Coronavirus (COVID-19) and residential conveyancing transactions

 
 The government has issued some guidance for the public and the industry in relation to home buying and selling Buying and selling homes during this stay-at-home period Given the situation in the UK with regard to the outbreak of coronavirus (COVID-19), we urge parties involved in home moving to adapt and be flexible to alter their usual processes. There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times, including the specific measures for those who are presenting symptoms, self-isolating or shielding. Prioritising the health of individuals and the public must be the priority. 

Where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance in this document on home removals. Where the property is currently occupied, we encourage all parties to do all they can to amicably agree alternative dates to move, for a time when it is likely that stay-at-home measures against coronavirus (COVID-19) will no longer be in place. In the new emergency enforcement powers that the police have been given to respond to coronavirus, there is an exemption for critical home moves, in the event that a new date is unable to be agreed. 

 Recognising parties will need to alter common practice, we have sought to ease this process for all involved by: Issuing this guidance, developed with Public Health England, to home buyers and those involved in the selling and moving process. Agreeing with banks that mortgage offers should be extended where delay to completions takes place in order to prioritise safety. Working with conveyancers to develop a standard legal process for moving completion dates. government spokesperson said on 25 March: "Home buyers and renters should, as far as possible, delay moving to a new house while emergency measures are in place to fight coronavirus. “If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on social distancing to minimise the spread of the virus. 

 “Anyone with symptoms, self-isolating or shielding from the virus, should follow medical advice and not move house for the time being.” We’ll be publishing further guidance as soon as possible. Where moves do need to go ahead, all those involved should take care to follow government guidance on social distancing and hygiene. See Public Health England’s guidance for households with possible coronavirus (COVID-19) infection. If you’re acting for someone who has exchanged contracts and has a completion date within the next few days, and you, your client and the other side are able to proceed, which may be very difficult given the position with removal firms, there’s currently nothing to prevent you doing so. This is subject to following current guidelines in respect of public health: properties not being occupied with cases (or suspected cases of) coronavirus (COVID-19) occupants not being in a state of isolation, and all parties abiding to social distancing requirements .

 This is a very high bar and it may not be possible to comply. We’re seeking further clarity from government and will monitor closely as the situation develops. We’re hoping for official guidance to be published in the next few days. The announcement about social distancing has obviously increased the impact of coronavirus (COVID-19) on conveyancing transactions. We continue to receive many questions from members but the nature of these has now changed. Many relate to the immediate issues in relation to completion where contracts have been exchanged. We understand that this is a very difficult time for you and your clients. The situation is unprecedented, and we’re becoming aware all the time of different aspects of the impact of the pandemic on those moving home and our members. 
The restricted movement requirements impact on many parts of a conveyancing transaction. What everyone wants to understand (and ideally control) is who bears the risk in various situations. The focus of this note, now that the restrictions on movement are severe, are on those transactions where contracts have already been exchanged. After exchange The key issue at every stage is to point out as many of the likely risks as you can. You’ll want to assess the clients’ appetite for risk, set out the options and likely consequences for each option and establish whether your client wants to proceed and, if they do, how they want to do this. It’s important to: explain all risks confirm advice in writing make sure the client acknowledges having had the advice in writing You may need to discuss these issues across any chain. 
 The contract may need to set out how completion might happen in the circumstances to satisfy the requirements of Public Health England: information for the public guidance for employees, employers and businesses The transaction will be governed by the provisions in the contract unless the parties agree otherwise. If completion does not take place after contracts have been exchanged due to COVID-19, the parties not completing will be in default. 

 The contract provisions relating to default will probably apply unless the non-defaulting party takes a ‘good faith’ view. Notices to complete, penalty interest and deposit loss may all come into play. If the transaction forms part of a chain of transactions, it may not be possible to take such a view without incurring a penalty. There’s no specific ‘force majeure’ provision in the Standard Conditions of Sale and it may be that it would be difficult to imply one. Frustration A contract is frustrated if it’s incapable of being performed due to an unforeseen event (or events) which is not the fault of either party. It may be that the contract might be frustrated by isolation or restrictions on movement and activity, but it’ll depend on the circumstances of the individual case and, ultimately, the attitude of the courts. 

