Duty to Disclose
In conveyancing transactions, the seller of a property has a duty to disclose any previous or existing disputes with the owners of neighbouring properties to the buyer. The seller will be sent Sellers Property Information Form (SPIF) early on in the process. This form requires the seller to provide information about many different aspects of the property. Section two of the SPIF asks whether there have ever been any disputes with neighbours about issues such as planning consent, loud music, boundaries, or parking, and whether any complaints have been made either by or against the sellers. As a seller, it is important to declare any issue that has ever occurred with the neighbours, no matter if it has been resolved or seems trivial. The buyer has a right to know. The SPIF also requires sellers to provide further information if they know of any issues that may lead to disputes in the future.
There are several common occurrences that lead to disputes between neighbours. These include excessive noise making, boundaries, parking, shared access to a property, and overhanging trees. If any of these matters is a point of contention between the seller and their neighbours, the buyer needs to know about this. It could affect their decision to buy the property or the price that they are willing to pay. In order to avoid losing a sale or having to renegotiate on price, it is best to try to solve any outstanding issues with neighbours before putting a property up for sale. Resolved disputed are much less likely to be an issue for buyers.
Most Common Disputes
This issue usually involves a complaint being made against the neighbours, rather than the seller. Of course, if the seller is the one making excessive noise, this is fairly easily solved by reducing noise levels. This should not be a problem for the buyer, as the seller will have vacated the property before they move in. A complaint against the seller is only an issue if it is unreasonable. For example, if a neighbour is extremely sensitive and complains about only a small amount of noise, this could cause a problem for the buyer as it is likely they will also receive unreasonable complaints.
A more likely scenario is that a dispute has arisen due to the neighbours making an excessive amount of noise. This could be from playing music loudly (especially late at night), having large amounts of visitors, regular fighting between a couple, or having very noisy children or animals at the property. The first step in resolving such disputes is simply to talk to the neighbours. They may be unaware of how the noise affects you. If the problem continues, keep a record of any incidents that occur. If the neighbours are tenants, this can be taken to their landlord. If they are the owners of the property, you can contact the Environmental Health Officer (EHO) from your local authority, who will measure the noise levels. If it is decided that the level is high enough to constitute a nuisance, the EHO has powers to intervene, even by seizing the equipment used to make the noise.
Boundary disputes are disagreements about which property a tract of land belongs to. There should be a plan included in the title documents that shows all the land belonging to a property. Unfortunately, these plans are not always accurate and land may have been sold or gifted to a neighbour in a later agreement between previous owners. If a neighbour disputes the ownership of land or position of a boundary, you should turn to a charted surveyor for advice in resolving the issue. You can usually receive up to thirty minutes of free advice from a surveyor, to establish the best way of resolving the issue. You may need to pay for them to come and assess the land, if this is necessary.
What is red ash?
Red ash is a material that was used commonly as infill under concrete flooring, particularly in houses built between the 1940s and 1970s. Building materials were scarce during the post war era, so solid floors tended to comprise a concrete slab on top of fill material. The government advocated the use of certain materials, such as red ash, and blast-furnace slag, but there was not much information available with regards to the proper selection of these materials. Many of the materials used, particularly red ash, contain sulphate, which reacts badly when exposed to damp and in contact with concrete.
How does it cause a problem?
When dampened, the sulphate in the red ash gives rise to a chemical reaction with the concrete above it. This is said to blow the floor, making it ‘crown’ or ‘heave’. Basically, the first signs will be cracks appearing and the concrete seeming to rise. Over time, if untreated, cracks will tend to widen and the centre of the floor will usually rise up significantly in a bulge shape, usually with webs of cracks running from it.
The problem with the effects of sulphate attack in properties with red ash flooring is obvious; it is both costly and inconvenient to replace the floors of a property. However, the very presence of this material can cause problems with a conveyancing transaction, even if the floors are currently not exposed to damp and there is no problem. Searches and surveys will show up red ash and in some circumstances, this means a mortgage will be refused. Even if lender is willing to approve a mortgage offer on a property with red ash flooring, the buyer may wish to renegotiate a lower price for the property or ask the seller to remove or treat the flooring before agreeing to continue with the purchase.
Solving The Problem
The only real way to fully ensure there will be no future problem with the floors that have red ash infill is to have it removed. There are companies across the country that are able to provide testing and removal services. However, this is a costly process and will take time to complete. The seller could have this work carried out prior to marketing the property, hoping that the increase in value would cover the costs. Otherwise, it may be necessary to lower the sale price so that the buyer can have the work carried out after the purchase completes. In some cases, the red ash infill is well damp proofed and there is unlikely to be any problem. It is worth getting an in-depth survey or test done to find out the specific level of risk, before deciding on action to be taken.
