Essential 13-Step Guide to Conveyancing: Buying and Selling a House in the UK

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Short Answer – 13 steps which are equally important. 3 are more equal than the others – exchange (2) completion (3) and (12) payment of funds. Read on to find out why

Conveyancing Process - image of a very stress family moving house!

Moving house can be rather stressful! ^^^ AI image by Grok

This is another conveyancing process advice email from my CSB days – it’s still pretty good, explaining in broad terms how conveyancing procedure works – how you buy and sell a house or a piece of land. If you’re going through a sale or a purchase it’s worth reading, but you must remember to take advice from you solicitor specific to your case (or get in touch with us!) this is useful guidance only!

The old email!>>>>

“You have been sent this email with general advice so that you know the procedure works for exchange, completion, change over times, dates, funds, insurance and risk and moving house.

1. Starting file (the conveyancing process!)

The estate agents sends out head of term, the sellers solicitor prepares a contract and the buyers solicitor investigates the deeds. Nothing is legally binding at this stage, although you have to pay your solicitor for their work. The investigation is to establish that the seller is entitled to sell and if you are getting a mortgage, that there are no third parties who’s interest can rank ahead of the bank’s charge on the property. E.g. Donor’s giving deposits, covenants with neighbouring land owners to pay charges or not to alter the property, rights of way over your house or the neighbours house, rights of people in occupation not on the deeds such as tenant’s, lodgers, partner’s or spouses. If you are aware of any such rights please tell us immediately in writing. If your bank sends a mortgage offer without an occupiers waiver we shall assume there will be no occupiers!

2. Exchange of contracts is the start of the contract. 

You will soon sign one half of the contract and the other party signs the other half of the contract. Your solicitor then exchanges your part contract for with the other solicitor on the phone using the ‘law society formula B’. Before this point the price and the dates can change and neither party can force the other to sell or buy. You should not make any permanent arrangements until contracts have been exchanged.

3. Completion. 

Once you have exchanged contracts the dates and the price are fixed. You can book vans, make arrangements and rely on the money to arrive on time. The seller must sell and the buyer must buy. The buyer pays 10% to the seller (held by the solicitors) on exchange to start the contract. The other 90% is payable on or before the last day on the contract. This is completion. The contract is complete once 100% of the money is paid by the time and date stated in the contract. The seller must vacate the property by the time stipulated in the contract. Any other occupiers must also join the contract and move out at the same time.

4. The change over time 

The change over time is usually 2:00pm on the day of completion. The seller moves out before 2:00pm, the buyer moves in after 2:00pm. Some contracts change the time by special condition. Please check with your solicitor for the change over time. Please remember to take meter readings on completion when you move out / in.

5. Deposit 

10 % is payable by the buyer on exchange of contracts to the seller. The solicitors hold the deposit until completion. Some properties (e.g. new builds) require the deposit to be released immediately to the seller. Check with your solicitor if you are unsure.

6. Risk 

The risk for the property passes usually on exchange. The buyer insures from exchange, the deposit and the contract are an insurable interest and can even be registered by notice at H M Land Registry.

7. Insurance 

The buyer should insure from when the risk passes to him, usually on exchange of contracts. If the property is damaged during the contract, the buyer should complete and claim on their insurance. The buyer cannot cancel the contract because the property is damaged.

8. Breach of contract 

This happens very rarely, but it is very serious. If one party does not stick to the terms of contract once exchanged then there is a breach. Interest is payable on the delayed time and funds at the rate set out on the contract. Typically, the buyer’s funds will be late from a bank, or not arrive at all. In an extreme case the buyer may loose their deposit altogether and become liable for costs, or a seller may not pay off their mortgage properly or move out of the house. This is a very serious matter, it is a very rare occurance and you will need legal advice to resolve it.

9. Keys for the property 

As solicitors we do not deal with keys for the property, or the condition of the property generally. If the seller is using an estate agents (or our firm as the estate agent) then the agent will generally hold one key and release this key to you on completion of the transaction. All of the other available keys will be left at the property and there is no guarantee that there will be a key for every lock. As a matter of security and safety the buyer should change all the locks for the property after the purchase has completed. You should check the sellers property information form for any special arrangements for the keys.

10. Storage of Deeds 

When the matter is complete the sellers solicitor sends your deeds to the buyers solicitor. The sellers solicitor pays off any mortgages on the property and passes the net sale proceeds to the sellers and closes the file. The buyers solicitor receives the deeds and pays the stamp duty for the property, if any. The buyers solicitor applies to HM Land Registry to register the purchase and any mortgage. Once the purchase is registered the purchasers solicitor can balance the ledgers (as their can be additional HMLR costs) and close the file. If we are acting in your purchase we can store the old historic deeds for you (storage charges are set out in your client care letter). Alternatively you can collect and store them yourself at your own risk. If we store your deeds and we are instructed by more than one purchaser, in order to release the deeds we have to ID check each purchaser and all parties have to agree who can collect the deeds. We can only give the deeds to one person, we can’t give half of the deeds to one person and half of them to another person as they are original documents. After three years we will need to renew your ID checks and there is a small admin fee for this.

11. HMLR Property alert service * new from 1st May 2019 –

You can sign up to the HMLR property alert service to stay up to date with land registry dealings with your property. “Property Alert is an award winning free property monitoring service aimed at anyone who feels a registered property could be at risk from fraud”. Property Alert is an award winning free property monitoring service aimed at anyone who feels a registered property could be at risk from fraudFull details herewith. Click through to sign up a new account and start getting updates >> https://propertyalert.landregistry.gov.uk

12 – SPLITTING FUNDS and PAYMENT OF FUNDS in completion of a sale.

There are broadly three circumstances>>>1) Sole owners are simple to seal with – the net proceeds of sale are sent to the sole owner.2) If there is more than one owner and you hold the property as joint tenants in equity we should either (1) split the funds equally between you or (2) pay the funds to your joint bank account. Again this is relatively simple.3) If there is more than one owner and you hold the equity as tenants in common – you need to send to us the transfer deed or declaration of trust from when you acquired the property so we can calculate your shares. HMLR do not record trust information under a tenancy in common,HMLR only indicate that there is trust in place. Therefore we have to check your declaration of trust as shares in the equity may be unequal shares or may be payable to a third party not recorded at HMLR. The declaration of trust dictates how the equity is split. This will either be in the transfer deed from your acquisition of the property, or in a separate declaration held be trustees. It may be also be in a severence of the joint tenancy (normally 50% each under a severence). If a tenant in common has passed away we may need to contact the deceased executors or administrators to pay out their share and there may be some extra charges.

13 – Costs and Insurance if your case does not complete or exchange

Please also remember you can now obtain insurance to cover legal expenses in case your case falls through and fails to exchange and complete – the policies are available on the open market and you should check whether you can get a policy to mitigate the risks and costs. If in doubt please get financial advisors to assist you to arrange one of these policies.

Please do not worry – contact us if you have any questions about procedure!

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