MEABY & COS GUIDE TO THE SALE & PURCHASE OF RESIDENTIAL PROPERTY
MEABY & CO’S GUIDE TO THE SALE & PURCHASE OF RESIDENTIAL PROPERTY
(ENGLAND & WALES)
This guide is divided into two sections, as follows:-
1. a brief breakdown of the process from start to finish;
2. a more detailed guide including amongst other things basic information about matters affecting legal title, planning permission, building regulations etc.
This guide is intended to offer a clearer picture of the process that sellers and buyers can expect to follow during the course of their transaction.
The Brief Guide
Agreement is reached, subject to contract
The first part of the process is for seller and buyer to agree a price for the property. This will be dealt with via the seller’s estate agents and agreement will be made subject to contract. This means that either party may withdraw without incurring penalties until such time as contracts are formally exchanged between seller and buyer via their solicitors.
Exchange of contracts is the point at which the matter becomes binding and beyond that point neither party may withdraw without incurring penalties as specified in the contract itself. Penalties will include an obligation on the part of the buyer to pay interest on the balance of the sale price outstanding (the full price less any deposit paid upon exchange). There will also be other financial consequences detailed in the terms of the contract. More information can be found in the second section of this guide.
What can each party do at this point?
Sellers should ensure that they have instructed solicitors and that anything requested by their solicitors has been provided.
Buyers too will need to ensure that their solicitors have everything that they need to get the ball rolling, for example, copy ID and completed questionnaires etc.
Estate agents will need to ensure that each party’s solicitor has details of the other party’s solicitor – this is done by the agents issuing a memorandum of sale to each solicitor. Copies would normally be sent to the seller and buyer direct.
Contract Papers Issued
The draft contract is prepared by the seller’s solicitors and is sent to the buyer’s solicitors together with copies of the title deeds (known as official copy entries). The copy title deeds are obtained from H M Land Registry (usually via the internet where they can be downloaded) and are timed and dated to confirm that they are up to date.
The contract and copy deeds will be accompanied by the completed Sellers’ Property Information Form and Fixtures, Fittings & Contents Form (and in the case of a leasehold property a Sellers’ Leasehold Information Form) completed by the seller. Those forms will be sent to the seller by their solicitor as soon as the solicitor has been instructed.
In addition to the forms referred to above the seller’s solicitor would normally be expected to provide with the draft contract pack the following:-
1. Copy water bill to confirm the amount paid and to confirm that the property is connected into the mains drainage and sewerage systems;
2. Copies of any guarantees available (damp proof, subsidence, timber treatment, central heating etc where applicable);
3. Copy Council Tax invoice.
Sellers should therefore make sure that the above documents are made available to their solicitor as soon as possible after the solicitor is instructed. Original guarantees may be held with the seller’s title deeds by the seller’s lender.
In the case of a leasehold property sellers should also provide copies of any service charge accounts and receipts available together with a copy of the lease (if available) and a copy of the insurance policy for the building. Sellers would normally have a copy of the lease on file although the original may be held by the seller’s mortgage company with the other title deeds. The freeholder would normally supply the flat owner with a copy of the insurance each year when the insurance is renewed.
Finally, in light of the Land Registration Act 2002 sellers may be asked to complete a Land Registration Act Disclosable Interests Questionnaire. The questionnaire would cover interests in or over the land to be sold (for example a right of way) that is not in favour of a registered owner (a seller) and that is not registered against the title to the property. For more information please see the second part of this guide.
What can each party do at this point?
Sellers’ solicitors should ensure that they have everything that they need to prepare a full set of draft contract papers.
Sellers will need to ensure that they have returned everything to their solicitor.
Buyers will need to ensure that they have supplied their solicitor with everything requested by the solicitor when the solicitor’s instructions were confirmed.
Enquiries Raised and Searches Ordered
In most cases the buyer’s solicitor will report to the buyer on the draft contract papers and will at that point send enquiries to the seller’s solicitors. The enquiries will usually be in a standard form (meaning that they could relate to any property – in which case sellers should bear in mind that some of those listed will simply need a ‘not applicable’ response) and supplemented by anything revealed by the draft contract pack. For example, there may be a problem with the legal title, a missing right of way or a restriction in the legal title (see the second part of this guide for more detailed examples). The buyer may also have raised enquiries that the buyer’s solicitor will then forward to the seller’s solicitor for a response.
At this stage the buyer’s solicitor will request the searches. In most instances a plan depicting the property (found with the copy title deeds) would be needed to accompany the search request. See the second part for more information.