Buildings insurance is cover taken out to protect the owner of a property in case damage occurs to the structure of the building. If damage occurs to your property that was out of your control, then the insurance will pay out for any repairs or rebuilding that is required. Buildings insurance typically covers damage caused by acts of God (e.g. storms or floods), burst pipes, subsidence, and third-party vandalism. It can even cover you for such things as aircraft crashes and falling trees. If you are purchasing a property with a mortgage, the lender will usually specify what constitutes adequate protection in the mortgage offer.
Do I need buildings insurance?
The simple answer to this question is: yes. Certainly if you are buying with a mortgage, having adequate buildings insurance in place will be prerequisite of getting the mortgage offer approved. The mortgage offer will specify what the building needs to be protected against and when the buildings insurance policy needs to become active. Many mortgage lenders offer discounts on buildings insurance if you take this out with them, as well as the mortgage.
Even if you do not have a mortgage, it is still highly advisable to take out buildings insurance, although it is not strictly necessary. If you do not have this cover, you will be liable to pay for any repairs or rebuilding required as a result of structural damage to your property. These costs can run into hundreds of thousands of pounds. For the cost of an annual policy, it is generally not worth taking the risk.
When should I take out cover?
The answer to this question often depends on the mortgage lender. If you are buying a property with the aid of a mortgage, the mortgage offer will specify the latest point at which buildings insurance needs to be in place on the property.
In common law, the buyer becomes responsible for any damage to the property from the point of exchange of contracts. The exception to this is if the damage can be shown to have been caused by a lack of due care on the part of the seller. The standard conditions contained in the contract state at point 5.1 that the seller maintains responsibility for the property until completion and that any damage caused before this time can render the contract void (even after exchange). However, most solicitors will add a special condition to say that responsibility passes to the buyer at exchange. It is worth checking the specifics of your particular contract and mortgage offer with your solicitor. As a rule of thumb: it is best to have buildings insurance arranged and ready to go live at exchange.
Grants of Probate
A Grant of Probate is a document drawn up by the Probate Registry, which entitles any person appointed as the Executor of a Will to take all the necessary actions involved in dealing with the estate of a deceased person. A Grant of probate is recognized by banks, building societies, solicitors and all other professional bodies you may have to deal with as the Executor of a Will. Securing a Grant of Probate is an added security step to making a Will. Anyone could produce a document that they claim is the Will of the deceased person and attempt to access funds and assets belonging to the estate. Most large institutions would have no way of checking the truth of this claim of dealing with such a person. By obtaining the Wills and Probate, the Executor is able to provide sufficient proof of their identity and rights of access to satisfy these companies.
When is a Grant of Probate Required to Sell a Property?
It may be easier to ask “When isn’t a Grant of Probate required to sell a property?” The answer to this is that the only case in which a Grant of Probate is not required is when a property is owned on a joint tenancy basis, but only one party has passed away. In such a case, full ownership of the property automatically passes to the surviving owner and they have full rights to do as they wish with the property. If they wish to sell, they are free to do so. If both parties to a joint tenancy have passed away, then a Grant of Probate will be required by anyone acting as an Executor to either party’s Will. In any other case involving the sale of property registered in the name of a deceased party, a Grant of Probate will be required to sell.
Obtaining a Grant of Probate
There are two steps involved in obtaining Wills and Probate from the Registry.
Step one is to swear an oath confirming that you are the correct person to deal with the estate of the deceased. Today, this simply involves filling out a form with your details and details of the deceased, which you will then sign.
The second step is dealing with taxes. There will potentially be several forms that need to be filled out and submitted to HM Revenue and Customs, regarding issues of inheritance tax. However, if the property is worth less that £325,000, you will most likely only have to fill out a very basic form.
Once these steps have been undertaken, the Probate Registry will issue an official Grant of Probate document. This is an official certificate that entitles you to access bank accounts and anything else that is required to wind up the estate of the deceased. Any action you take using the Grant of Probate must be in line with the wishes of the deceased as stipulated in their last Will and Testament. Using the assets of the deceased in any other way will count as fraud, misrepresentation or theft and could land you in serious legal trouble.