 It’s difficult to envisage what might happen to a contract if it’s frustrated. Some commentators have suggested that the provisions relating to rescission might apply. It may be that contracts will not be frustrated. So many factors are involved in making the determinations and the court has, in recent times, shown a marked reluctance to make such a finding. The expectations, assumptions and responsibilities of the parties must be taken into consideration. That a contract would be held to be frustrated in the current circumstance is not something that can be treated as a presumption. Each situation is likely to have different implications and a different outcome. There’s no certain and fixed answer. 

Variation to contracts after exchange If contracts have been exchanged but completion has not taken place, and the parties want to vary the contract, care must be taken not to create a new contract unintentionally. Creation of a new contract may impact on insurance. Risk passes on exchange – will insurers need to be notified that technically a new contract has been formed? Even changing the date of completion may create a new contract rather than varying an existing one. You’ll need to review the standard and special conditions if a new contract may be formed on the revised date. Remember there are risks in giving professional undertakings rather than expressly varying a contract. 

Undertakings In response to the question ‘What if I am struggling to comply with a conveyancing undertaking?’, the Solicitors Regulation Authority say: “Our rules provide that you should perform all undertakings given by you within an agreed timescale or if no timescale has been agreed then within a reasonable amount of time. Before giving any undertaking in these current circumstances you should always consider if you can properly implement it and you should have regard to all the eventualities that may affect your ability to perform it. You may want to add something new into your undertakings to take account of the risk of delay due to the effects of coronavirus. “If you find yourself in a situation that you are not able to comply with an undertaking that you have given, you should let your client or the other side know as soon as possible. If a failure to comply or delay is beyond your control due to the impact of coronavirus, should any complaint be made, this would be taken into account by us as a mitigating circumstance”.

What is conveyancing?

Conveyancing is an umbrella term that refers to the legal and administrative work associated with transferring ownership of a property from one party to another. It is undertaken principally by property solicitors who receive instruction once an offer has been made on a property and accepted by a second party. Following the successful offer, solicitors representing the seller and buyer will exchange details and begin the conveyancing process.

Homeowners remortgaging their property will also need to find a provider to complete the associated conveyancing process.

Who undertakes conveyancing? Traditionally conveyancing is completed by solicitors acting on behalf of the buyer and seller, all solicitors practising in England and Wales must be registered with the Law Society and are regulated by the Solicitors Regulation Authority (SRA). In recent years ‘conveyancers’ have become more popular – these specialists are licensed and regulated by the Council for Licensed Conveyancers (CLC).

Many conveyancers are solicitors who now choose to specialise in conveyancing only. Homeowners are legally able to undertake conveyancing themselves but the process can be complicated, as well as time consuming. Specialist legal knowledge may be required in more complex cases, such as on leasehold properties. In addition, mortgage lenders are invariably keen to protect their investments and will often insist on professional conveyancing services, as will other parties who may not wish to risk the process falling through. Incorrect conveyancing can also open you up to legal issues, for example over boundaries or planning permission.

Who needs conveyancing? If you are buying, selling or remortgaging a house you will need to undertake conveyancing.

How much does conveyancing cost? Conveyancing fees vary widely depending on the service used (solicitors, online conveyancing or DIY conveyancing) and the price of the property you are selling, buying or remortgaging. Research shows that UK homeowners can expect to pay anything from between £330 to £1050 for conveyancing costs.
What is included in a conveyancing quote? Conveyancing quotes are made up of two distinct costs:

 1. Basic Fee This covers the cost of the solicitor or conveyancer’s time and varies depending on the method used to calculate the figure. Some solicitors charge by a fixed-fee, although this is becoming rare. Others charge on a per-hour basis which should be avoided as the costs can mount quickly if there are any irregularities. The most common – and most cost-effective option – is based on a sliding scale depending on the selling or buying price of the property concerned.
 If you are selling a leasehold property your basic fee should be higher than if you are purchasing a freehold property as there is extra paperwork involved. Your solicitor should ask you whether the property is freehold or leasehold – if they don’t, be wary. Your basic fee may also increase if you are purchasing a Shared Ownership, new build, Right to Buy, Buy to Let or Help to Buy (ISA) property.

2. Disbursements Disbursements are costs incurred by the solicitor that are passed onto you. These should be similar across all conveyancing quotes as they are fixed charges incurred during the conveyancing process.