For leasehold properties appropriate enquiries will be raised by the buyer’s solicitor. Those enquiries will cover matters such as insurance for the building, service charge and ground rent payments and a request for copy accounts. In addition the buyer’s solicitor will need to receive confirmation from the freeholder that the terms of the lease have not been breached by the seller or the seller’s predecessor.
Survey and Mortgage Offer Received
At around this point the buyer should be in receipt of his/her surveyor’s report together with a copy of the mortgage offer from the buyer’s lender. The survey may raise further structural issues that need to be addressed by the seller before the matter can proceed. For example the surveyor may have recommended the buyer to ensure that planning permission and building regulations approval has been obtained for alterations made to the property.
Replies to Enquiries Received
This paragraph and the one immediately above would normally apply at roughly the same time. Some lenders are quicker than others when issuing mortgage offers and some buyer’s circumstances may mean that the offer is forthcoming more rapidly than in other cases. Similarly, some sellers are quicker at providing replies to enquiries than others, and in some situations the time within which the seller is able to reply to enquiries may depend on whether the seller needs to rely on a third party (for example to obtain a copy of a guarantee).
It can take some time for replies to leasehold enquiries to be received from the freeholder or the freeholder’s managing agents and so sellers and buyers should bear in mind that this can cause delay.
Contracts Signed
Our practice is to report to clients with the contract for signature as early on as possible. If the terms of the contract subsequently change (for example if the price varies from the one agreed at the outset) then clients can always email with confirmation that they are happy with the amendments. Other firms however prefer to wait until all information is in before reporting to the clients. This is purely a matter of preference and we prefer to report early on with as much information as is available and thereafter report to clients with information as and when it arrives (based on a checklist prepared when the draft contract papers, searches etc arrive). We find that this helps avoid delay shortly prior to exchange while solicitors wait for a signed contract to be received back from the client.
Agreeing the Completion Date
At this point both seller and buyer should begin to consider in detail when they would like to complete. It is only at this stage that both parties know when they are likely to proceed to an exchange of contracts and so whilst preferred dates may have been discussed in advance this is the stage at which specific dates should be agreed (subject to contract – see immediately below). Proposed dates should be communicated to the solicitors and to the estate agents.
Contracts Exchanged
This is the point at which the matter becomes binding on both seller and buyer. If either party defaults on the contract (for example failing to complete on the agreed date) or withdraws altogether that party will incur penalties for breach of contract. It is important therefore that both parties are certain that they are ready to commit. Mortgage offers must be with the buyer and his/her solicitor and replies to all enquiries raised must have been received.
It is at this stage that the price will be fixed along with the completion date.
Between Exchange of Contracts and Completion
Seller’s solicitors will obtain from the selling agents a copy of their fee/commission account together with a redemption statement from the seller’s mortgage company (if applicable). The seller will also be asked to sign the transfer deed which will be used following completion to register the buyer at the Land Registry as the new owner of the property.
Buyer’s solicitors will request the buyer’s mortgage advance from the mortgage company and arrange for the buyer to sign the mortgage deed.
At this point both seller and buyer will receive from their solicitors a statement of account giving a full financial breakdown of the matter. Sellers will then know precisely how much money they can expect to receive on completion and buyers will know how much money they will have to provide in order to complete. If there is likely to be a short timescale between exchange of contracts and completion then both seller and buyer should receive a statement from their solicitors prior to exchange together with any documents that need to be signed in time for completion.
The buyer’s solicitor will at this point carry out the final Land Registry search to ensure that the title to the property has not varied since the copy title deeds were issued at the outset. In addition, where the buyer is obtaining a mortgage the buyer’s solicitor will need to carry out a bankruptcy search to ensure that nothing adverse is registered against the buyer’s name.
Completion Day
The seller’s solicitor will receive the completion money from the buyer’s solicitor by direct transfer (known as a telegraphic transfer – TT) and at that point the seller’s solicitor will call the seller’s estate agents to confirm that the keys to the property may be released to the buyer. Any funds due to the seller will then be sent out, usually by same day transfer.
Both sets of solicitors will confirm to the other in writing that completion has taken place and the seller’s solicitor will provide the original title deeds together with the signed transfer deed to the buyer’s solicitor. The seller’s solicitor will also be required to redeem any mortgage registered against the property and would normally as a matter of convenience for the seller arrange for the seller’s estate agents to be paid from the proceeds of sale.
