complaints and their causes’?

Part of the problem is that conveyancers have no idea how difficult or complicated a transaction might be until they are part way through it. As an ex-conveyancer, with 25 years’ experience at the coal face, I think I have encountered pretty much every problem there is. Having said that, a very modest number of transactions are straightforward, with a clear title, no mortgages to deal with, no alterations to the property and clear searches.

Quoting for conveyancing work without seeing any paperwork is like taking a car to the garage and asking the mechanic to provide a ‘fixed fee’ for servicing it (and carrying out any unexpected repairs) without allowing them to lift the bonnet. They just wouldn’t do it.

It has baffled me for years as to why there is not more helpful information provided to buyers and sellers at the outset of all transactions. Surely a free helpful guide, perhaps available in estate agents offices, could be produced by someone; the Law Society, the Legal Ombudsman or even the Legal Services Board?

Many conveyancers explain in their client care letter (are some too long to be easily understood?) that local searches don’t cover neighbouring properties and that buyers should check their plans carefully. But how many people can really tell if the boundaries on the ground actually reflect the drawn boundaries on the plan? I remember back in 1976 visiting properties with my conveyancing supervisor and not just checking plans but looking for alterations and taking measurements. Very few, if any, mistakes were made.

To add to the problems, despite the fact that there are many more registered titles than unregistered titles, conveyancing has become slower and more complicated (tedious?) than ever, caused partly by the introduction of too much red tape and bureaucracy. Conveyancers can no longer use their experience and knowledge to ‘take a view’ on a particular issue. Everything, no matter how small or insignificant, now needs reporting to lenders, fixing and/or insuring.

Conveyancers are now understandably frightened of their own shadows.

Not all conveyancing factories are bad (although in my experience, few are great) and not all high street conveyancers are good. The problem for the consumer is sorting the wheat from the chaff.

Another thorny issue is referral fees. Again not all firms who pay referral fees are poor. It partly depends on the amount of fee being paid versus the conveyancing fee being charged. I remember a solicitor in Bristol in the ‘80s who used to take an estate agent out to lunch every month and hand over a brown paper bag, containing varying amounts of cash, depending on how many transactions introduced by that estate agent had completed that month. Yes, the method and secrecy involved was dubious but did it make the solicitor a bad conveyancer, no, he was quite the opposite.

I used to receive a lot of work from a particular estate agent (with no referral fee being paid) until they had new owners. I was then told I would not be sent any more new work unless I paid a referral fee. I declined the kind offer and the flow of new work pretty much stopped overnight, except of course for complicated cases, or cases involving the agents themselves, their friends or family, because the referral fee paying conveyancer was not up to scratch!

The LeO has produced another document: ‘Using a conveyancing lawyer: Ten helpful tips’. One tip is to be wary of using an online or call centre conveyancing service if “your conveyancing transaction is not straightforward”. The problem is, as explained earlier, until the transaction is underway no one really knows how complicated a transaction may or may not be.

Surely when it comes to one of the biggest purchases of your life it is better to err on the side of caution and assume that the transaction might be tricky?

Another tip is ”to be wary of referrals and recommendations”. Exactly how will the average buyer or seller know if the referral is to a good firm or to a poor one simply paying the highest referral fee? I am sure that the Legal Ombudsman means well and the tips are a step in the right direction but they only scratch the surface.

In order for the LeO to get a much clearer picture of how difficult conveyancing really is might I suggest that he, or a colleague, spend the week before Christmas in the offices of a busy conveyancing firm?

That would truly be a baptism of fire.

Conveyancing Glossary

 

 

 

 

 

 

 

 

 

 

 

Advance notice

Is a notice between two or more parties for a 35-day period that protects a deed intended to be registered in the Land Register in Scotland.

Agreement 

Often used as a word for contract.

Assent 

The formal document required to transfer ownership of a property to a person entitled following the death of the owner.

Basic fee 

The fee charged by the solicitor for their time and skills. This is most often calculated as a percentage of the property’s sale price, although it can also be calculated as a fixed-fee or on a per-hour basis.