Here are the common disbursements and the amount you should expect to pay:
For Buying a Property

 Bankruptcy search – [£2 - £4 per person taking out the mortgage] – your mortgage lender will need confirmation you have not been declared bankrupt, and this check is a formality of the pre-completion searches (also known as ‘priority searches’).

 Local authority searches – [£100 - £200] – the cost of these will vary depending on which Borough your property resides in. Quotes that do not ask for your postcode will only give an approximate figure. These searches are designed to protect you from council plans that may affect your property in the time after you’ve moved in.
Land registry office copies – [£4 - £8] – a pre-completion search to ensure the vendor owns the property you are attempting to purchase.

 Electronic ID Verification- [£2-£18 per person taking out a mortgage] – you will need to give your conveyancer proof of your current address and ID documentation.

 Environmental search – [£30 - £35 + VAT] – this checks for ground contamination in close proximity to the property. If contamination is found you may be liable even though you did not cause it.

Water and drainage search – [£30 - £40 + VAT] – this ensures the property is connected to fresh and foul water sewers. The cost will vary between water companies but should not fall too far outside the range given above.

Chancel repair liability search – [£10 + VAT] – if you buy or inherit a property that is located within the parishes of the church you may have to pay a contribution towards the upkeep, so it is worth checking to see if you are liable.

 Telegraphic transfer fee – [£25 - £45 + VAT] – this fee is charged by your bank and covers the cost of sending the money used to purchase the property to the seller’s conveyancing provider.

Mortgage handling fee – [£60-£80] – a fee may be charged by your solicitor for dealing with the legal aspects involved in setting up your mortgage.

HMLR final search- [£3-£7] – this is a final search that is carried out just before completion

 Land registration fee – [£20 - £910] – this is a fixed cost disbursement that depends on the cost of the property being purchased. Conveyancing quotes should factor in the real cost of the land registration fee.

Local Authority Search Indemnity Insurance

As referred to, it is a type of insurance which means that you're insured in the event that an order is served causing you to sell the property under the price paid for the property.

What is covered with no search indemnity insurance?

You would need to check the terms in your own insurance policy, however here is what one policy states:

All or any of:

1. disposal for value of all or part of Your interest in the title to the Property following an Order which causes You to realise a reduction in Market Value; or
2. actual dispossession from all or part of Your Property following an Order which causes You to realise a reduction in Market Value; or
3. such other event following an Order which causes You to realise a reduction in Market Value
   If you are buying or selling a house, you’ve probably heard of indemnity insurance – it is becoming an increasing feature of housing transactions. But before you hand over hundreds of pounds for policies, find out what it is and if you really need it.
   

   What is indemnity insurance?

   Indemnity insurance is a type of protection purchased during housing transactions. It is a one-off payment for a policy that then lasts forever.
   It is used to offer protection if there is a potential problem with the property that could result in local council action or legal problems in the future.
   “Legal indemnity insurance is obtained in order to offer protection to a buyer (and a lender) where there is a defect in the title, which cannot be resolved,” says Sarah Ryan, head of conveyancing at Co-op. “Legal indemnity insurance does not remedy the insured defect, but merely offers financial compensation should a claim be brought in the future.”
   Typical reasons for taking out indemnity insurance include to cover missing building regulation certificates, planning permission issues or missing professional installation certificates for fires or windows.
   Indemnity insurance is often associated with older properties, where historic rights are still on the deeds.
   “The right of Mrs Miggins to draw water from a well may have been essential back in 1860,but it might be a bit inconvenient if her heirs and successors could still wander into your garden with a bucket today,” says Henry Pryor, a property buying agent. In this example, you would purchase an indemnity policy to protect yourself from future claims from the Miggins family to access water on your land.
   
   Please email  us at info@valueconveyancer.co.uk if you need to find out more

Conflict of interests in conveyancing

Under the SRA code of contract 2011 you cannot act( do work for ) a client if this causes a conflict of interest or has any risk of crossing over into the conflict of interest definition.

This is where your duty to act for 2 or more clients that are involved in the same deal and cause the advice or work to cause a conflict between them .

There can be exceptions explained later in this post.