Following Completion
Immediately following completion the buyer’s solicitor will arrange for any Stamp Duty Land Tax to be paid to the Inland Revenue by submitting a cheque and a declaration signed by the buyer. Thereafter (and timescales can vary dramatically) the Revenue will issue a certificate to the buyer’s solicitor confirming that the tax has been paid. The certificate will then be sent to the Land Registry when the buyer’s solicitor applies to register the buyer as the new owner. This process can take up to 2 months depending on the level of applications received by the Revenue and Land Registry at that time.
The seller’s solicitor will provide confirmation to the buyer’s solicitor that the mortgage has been repaid. The lender would at that point provide written evidence that this is in fact the case.
In the case of a leasehold property the buyer’s solicitor will serve notice on the freeholder confirming the details of the new owner. This is to ensure that future service charge demands are correctly addressed.
Following Registration
Once registration has been completed at the Land Registry the buyer’s solicitor will send a copy of the confirmation to the buyer and to the buyer’s lender. Depending on the buyer’s lender’s requirements the original deeds will either be sent to the lender or to the buyer for safekeeping.
More Detail…
This bit is a little dull, to say the least, so it is advisable to stick to reading those parts that relate to your own matter.
Planning Permission
There can be heavy penalties for a breach of planning legislation. It is therefore important that any necessary planning requirements have been met. Planning Permission is required for the development of land and this is defined by the Town and Country Planning Act 1990 (as amended) as “the carrying out of building, engineering, mining or other operations in, on, over or under or the making of any material change in the use of any buildings or other land”. This covers the erection of new buildings, the demolition and alterations and additions to existing building and certain circumstances involving the change of use of a building, for example, commercial to residential. It would also cover the conversion of a single dwelling into flats.
The seller would normally when replying to the Sellers Property Information Form confirm whether any alterations or additions have been made to a property during the last four years and in fact replies to standard enquiries may ask the question but in broader terms, for example, whether any alterations, additions etc have been made during the seller’s period of ownership.
Generally speaking, a local authority cannot take enforcement action for an absence of Planning Permission relating to building work if those works were carried out more than four years ago. Similarly, and again generally speaking, a local authority could not take enforcement action for a change of use if the change took place more then ten years ago. Once either the four-year or ten-year period has passed the previously unlawful works or use become authorised. Retrospective consent can then be applied for if needs be, although more detailed advice would need to be obtained before contacting the local authority.
Sellers (and in fact buyers) should bear in mind that special provisions apply to listed buildings and to properties found within a conservation area. More detailed information can be readily accessed via the website for the appropriate local authority.
Ideally, any planning irregularities should be corrected by a seller before contracts are exchanged although in many circumstances this may not be possible. See below for more information in relation to Indemnity Insurance as this provides one possible solution.
Is planning permission always required?
Certain works do not require express Planning Permission. Such works are excluded from the definition of development by the General Permitted Development Order. The Order excludes from the definition of development matters such as the following: -
1. Maintenance work to buildings, for example, painting the exterior.
2. Internal works which do not materially affect the appearance of the exterior, for example, sub-dividing a room within the property.
3. Development within the curtilage of a dwelling house (the curtilage meaning the land immediately surrounding the house) and therefore a small extension to an existing house could be built without the need for express Planning Permission although this is subject to strict conditions on the extent and siting of the extension. Once the size limit for extensions under the G.P.D.O has been used all further extensions would require express permission. The conditions attached to the G.P.D.O must be strictly observed and therefore if they cannot be met express Planning Permission for the development would be needed.
The above information can only be supplied in general terms because the application of the Order and the application of the planning legislation generally turns on the circumstances of each individual property. The information does however provide a useful guideline. Special rules apply to listed buildings and therefore the exceptions found within the Order may not apply.
Building Regulations Approval
Building Regulations compliance is necessary whenever building works are to be undertaken. Building Regulations Approval is separate from Planning Consent and is required even where the development falls within the G.P.D.O referred to above.
The regulations cover various aspects of the building including structural integrity, fire resistance, means of escape, sound resistance, glazing and electrical works.
Since 1st April 2002 Building Regulations Approval has been required for the installation of replacement windows, roof lights and glazed doors. A Building Regulations Completion Certificate will have to have been issued by the local authority or, alternatively, a FENSA Certificate must have been issued by the construction company. A FENSA Certificate can be issued by certain glazers where they are authorised to do so. The Building Regulations provisions apply to contracts entered into on or after 1st April 2002 and they also apply to orders placed before 1st April 2002 if the works were not carried out and completed prior to the 1st July 2002.