Adverse Possession is the official legal term for what most people know as “squatters’ rights”. It is the process through which someone is able to claim title to a property, without having to pay any form of compensation to the current owner, based on their having been in possession of the property for a specified period of time. In other words, if someone has lived on or used property for a fixed period, they may be able to claim adverse possession and become the registered owner of that land, without paying for it. It is important to note that the occupation of the land does not count if it was part of a contractual agreement.
What type of land can be claimed through adverse possession?
Any type of land can be subject to adverse possession, be it residential, commercial or agricultural. The majority of adverse possession claims focus on residential property, as it is easier to show continuous possession and circumstances are more likely to arise where someone could occupy a residential property for a long period without a contract, than with any other sort of property.
How long does land need to be possessed?
Regulations put in place in 2003 made changes to the way in which “squatters’ rights” traditionally worked. In the past, a claim for adverse possession could be made for any property, if it had been occupied by the claimant for 12 years. This claim would go through, as long as possession over the required term could be sufficiently proven. Since 2003 this has changed. For freehold properties, a claim can now be made after 10 years, whereas a leasehold property must still be occupied for 12 years. In either case though, the owners of the property are now notified of the claim and asked whether they give permission for ownership of the land to pass to the claimant. If the owner refuses, the claim will not go through.
Factors affecting the decision
If the current owner of the land gives permission for the claim to go ahead, there are certain factors that have to be proven by the claimant in order for it to be successful.
The most important thing that needs to be proved is that the claimant really has been in continuous possession of the land or property for the specified period. The more documentation that can be provided in support of this fact, the more likely the claim is to succeed. It is important to be honest and realistic when making a claim.
Another important factor in the success of an adverse possession claim is the circumstances that surround the possession. Most importantly, the land must have been used or occupied intentionally, not as the result of a mistake. If for instance, the possession is due to an error in defining boundaries of a property, which was not apparent to the owner or the person using the land until years later, the claim would be rejected.
Seeking help from a property solicitor
When claiming a right of ownership through adverse possession, it is very important to seek the help of an experience conveyancing solicitor who is experienced in assisting with such claims. There is a lot of complex legal work involved and a burden of evidence on the claimant. Having a specialist conveyancing solicitor on side will significantly improve the chances of a claim being successful.
Freehold and Leasehold Properties
One of the most difficult things about buying a property is all the strange terminology that you need to get your head around. Many people become confused when they encounter the terms freehold and leasehold. So, here’s a simple guide to explain the difference.
Most Freehold properties in the UK are houses. When you purchase a freehold property, both the property itself and the surrounding land on which it stands are owned by you outright. There is no time limit on ownership of a freehold property; you can retain ownership and live in your property for as long as you like. You are entitled to make any alterations or renovations you choose to a freehold property, so long as they fall within any legal constraints and comply with planning regulations.
The advantages of freehold properties speak for themselves. You have control over what happens to the building and freedom to make whatever changes you desire. You are also able to remain in the property for as long as you like, until you choose to sell up and move out.
Flats in the UK tend to be leasehold properties. Leasehold do not give you outright ownership of a property or the land on which it is built. What you purchase when you buy a leasehold, is simply the right to live in the property for a specified length of time. This time limit tends to be around 100 years in total. However, when the leasehold is sold, it does not get reset. This means that if someone has purchased a 100 year lease and is selling it after living in the property for 30 years, there will only be 70 years remaining on the existing lease. Information pertaining to the length of time left on a lease should be clearly stated on the estate agent’s details. Make sure you find out this information before even considering making an offer on a leasehold property.
Leasehold properties also entail an obligation to pay ground rent and service charges, which are used to cover the cost of maintenance and repairs. This is paid to whoever owns the freehold on the property. Often the amount payable is negligible, having been set when the lease was first created, many years ago. Make sure you are aware of and can afford to pay any such costs before purchasing a leasehold property.
Commonhold or ‘Share of Freehold’
Commonhold properties have only been available to buy since September 2004. They are generally found as part of an apartment complex or a block of flats. In simple terms, a commonhold exists when a several people have mutual ownership of a building, each owing a separate apartment or flat within it on a freehold basis. In such a situation, there is no landlord or freeholder who owns the entire building. Decisions pertaining to the building are made on a democratic basis by all the owners of the different flats that comprise it. Responsibility for maintenance and repair of common areas is also shared.
Everything you need to know about contract races.
What is a contract race?
A contract race is a situation in which contracts are issued to two or more potential buyers. These buyers then enter into a ‘race’. The first to be ready to exchange contracts and complete, wins the race and gets to buy the property.
What might provoke a seller to issue a contract race?