As a conveyancing professional or solicitor, you might be approached by the buyer and seller to act for them in the same property transaction; in most cases this is not acceptable as conflict will arise in the conveyancing process, as when one client is buying a property from another some of the advice you might have to give the buyer or seller might not be agreeable to one of the parties and you are always supposed to have the best interests of your client in the process , this would mean that one of your clients best interests will not be looked after in favour of the others interest .

Chapter 3 of the SRA Code includes an indicative behaviour which states that you may not have achieved the outcomes that the code requires if you act “for a buyer (including a lessee) and seller (including a lessor) in a transaction relating to the transfer of land for value, the grant or assignment of a lease or some other interest in land for value”.

There can be an exception for circumstances where the 2 clients have a substantially common interest; in a property sale/purchase between 2 clients this is usually never possible even though they both a have a strong common interest in the property 1 is buying and 1 is selling it, some issue that arise from searches will be more concerning to the buyer than the seller as it will be the buyer that will have to deal with the issue to be able to purchase the property , it might even be the case that you have to recommend to buyer property has to many issues to make it a smooth transaction.

The indicative behaviours in the SRA Code suggest that you should only act for both the lender and the borrower on the grant of a mortgage if:
 • the mortgage is a standard mortgage (such as one provided in the normal course of the lender’s activities, where a significant part of the lender’s activities consists of lending and the mortgage is on standard terms) of property to be used as the borrower’s private residence
 • you're satisfied that it is reasonable and in the client’s best interests for you to act
 • the certificate of title required by the lender is in the form approved by the Law Society and UK Finance (formerly the Council of Mortgage Lenders)

Even if these criteria apply, you should still consider each case to make sure there’s no conflict of interest.

Stamp Duty - Everything you need to know

If you’re buying a home in England or Northern Ireland costing more than £125,000, you’ll have to pay Stamp Duty Land Tax (SDLT) on your purchase. Use this guide to find out about how Stamp Duty works, including Stamp Duty for first-time buyers, rates for second homes and how it is paid.

What is Stamp Duty?

In England and Northern Ireland you’re liable to pay Stamp Duty when you buy a residential property, or a piece of land, costing more than £125,000 (or more than £40,000 for second homes).


This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.
If you’re buying a property in Scotland you will pay Land and Buildings Transaction Tax (LBTT) and in Wales Land Transaction Tax (LTT) instead of Stamp Duty.

If you’re buying in Scotland, find out more about Land and Buildings Transaction Tax (LBTT).

If you’re buying in Wales, find out more about Land Transaction Tax.

How much is Stamp Duty?

There are several rate bands for Stamp Duty.
The tax is calculated on the part of the property purchase price
 falling within each band.

For example, if you buy a house for £275,000, the Stamp Duty Land Tax (SDLT) you owe is calculated as follows:

• 0% on the first £125,000 = £0
• 2% on the next £125,000 = £2,500
• 5% on the final £25,000 = £1,250

Stamp Duty rates*

Minimum property purchase price	Maximum property purchase price	Stamp Duty rate (only applies only to the part of the property price falling within each band)
£0	£125,000	0%
£125,001	£250,000	2%
£250,001	£925,000	5%
£925,001	£1.5 million	10%
Over £1.5 million		12%

*Stamp duty for residential leasehold properties are charged differently.

Stamp Duty on second homes

Buyers of additional residential properties, such as second homes and buy-to-let properties, will have to pay an extra 3% in Stamp Duty on top of current rates for each band.
This increased rate applies to properties bought for £40,000 or more.
It doesn’t apply to caravans, mobile homes or houseboats.
If you buy a new main residence but there’s a delay in selling your previous main residence, you’ll have to pay the higher Stamp Duty rates as you’ll now own two properties.
However, if you sell or give away your previous main home within 3 years of buying your new home you can apply for a refund of the higher SDLT rate part of your Stamp Duty bill.
You can request a refund for the amount above the normal Stamp Duty rates if:

• you sell your previous main residence within three years, and
• you claim the refund within three months of the sale of your previous main residence, or within 12 months of the filing date of your SDLT tax return, whichever comes later.

 You can calculate you stamp duty here

https://www.moneyadviceservice.org.uk/en/tools/house-buying/stamp-duty-calculator

Use our Stamp Duty calculator to find out how much you’ll pay.