Breach of Contract 

Once contracts have been exchanged, if either party pulls out and does not complete the conveyancing process they are in breach of contract and the non-defaulting party can legally seek reparations.

Brine search

Carried out to establish if a property is affected by disused workings in close proximity.

Boundaries 

Boundaries define the extent of the property in question and are usually marked with fencing, hedging or walls. They are usually shown explicitly on the deeds plan.

Building insurance 

Once contracts have been exchanged, you will in most cases become responsible for the new property’s building insurance. This must cover the cost of rebuilding the entire property if it is destroyed. Your mortgage lender may want to see proof of this insurance.

Caveat Emptor 

This literally translates to ‘let the buyer beware’ and means the buyer is responsible for finding out the condition of a property using a surveyor.

Chain 

Where the success of one purchase depends on the sale and purchase of another. Several ‘links’ in the chain can make the conveyancing process particularly complicated.

Charge

A debt secured against your house or another property that you own.

Chattels

Items of personal property left over at a house and included in the purchase price, such as furniture. These are described on the Fixtures, Fittings and Contents form.

Client care letter 

Solicitors will send a client care letter for you to sign and return. This is a formal contract and should be read thoroughly. It will detail what services will be provided and a breakdown of the cost, in addition to the solicitor’s complaints procedure.

Coal mining search

If the property is situated in a coal mining area this search will be conducted by the property lawyer to find out if coal mining activities will affect the property in the future.

Commons registration search 

A search carried out by the local authorities to ensure a property is not registered as common land or connected to a village green, resulting in third party rights over the property.

Completion date 

The legal end of the conveyancing process – the point at which full payment has been made and the title deeds transfer from one party to another. In everyday usage it refers to handing over keys and physically moving into the new property.

Completion statement 

A documented financial breakdown of the property purchase normally sent after exchange but before completion. This important letter details the conveyancer’s full fees including disbursements and VAT.

Conservation area 

If the property to be bought lies in a conservation area protected by a local authority, it may be subject to exterior planning restrictions to preserve the look of the area.

Contract 

A legal document that sets out all details regarding a property purchase including information on the property itself, the buyer and the seller.

Conveyance

A common name for the legal document that officially confirms the sale or purchase of a property or piece of land. Nowadays the transfer is conducted using a Transfer deed/document although in some cases a conveyance may be used.

Conveyancing 

The legal and administrative process of transferring property title from one party to another. This is most often undertaken by solicitors or licensed specialists and is a necessity for most property sales taking place within the United Kingdom.

Conveyancer 

Conveyancers are those who have undertaken the conveyancing process. Traditionally they are solicitors, but in recent years specialists have appeared who solely offer conveyancing as a dedicated service. These may be solicitors who have decided to specialise, or licensed and regulated firms that are not qualified as solicitors.

Council for Licensed Conveyancers (CLC) 

The governing body that licenses and regulates Licensed Conveyancers. All conveyancers must be regulated by the CLC or the SRA. See 'Law Society' and 'Solicitor's Regulation Authority'.

Covenant 

Obligations and restrictions, known as ‘positive’ and ‘negative’ covenants respectively, that can be attached to a property. Obligations require you to maintain something within your boundaries whilst restrictions prevent the construction of specific structures.

Deeds 

Official documentation outlining the owner of a property which is in possession of the owner or mortgagees in the event the property is mortgaged.

Deposit 

A deposit is paid to the seller, usually via the conveyancer, on exchange of contracts: this is normally 10% of the purchase price although is negotiable subject to agreement from the seller.

Disbursements 

Disbursements are fixed costs incurred by a conveyancing provider undertaking the conveyancing process on your behalf, which are then passed on to you. Examples include local authority and bankruptcy searches.

DIY conveyancing

Most people appoint a solicitor or conveyancer when buying or selling a property but some choose to undertake the process themselves. This can be very risky in some cases, such as when dealing with leasehold properties.

Drainage search 

A check carried out during the conveyancing process that ensures a property is connected to both fresh and foul water sewers.

Easement

The right of way over another person’s piece of land.

Encumbrance 

An issue with your property that reduces its value or makes it less marketable.

Equity 

The difference between the value of a property and the figure owed to the mortgagee.