There is a variety of reasons that a seller may decide to issue contracts to multiple buyers. It is very unusual for two buyers to be issued with a contract at the same time, at the beginning of a sale. Generally, a contract race is issued if there have been problems with an ongoing sale. If the buyer has been slow or shown little enthusiasm about completing, the seller may issue a contract race to put pressure on that seller to complete. In this case, the original buyer is likely to be favoured by the seller and the new buyer seen as back up. In other situations, a contract race might be issued because a seller has received a higher offer from another buyer. Rather than letting the original buyer get gazumped, the seller gives them a chance to purchase the property if they can win the contract race. Lastly, a seller may be in a position where they need to complete very quickly. If they receive an offer from a cash buyer or a buyer who is not involved in a chain, they may issue a contract race in hopes that the sale will progress at a faster speed.
What does conveyancing law say about contract races?
Under Law Society professional conduct rules, where contracts have been issued to multiple clients, a solicitor must immediately make all parties aware that they are involved in a contract race. They must tell their client that a contract has been issued to another or other client(s) and the terms under which the seller will exchange contracts. All parties involved must be made fully aware of where they stand and be given the option to pull out of the purchase.
What are the problems with a contract race?
The most obvious problem to be aware of with a contract race is that someone has to lose. You may win – which would be great. However, if you are not the winner, you will lose all the money you have spent on searches, surveys and solicitor’s fees, you will have wasted all the time you spent working on the purchase and you will have to start looking for a new property. If you are part of a chain, this may collapse if your own buyer is unwilling to wait for you to find another property to purchase and start all over again.
You should be aware that if a new buyer found late on in a purchase, they will have to be made aware of how far the original purchase has already progressed. If they are still happy to enter into a contract race, chances are they think they have a good chance of winning. This buyer may be favoured by the seller and may have been in discussion with them for some time. The original buyer does not have to be made aware of a contract race until a contract is actually issued to the second party. The new buyer may have already had work done towards the purchase and be in a position to exchange very soon after contracts are issued.
Planning House Removals
A guide to making sure your move goes smoothly.
Everybody looks forward to their completion date. This is the date that the sale or purchase of your property is finalised; the seller vacates the property and the buyer moves in. However, the completion date is not set in stone until contracts have been exchanged. Usually, the completion date is set for three to five days after exchange. This leaves little time to make all the arrangements for the move. While it is not advisable to make confirmed bookings prior to exchange, there are some things you can do to ensure you are well prepared for the move, saving you the stress of arranging everything last-minute.
Find the Right House Removals Firm
While you cannot make a solid booking until your completion date is confirmed, it is wise to shop around for removal firms weeks in advance of the anticipated date. You will want to find a company with a good reputation, who you can trust to deliver your belongings to your new home as quickly and safely as possible. The first thing to do is to ask friends and family for recommendations or look for independent reviews of different companies on the internet. Make a shortlist of recommended removal firms, then contact each one for a quote. Quotes will be tailored to your specific circumstances, so you may have to wait a little while for a response.
Once you have received quotes from all the companies, choose the one you wish to use for your move. Contact them and let them know the anticipated completion date. Most companies will agree to make a provisional booking, to be confirmed when contracts exchange. Some companies might push for you to confirm the booking there and then, but you should try to avoid doing so, even if you are fairly sure that completion will go ahead on the anticipated date. House removal firms will often charge a fee if the booking has to be cancelled or rearranged.
It can be difficult to know when to pack, especially if the sale or purchase is being held up by the other party involved in the sale or purchase, or someone further up or down the chain. You could get everything packed away in boxes only to find the sale drags on for three more weeks, meaning you constantly have to unpack things for use. However, it is not advisable to leave packing until the last-minute, because it is often a bigger job than you realise and you will also have a list of other jobs that must be sorted out in the period between exchange and completion. You don’t need to pack everything in advance, but there are some things you can do to get organised.
First, collect a lot of boxes. Make sure you have boxes ready for everything to go in. You should also allocate boxes to different rooms, planning which items you will store in each. Write the room and a list of planed contents on each box. This way, it will be very easy to pack things up, the delivery men will know which room to put the boxes in, and unpacking will be a doddle. Pack anything that you rarely use as far in advance as possible and put the boxes with these things out-of-the-way. It is also a good idea to have a clear out. Get rid of anything you have been holding on to ‘just in case it comes in handy’ or anything you no longer want or need. You can sell these items at a car-boot sale for extra cash and this will clear space and help you to organise everything else.