Is Building Regulations Approval always required?
Certain buildings do not require Building Regulations Consent, for example, greenhouses, porches, conservatories (with transparent or translucent roofs) and carports, except where the floor area exceeds 30 square metres.
Whilst Building Regulations Approval can be obtained retrospectively it is always advisable to make an application for consent before starting works. If the Full Plans Application route is followed full details of the construction must be submitted. If, alternatively the Building Notice route is followed all that is necessary is the completion and submission of a simple form describing the proposed works. Once the works have been completed they will be inspected by the Building Control Officer from the Local Authority (although inspections may be carried out periodically during the course of the works) and the Certificate of Compliance will be issued when the works are finished and the final inspection has taken place. It is this Certificate of Compliance, also known as a Completion Certificate, which must be produced to the buyer when the property in question is sold.
If the local authority intends to take proceedings for a breach of Building Regulations those proceedings must generally be taken within twelve months of the infringement having taken place, i.e. the date of completion of the works. However, if the works are deemed to be unsafe and also in certain other circumstances enforcement action can be taken by the local authority outside of that period. For more information on Indemnity Insurance please see below as this can offer a more straightforward solution, depending on the underlying circumstances.
Searches
The main searches carried in respect of properties in and around London are as follows: -
1. The Local Authority Search.
This reveals matters such as the planning history for the building together with any entries relating to Building Regulations Approval. In addition, the local search result will confirm whether or not the road upon which the property is situated has been adopted by the Local Authority meaning that the road is a public highway and that it is maintained at public expense. The search result will also confirm whether or not the property is located within a conservation area and whether or not the building is listed.
There may be other entries registered against the property, for example, improvement grants (where the council has contributed to the cost of upgrading the property as part of a localised regeneration scheme).
2. An Environmental Search Report
This search is carried out to establish whether or not property has been built on or near land that has in the past been contaminated. For example, the building may be situated on or near a site that used to house an industrial process. Certain chemicals may have been used in that process which have left the land contaminated or potentially contaminated. The search is carried out to establish whether or not the property falls within such an area.
3. Drainage and Water Search Result
This search is carried out to confirm that the property is connected directly into the mains drainage and sewerage connections. In more rural areas properties may be connected into a septic tank rather then into the main sewerage facility although this is of course extremely uncommon in and around London. There may, however, be a stretch of private drain separating the flat or house from the mains drainage system and this would normally be revealed by the Drainage and Water Search Result. If there is a stretch of private drain then it may be that the property owner has to contribute towards the cost of repairing and maintaining that drain.
4. Plan Search
This search result reveals information including local crime rates, details of schools in the area and details of any planning applications made in the vicinity of the property searched. These searches are likely to be of particular interest to people buying property where they believe that certain works are being carried out or are likely to be carried out to a property near to the one that they intend to purchase.
The cost of a Local Authority Search varies from borough to borough although, for example, Southwark charge £165.00 at present. An Environmental Search Report costs £34.08, a Drainage and Water Search result costs £45.00 and a Plan Search cost £30.00. These prices are, of course, subject to change.
Service Charge Information
When acting on the purchase of a leasehold property the buyer’s solicitor would normally raise a list of leasehold enquiries. The enquiries will cover matters such as buildings insurance, payment of ground rent, and payment of service charges. The enquiries will also seek confirmation from the freeholder that the freeholder is not aware of any breaches of the terms of the lease.
Where leasehold property is being sold with a share in the freehold it is normally acceptable for the seller to provide replies to the enquires but the seller must in those circumstances arrange for the replies to be countersigned by one of the other freeholders in order to confirm that the information is accurate and that the buyer is not being misled.
Obtaining replies to leasehold enquiries can in some cases take some time. Sellers and buyers will need to appreciate that the freeholder would not normally have an interest in ensuring that the sale proceeds swiftly. Freeholders or their managing agents will often require a fee to be paid (and the fee can vary quite dramatically) before replies to enquiries are dealt with.