Exchange of contracts 

Contracts are signed and exchanged through your property lawyers. At this point the process becomes legally binding. Past this point neither buyer nor seller can pull out of the transaction without possible legal consequences.

Fixture, Fittings and Contents form 

Provided by the seller’s property lawyer, this form sets out what parts of the property are included in the sale and must be completed and signed off by the buyer before purchase.

Freehold 

A freehold property involves a permanent change in ownership of land or a building that is not time-sensitive and will not revert to another owner unless a new sale is agreed. Compare with leasehold.

Gazumping

When a seller accepts a verbal offer on their property from one buyer, but then accepts a higher offer from another potential buyer.

Ground rent 

Paid by a lessee to a lessor in the event a property is leasehold, usually in yearly amounts.

Insurance Policy 

An insurance policy taken out to protect the buyer against any issues incurred by a defect in the legal title.

HM Land Registry 

The government body that deals with ownership of property and land throughout England and Wales, but not Scotland and Northern Ireland.

Home Report 

You need a home report before you can market your property in Scotland. The pack includes three documents: a Single Survey, an Energy Report and a Property Questionnaire. 

Index map search 

A search undertaken at the Land Registry to determine whether a premises is registered or unregistered.

Land certificate 

The official certificate issued by the Land Registry when a property is registered detailing ownership and interest in the property without any legal charge.

Land Buildings and Transaction Tax (LBBT) 

A tax applied to property transactions and that replaced Stamp Duty Land Tax (SDLT) in Scotland in April 2015. 

Land Registry office copies 

The legally permissible document outlining who owns your property, held by HM Land Registry. It is requested by your conveyancing provider during the conveyancing process.

The Law Society

The Law Society is the representative body for solicitors in England and Wales.

The Law Society of Scotland

The Law Society of Scotland is the professional governing body for Scottish solicitors. All practicing solicitors in Scotland are members of the Society and must adhere to their high quality and standards.

The Law Society of Northern Ireland

The Law Society of Northern Ireland was set up in 1922 and is the regulatory and representative body for solicitors in Northern Ireland.

Leasehold

In contrast to a freehold property, a leasehold property is one where a party buys the right to occupy land or a building for a given length of time, which may extend into hundreds of years. Compare with freehold.

Leasehold property information form 

An alternative version of the Property Information Form (SPIF) that is used when dealing with leasehold properties.

The Legal Ombudsman

The Legal Ombudsman offers an independent and impartial complaints handling service to all those that are not happy with their legal professional. Once you have complained to your own solicitor they have 8 weeks to deal with your complaint. If you are not satisfied by the outcome of the complaint, then you may escalate your complaint to the Legal Ombudsman.

Local authority searches

These searches are conducted during the early stages of the conveyancing process and are designed to protect you from council plans that may affect the state of your property once you’ve moved in. Note that this only refers to things affecting the land up to the legal boundaries of your property: for a more comprehensive check you’ll need to ask your solicitor to perform a ‘planning search', which will cost approximately £25 more.

Management company 

An organisation set up to fulfil a landlord’s obligation under a lease.

Missives 

The exchange of letters between solicitors when buying or selling a house in Scotland.

Mortgage 

Allows you to loan money from a bank or building society so that you are able to buy a house.

Negative equity 

An issue where the amount of money you owe on the property, usually via a mortgage, is more than the sale value of the property.

NHBC

National House Builders Council provide 10 years’ warranty and insurance for new homes.

Occupier’s consent

Required when a person lives at a property but will not be signing the mortgage deed. Consent is asked to allow the mortgage being taken out by the owner, agreeing to move out if the mortgagee takes possession due to the default of the mortgage.

Office copy entries

A set of official copies of the register which can be obtained from HM Land Registry confirming the ownership of the property.

Power of attorney

This document allows a person to act as a legal representative of somebody else with their consent. These are often used to protect the financial interests of the ill or the elderly.

Pre-completion searches 

These are searches undertaken by your conveyancing provider before contracts are exchanged. They check to see if you have been bankrupt and that the property in question is legally owned by the seller. Also known as priority searches.

Priority searches 

See pre-completion searches.

