Whether you are buying or selling a property you will need to understand the conveyancing process, which means the legal transfer of ownership of property. Conveyancing also allows sellers to stipulate exactly what is and is not included in the sale.

What is Conveyancing?
Conveyancing is the legal term for the transferring of ownership of a property. Whether you are a home buyer, seller or just looking to remortgage with a different lender, you will need to know how it works. Although it is possible to do it yourself, the process of conveyancing can be very complicated. First-time buyers especially, will need help with conveyancing, as it incorporates searches on the property, investigation, assessment of draft contracts, exchange of contracts, completion and post-completion paperwork.

Conveyancing may be best left to the professionals; either a solicitor or a licensed conveyancer - someone qualified specifically to do this kind of legal work. Solicitors and conveyancers structure their charges in different ways - some charge a fixed fee while others charge a percentage of the property value.
On top of fees are set costs known as disbursements. This term covers everything else your conveyancer will charge you for, such as transferring the money from your lender to the account of the person selling their home, VAT, postage and any other costs incurred in carrying out the work.

Conveyancing - Buying a Property
Once you have found your property and have agreed to buy it, you instruct a conveyancer to act on your behalf. They in turn will contact the seller’s conveyancer. At this stage, pre-contract enquiries begin, which include specific questions relating to such issues as disputes with neighbours and alterations to the property. The seller is legally required to answer these enquiries honestly!

Although you may already have had a valuation survey carried out in order to arrange a mortgage, you may also decide at this point to have a more thorough home buyers' report carried out or for instance if the property is old or unusual - a full structural survey.

From June 2007 Home Information Packs (HIPs) become law. An HIP will have to be provided by the seller within 14 days of a property going on the market. It must contain ownership, planning and environmental searches, a list of fixtures and fittings included in the price, and the terms of sale. Everything, in fact, that the buyer currently sets about getting after an offer is accepted. The pack must also include the property's Energy Performance Certificate (EPC). Buyers will still need a mortgage valuation. Your conveyancer's next step is to apply for a local authority search and any other necessary searches. This is not a fast process, taking anything between four and six weeks.

A local authority search only shows details of the property you are buying. It won't tell you about the supermarket being planned next door. Unless you pay more for a plan search, you won't know until it's too late. Your conveyancer will also make any necessary additional enquires, including those that may be requested by your lender as conditions of your mortgage offer, such as a drainage search, detailing whether waste water goes into a public or private sewer.

Assuming the results so far are satisfactory, contracts and deeds will be prepared. Your conveyancer will then assess the draft contracts. As these are legal documents, the wording has to be correct and unambiguous. If the property is not freehold but leasehold , this is the point at which you will need to check thoroughly the apportionment of expenses (if you are in a block of flats), the terms of maintenance, the terms of the management of the property and what charges are made, such as ground rent and service charges.

You will be asked to sign the contract and mortgage deed and pay the relevant deposit - between 5% and 10% is typical, although if it is not your first property you are buying, it could be considerably more. A completion date for the sale will also be set - usually within 28 days.

Once contracts have been signed by both you and the seller, they are exchanged by your conveyancer and the seller's solicitor or conveyancer - hence you have reached the point of exchange and the transaction becomes legally binding. As purchaser, you are responsible for the insurance of the property after the exchange of contracts so you need to ensure appropriate cover is in place from that date.

The next step in conveyancing is to carry out bankruptcy searches. Mortgage lenders want to be sure that neither the buyer nor the seller has a bankruptcy notice registered against them. Title searches at the Land Registry and the Land Charges Department (depending on whether the property is registered or not) will also be carried out, confirming that the seller has the right to sell.

Thereafter, on the date of completion you must pay the balance of the funds through your conveyancer, who, in return, will get the title deeds from the seller's representatives. Finally, stamp duty is payable (depending on the value of the property) and your conveyancer will arrange to register the transfer ownership with the Land Registry, supplying you with a copy of the title and sending the original document to your mortgage lender.

Conveyancing - Selling a Property
From June 2007, it will be illegal to market your home for sale before you have compiled a Home Information Pack (HIP), which will be available through lenders, estate agents and specialist pack providers.

Any offer to buy that you receive will have been made subject to survey and contract. This means that neither you nor the buyer is legally bound to go through with the transaction and each may withdraw without incurring a penalty right up to the point of exchange of contracts.

Once you have agreed to sell your property you should instruct a conveyancer. Their first step will be to obtain your title deeds and Land Registry copies. You will be required to complete forms detailing information about your property and its fixtures and fittings. If the property is leasehold, you will be asked for more information about the lease.

If you have any guarantee documents relating to damp-proofing, building work, extensions and any other documentation such as planning consents, you will also be asked to provide them.

Your conveyancer will prepare draft documentation that should include a draft contract of sale and a copy of the lease if the property is leasehold. If the property is freehold either a land certificate (if there is no outstanding mortgage) or a charge certificate (showing the mortgage) should be provided. In rare circumstances, if the title of the property is not registered with the Land Registry, an "abstract of title" should be supplied which will contain copies of all deeds and documents proving that the seller actually owns the property and may sell it.

This paperwork is sent to your buyer's conveyancer who will then carry out various searches. Any questions that arise from these searches must be satisfied before you will be asked to sign the contract.

Once the contract is signed and a completion date agreed, it will be exchanged with a contract signed by the buyer. Your conveyancer will, at this stage, also receive a deposit from the buyer. Once the contracts have been exchanged, the sale becomes legally binding. Both parties are now committed to completing the sale. Backing out may incur legal action as well as high costs. Once contracts have been exchanged the property is, in fact, no longer yours to worry about. The buyer assumes responsibility for it and for insuring the building.

Your conveyancer will approve and ask you to sign a transfer deed and apply to your mortgage lender (if you have one) for a redemption figure. On completion of the sale, your conveyancer will receive the balance of the sale price and, in return, hand over the title deeds to the buyer's conveyancer. Any mortgage will be redeemed out of the sale proceeds. Your conveyancer will subtract their costs and forward the rest of the funds to you.

Conveyancing and Remortgaging
If you are changing your mortgage lender, your conveyancer will arrange to get the title deeds from your existing lender and get a redemption statement showing how much is owed on your existing mortgage.
Your conveyancer will check any special instructions from your new mortgage lender and will carry out any searches against the property that are required. You will be asked to sign the mortgage deed and agree a completion date. On completion your existing mortgage will be paid off and the new mortgage registered with the Land Registry.

Your home may be repossessed if you do not keep up repayments on your mortgage.
Article date: 10.06