The standard contract terms relating to the sale of a residential property state that the seller will only pay service charges for his/her period of ownership and that the buyer will pay for his/her period of ownership. Based on the best information available around the time of completion the service charges are apportioned between seller and buyer. This means that if an estimate has been provided for the year in which the sale completes an apportionment of the service charges will be calculated to the date of completion based on that estimate. Given that the figures for the financial year in which the sale completes are likely to be estimated and that only estimated figures may be available for previous years it is often the case that a buyer would ask (via his/her solicitor) for the seller to retain some money from the sale proceeds to cover any excess service charges relating to the seller’s period of ownership. An excess service charge would apply where, for example, £1,000.00 was estimated as the annual charge for the flat or maisonette with the actual cost turning out to be higher than that amount. Sellers should bear in mind that when a retention is made on completion it would not normally be released until such time as final accounts are prepared for every financial year falling within the seller’s period of ownership. It can often therefore be quite some time before a retention is released. Buyers should make sure that as soon as final accounts covering the whole of the seller’s period of ownership are made available that they provide copies of those accounts to their solicitor in order to enable any retention to be made available to the buyer to pay off any service charge excess or, if applicable, for the retention to be released to the seller. In most cases some of the retention will be handed to the buyer to settle the service charge liability with any balance being returned to the seller.
Mortgages (Seller)
The seller will on completion be required to discharge all mortgages registered against the property. Accordingly, the seller’s solicitors will need from the seller details of all loans taken out and secured against the property. Any registered mortgage will be revealed by the title deeds although, for example whilst only one mortgage/charge may be registered against the title to the property this may be used as security for more than one loan account. All sums outstanding will need to be repaid by the seller on completion and therefore all account details must be handed over.
The seller’s solicitors will be required to give an undertaking on completion (enforceable through County Court or through the Law Society) to redeem all mortgages/charges registered against the property and it is therefore important that accurate information is given by the seller.
Mortgages (Buyer)
It is normal practice for the buyer’s mortgage advance to be requested to arrive on the working day prior to completion. This is because most lenders cannot guarantee the time by which the mortgage funds will be with the buyer’s solicitors. The funds are therefore requested a day early in order to avoid delays on the date of completion itself.
For obvious reasons mortgage offers can take different amounts of time to be issued by the lender. Of course, the individual buyer’s circumstances have a strong bearing on the availability of mortgage finance. A delay in a buyer obtaining a mortgage offer can of course lead to a delay in progress being made in relation to the transaction. Both buyer and seller should be aware of this and the buyer should ensure that they continue to chase their mortgage lender or mortgage broker until such time as the offer is issued. The buyer would also need to ensure that the offer is in accordance with their expectations and that the offer does not contain any onerous conditions of which the buyer was not previously aware.
Pre-Completion Searches
Following the exchange of contracts, the buyer’s solicitors will carry out the following searches: -
1. A title search to ensure that no entries have been registered against the legal title to the property since the date of the copy title deeds provided by the seller’s solicitors with the draft contract package. This search offers a 30-day priority period meaning that no further entries can be made on the title register during that period. The priority period can be extended where, for example, there is a delay following completion in receiving the certificate required from the Inland Revenue in order to apply to the Land Registry to register the buyer as the new owner of the property.
2. A bankruptcy search is also carried out to ensure that there are no pending applications against the buyer. These searches are only carried out where the buyer is obtaining mortgage finance and they are done in order to supplement the financial checks carried out by the buyer’s lender prior to issue of the mortgage offer.
Alterations to Leasehold Properties
This information can only be provided in general terms but in addition to Planning Permission and Building Regulations Approval owners of leasehold property would normally need to seek consent of the freeholder before carrying out alterations. Precise details will be governed by the terms of the lease although it is likely that a Licence for Alterations would need to have been approved and issued by the freeholder before the works were carried out. The works would then have to be carried out in accordance with the detail found within the Licence. This is an issue that sellers may need to consider when they come to sell their property.
Double Glazing
Building Regulations Approval or a FENSA Certificate is required for all double-glazing installed on or after 1st April 2002. The only exception relates to contracts for the installation of double-glazing entered into prior to 1st April 2002 where the works were carried out prior to 1st July 2002.
Electrical Works
More detailed information can be found at www.odpm.gov.uk (go to Building Regulations on the left, then to Documents and Publications, and then Electrical Safety, Part P).
Sellers may encounter difficulty if their homes do not comply with the new rules and if they cannot produce an appropriate electrical safety certificate. In short, approval is required for electrical works carried out since 1st January 2005. On the Office of the Deputy Prime Minister website there is a Building Regulations Explanatory Booklet which provides more detailed information.