Property Information Form 

Sellers are required to fill this form in and return it to their conveyancing provider. It asks questions regarding boundaries, disputes, services, relationships with neighbours, legal rights, restrictions and other important information. Failure to provide correct information is an offence; in cases where you’re unsure your solicitor should be able to help.

Redemption settlement

This is the sum of money transferred to a lender if you decide to pay back your mortgage early, consisting of the outstanding lump sum balance in addition to a penalty fee charged to cover the interest the lender will subsequently lose out on.

Reparations 

The compensation or remuneration required in the event of a breach of contract.

Reservation fee 

An administration fee charged to cover the cost of reserving a mortgagor’s entitlement to a loan on certain terms or a fee paid to a builder or property developer to reserve a new property.

Service charge 

A charge paid to the landlord to cover any repairs, maintenance or improvements that need to be made to a property. 

Solicitor 

The legal conveyancing process is traditionally undertaken by a solicitor who acts on your behalf once instruction has been received. In this instance conveyancing is one of the services the solicitor offers. See conveyancer.

Solicitor’s Regulation Authority (SRA) 

The independent regulating body of the Law Society of England and Wales, the SRA can be called upon to deal with disputes if you have received an unsatisfactory service from your solicitor.

Stamp Duty

Buyers pay stamp duty based on the purchase price of the property in question, with some exemptions e.g. First Time Buyers up to a purchase price of £300,000. The money accrues to HMRC.

STC 

This is the abbreviation for Sold Subject to Contract.

Subject to contract 

A term used during contract negotiations, nothing is legally binding until contracts are exchanged.

Subsidence 

Where a property moves due to inadequate foundations or significant change in underlying ground resulting in the instability of a building structure.

Tenure 

Freehold or leasehold property ownership.

Third party rights 

When someone other than the legal owner of a property has the right to use or control the land of which they have no ownership.

Title deeds 

Title deeds provide proof of ownership on a particular property. Mortgage lenders will hold onto title deeds as they legally own the property until the mortgage is paid back. Once you have instructed a solicitor they will arrange to obtain the title deeds from the lender, which may take up to 3 weeks.

Transfer deed 

A document that legally transfers your property into the name of the buyer. It must be signed by you in the presence of a witness.

Transfer of equity 

The document transferring the ownership of a share or interest in a particular property from one person to another.

Forfeiture of a Residential Long Lease

 

 

 

 

 

 

 

Generally speaking, forfeiture is the right for a landlord to terminate their leaseholder’s long lease where the leaseholder is in breach of covenant.

To begin with, there must be a provision in the lease allowing a landlord to enforce the covenants in the lease, to include initiating forfeiture proceedings. Those provisions are fairly standard in most residential long leases. However, if those clauses do not exist and a landlord tries to forfeit then the repercussions for the landlord can be significant.

Examples of the grounds under which a landlord may forfeit (if the lease allows) include the following:

• When a leaseholder carries out activities not authorised in the lease, such as subletting without permission;
• When a leaseholder carries out unauthorised alterations to their premises;
• Failure to pay service charge or ground rent.

In order for a landlord to start the process they must serve what is called a section 146 notice. For that notice to be valid, either the leaseholder will need to have admitted the breach (so if you are a leaseholder it is important that you do not do this either deliberately or otherwise) or a landlord must first obtain a determination (normally from a court or tribunal) that the leaseholder is in breach of covenant. This notice will include information about the breach of the lease. It is important to note there is no automatic right to apply for an order authorising forfeiture; a leaseholder must generally be given the opportunity to remedy any breaches.

If the breaches remain following a reasonable time after the service of a valid section 146 notice then a landlord may apply to the court for a possession order.

However, that is not the end of the matter. A leaseholder still has the right to apply for relief from forfeiture. The court has a very wide discretion on whether to grant relief and will take all of the circumstances of the matter and conduct of the parties into consideration. In deciding whether to grant or refuse forfeiture it will be guided by the principle that the right to forfeit is merely a mechanism to ensure the performance of the covenants in the lease. So provided the landlord can be put in the same position as it was before the breach and forfeit occurred then relief should generally be granted.