For example, if you buy a house for £275,000, the Stamp Duty Land Tax (SDLT) you owe is calculated as follows:

• 0% on the first £125,000 = £0
• 2% on the next £125,000 = £2,500
• 5% on the final £25,000 = £1,250

Total SDLT = £3,750
Stamp Duty rates*

Minimum property purchase price	Maximum property purchase price	Stamp Duty rate (only applies only to the part of the property price falling within each band)
£0	£125,000	0%
£125,001	£250,000	2%
£250,001	£925,000	5%
£925,001	£1.5 million	10%
Over £1.5 million		12%

*Stamp duty for residential leasehold properties are charged differently.

Stamp Duty on second homes

Buyers of additional residential properties, such as second homes and buy-to-let properties, will have to pay an extra 3% in Stamp Duty on top of current rates for each band.
This increased rate applies to properties bought for £40,000 or more.
It doesn’t apply to caravans, mobile homes or houseboats.
If you buy a new main residence but there’s a delay in selling your previous main residence, you’ll have to pay the higher Stamp Duty rates as you’ll now own two properties.
However, if you sell or give away your previous main home within 3 years of buying your new home you can apply for a refund of the higher SDLT rate part of your Stamp Duty bill.
You can request a refund for the amount above the normal Stamp Duty rates if:

• you sell your previous main residence within three years, and
• you claim the refund within three months of the sale of your previous main residence, or within 12 months of the filing date of your SDLT tax return, whichever comes later.

For an application form and more information, visit the GOV.UK website

Moving bricks working in conjunction with an award winning conveyancing firm

Moving bricks working in conjunction, with an award winning innovative conveyancing firm that has won 3 awards at the Estate Agent of the year conveyancing awards, which were held at the Grosvenor hotel in London, The Awards were based solely on client’s feedback. The Firm based in Manchester City centre, were given 3 awards, Best Regional, Best in county and best single office in the UK, this was based over a 10 month qualifying period.

Head of operations and Founder of the Firm said “we thought we were clearly underdogs due to other firms being in the industry far longer so we are truly honoured to walk out with 3 awards”. The firm was set up 24 months ago with the aim to create a property law firm which engages with clients, uses cutting edge technology to help the client have an exceptional Journey when buying a property. The firm has ambitious expansion plans based on an already succesfull business model, the firm works under the umbrella of a large law firm established in 1875.

In addition to the ESTAS Awards the firm has also been awarded the Law societies conveyancing quality scheme, this means they are accredited by them and recognised as one of the country’s leading conveyancers and on all major Lenders panels . To get a quote for this firm then please visit our portal at www.movingbricks.co.uk Or just click on the logo below .

The power of online reviews

As more and more people are sharing their everyday experiences on the world wide web, online reputation has become an important factor in determining whether a business will go bust or become a roaring success. Did you know that 90% of consumers read online reviews before visiting a business? Whether you run a simple burger joint, a restaurant offering unique culinary experiences or a luxury hotel overlooking the sea, what people are writing about you on the internet can make or break your business. Let’s take a look at some of the most crucial ways in which online reviews have the power to influence the successfulness of your business:

Social reach and trust building

We live in a time where, due to massive false advertising with sole intent to gain bigger profits by deceiving potential customers, people have simply stopped blindly trusting businesses when they promote their own services to others. No matter how amazing your business is, self-praise will only get you so far; research shows that consumer reviews are nearly 12 times more trusted than descriptions that come from businesses. Nowadays, people seek real advice from real users, sharing their honest and unfiltered opinion about their experience with the business, which is why reviews have become the best way for businesses to build a bigger social reach and establish valuable trust which instantly converts potential customers into paying customers — a study shows that 92% of users will use a local business if it has at least a 4-star rating.

Priceless feedback for business improvements

Although one might think that negative reviews can do nothing more but severely harm your business, that is actually not the case at all; in fact, negative reviews can help you achieve a thriving success by engaging with your customers and improving your business according to their desires. A study showed that when retailers replied to negative reviews, a third of customers either deleted their original negative review or replaced it with a positive review and nearly a fifth went on to become loyal customers. So, the main factor in determining how reviews will affect your business’ success is actually not the ratio between positive and negative reviews, but how fast and well businesses response to them. What people want are instant, honest and personalized interaction, feeling that the businesses like engaging with them, value their opinion and that they are striving to realize people’s recommendations — case in point, a study by Cornell University professors discovered that sales go up each time a business responds to a review.