Insurance
A seller of a freehold property would normally have in place their own insurance policy to protect the building in the event of it becoming damaged or destroyed. Under the basic contract conditions (Standard Conditions of Sale (Fourth Edition)) responsibility for the property will remain with the seller until completion meaning that the seller will be under a duty to transfer the property on completion in the same physical state as it was found at the date of exchange of contracts. This means that the seller retains the risk in the property until completion. However, from exchange of contracts onwards a seller would not be under an obligation to maintain their own insurance policy. This would therefore leave a buyer to arrange their own insurance from exchange of contracts. The position may be varied under the terms of the sale contract although this depends on the wording of the contract itself and so sellers and buyers will need to rely on information provided by their own solicitors.
In light of the above buyers should consider making their own insurance arrangements in the lead up to exchange of contracts based on the terms of the contract that they intend to enter into with their seller. In addition, buyers should consider that whilst their seller will not necessarily be under a duty to maintain their own insurance policy between exchange of contracts and completion it may be unwise for a seller to fail to preserve that policy.
In almost all cases a leasehold property will be insured by the freeholder or the freeholder’s managing agents as part of the insurance effected for the whole building. A copy of the buildings insurance policy should be made available to the flat owners each year when the policy is renewed although it would normally be requested by the buyer’s solicitors when raising the leasehold enquiries referred to above.
Any premium paid would form part of the service charge and therefore any payments made by the seller would normally be apportioned on completion according to the seller’s and buyer’s periods of ownership.
Buildings insurance would need to comply with the Council of Mortgage Lenders’ Handbook (details of which can www.cml.org.uk/handbook). Whilst this is not necessarily an issue for buyers when they come to buy a freehold property (apart from the fact that they must ensure that their new policy is compliant) it is more of an issue for buyers of leasehold properties as they will need to ensure that the cover provided by the freeholder or the managing agents is satisfactory in the sense that it must satisfy the buyer’s mortgage lender. In some cases an old lease or a poorly worded lease may pose problems where the insurance obligation on the part of the freeholder/managing agent is not wide enough to encompass all of the requirements of the CML. Naturally, this depends on the specific wording found within the lease and it something that no doubt a buyer’s solicitor would raise when a copy of the policy is made available.
Indemnity Insurance
Indemnity Insurance is available in a number of circumstances. Generally speaking, Indemnity Insurance involves payment of a one off premium and a policy can in most cases be put in place using a self issue pack meaning that either the buyer’s or seller’s solicitors can simply fill in a form and send it to the insurance company with a cheque. The insurance cover will be treated as being in place from the date inserted into the Indemnity Insurance Policy. More complicated Indemnity Insurance can be found through certain insurance companies where self-issue packs are found not to apply to the specific problem revealed during the course of the transaction.
The premium payable varies according to the value of the property and a new policy must be put in place to the full market value. It is, however, possible for an existing policy to be topped up by payment of an additional premium.
Indemnity Insurance is available for, amongst other things, the following: a breach of a restrictive covenant, absence of easement (for example, a right of way), lost title deeds, absent landlords, contingent buildings insurance (where the insurance cover put in place in respect of a leasehold property may not be sufficient), breach of planning permission, breach of building regulations approval.
Surveys
Surveys can take the form of either a simple valuation (basic confirmation that the property is worth what the buyer intends to pay for it), a Homebuyer’s Report (a more detailed and in depth investigation), and a full structural survey. When buyers apply for their mortgage (if applicable) they would normally be offered the services of a surveyor by their mortgage lender. The type of survey recommended would depend on the type of property to be purchased including the age and location of the property. In addition past structural history, for example, if the property has been underpinned, would also have a bearing on the level of survey required. Buyers will need to seek advice from their surveyor as to which level of investigation to proceed with.
Declarations of Trust
Where a property is bought by more then one person it is often advisable for buyers to enter into a declaration of trust to reflect the contributions that they will make towards any mortgage, the contributions that they will make towards the deposit, and the contributions that they will make towards the repair and upkeep of the building. The declaration of trust helps cement what buyers agree between themselves and it helps to avoid disputes in the event of the property being sold. The buyers’ solicitor will be able to advise them in relation to a declaration of trust and will also be able to prepare the trust deed itself. In some circumstances whilst the same solicitor could act for joint purchasers in connection with the conveyancing transaction it may the case that one or more of the joint purchasers needs to see independent legal advice before committing to the declaration of trust.
The above information is supplied as a general guide only and is not intended to remove the need for proper legal advice to be sought from a solicitor. The information is also subject to change although every care has been taken to ensure that it is accurate at the time of publication.