There are a number of time when quick conveyancing is need. One of the main circumstance is when someone is buying a new build property. Nearly all property developers in the UK require the clients to exchange contacts within 28 days of reservation. In order to comply with this you will need a property solicitor that can act quickly. All of our hand-picked conveyancers are licensed and have experience in completing transactions fast.
What Can You do to Ensure Your Sale Goes Smoothly?
It is very difficult to predict how long a conveyancing transaction will complete from the outset. The average sale takes 8 to 12 weeks. However, the process can be fraught with problems and delays, sometimes dragging on for over a year. Unfortunately for sellers, it is typically third parties acting on behalf of the buyer that hold up the conveyancing process. This means that there is often little or nothing that is within your power to do to move things along. The most notorious parties who cause delays are mortgage lenders, management companies and search providers. Whilst this limits what you are able to influence, there are some things that you can do as a seller to make sure you are always ready for the next step and that everything goes as smoothly as possible.
The Buyer Cannot Act Until They Receive The Sale Contract
As the seller, it is your solicitor who is responsible for drawing up the sale contract. The buyer generally cannot proceed with searches or raise enquiries until the contract has been received by their solicitor. Your solicitor will require certain documents from you in order to draw up the contract. When you instruct your solicitor you will be sent a pack that contains the Sellers Property Information Form (SPIF), a sale questionnaire and a fixtures, fittings and contents form. Completing these quickly and returning them along with certified ID and any documents that relate to the property (e.g. planning permissions, title deeds, Energy Performance Certificates etc) will mean that your solicitor will have everything they need to draw up the contract as soon as possible.
Answer Enquiries as Quickly as Possible
Once the sale contract has been received, the buyer’s solicitor will raise enquiries. Some of these will relate to the property and will only be answerable by you, as the seller. Your solicitor should send you a copy of the enquiries and highlight any that you need to answer. The sooner you respond, the quicker things will move. Many sellers think they can take their time over enquiries as there is a lot more work to be done on the buyers part. However, once they have received and viewed the answers, the buyers or their solicitor may wish to raise further enquiries based on the responses. There can be several rounds of enquiries raised, so it is always best to make sure you answer as fully and as swiftly as possible.
Selling a Leasehold Property
Sales of leasehold properties are always more complex that those of freehold properties. Along with the contract, your solicitor will need to provide a leasehold information pack to the buyer’s solicitor. This information pack will need to be provided by the management company or freeholder and it can often be a lengthy procedure to secure one. It is a good idea to pay for this pack to be provided as soon as your property goes on the market, before you find a seller. This way, you are likely to have it ready to hand when it is needed. It could easily save you a couple of weeks waiting. This will enable quick conveyancing to take place and make the transaction run smoothly.
How To Save A Deposit For A House
Tips and tricks for first time buyers in need of a deposit.
Before you can obtain a mortgage offer as a first time buyer, you will need to provide evidence that you have the funds stashed away to allow you to pay a substantial deposit. At the height of the property boom in 2006, it was common for lenders to agree a mortgage with a deposit of only 10% of the total asking price in place. However, since the economic downturn, it is now much more likely that you will be asked to cover around 20% of the property’s total value.
According to data from the June 2013 House Price Index, properties for sale in England and Wales have an average asking price of £162,621. In order to secure a mortgage on a property of this value, the prerequisite 20% deposit would work out as £32,524.
If you already own a property and are selling and purchasing as part of a chain, you do not need to worry about a deposit, as the funds will come from the sale of your existing property. But how is it possible for a first time buyer to save up this sort of money?
Make Tentative Enquires Regarding a Mortgage
Don’t just assume that you will need a 20% deposit. Talk to mortgage lenders before making an official application to see if they can give you an idea of what you will be able to afford. Some lenders may be willing to accept lower deposits in some circumstances. There may also be special schemes in place for first time buyers. Mortgage lenders can also give you an idea of how large a mortgage you will likely be able to get, given details of your income, employment and savings. Use this as a starting point to set a savings goal for your deposit amount.
Live on a Budget
If you are serious about saving, you need to get really frugal. Whatever little treats you allow yourself on a weekly or monthly basis have got to go. Cut back on anything that saves you time and effort, but costs you money. Get rid of anything that costs money, but is not absolutely necessary. That means takeaways, buying lunch at work, fancy smart phone contracts, expensive beauty products, nights out and keeping up with the latest fashions. You will be surprised how much you can save just by cutting back on unnecessary spending.
Move Back in with Your Parents
This might seem like a step in the wrong direction on the road to freedom and independence. It might seem barely bearable. However, it could be the absolute best move you can make with regard to saving money. If your parents are willing to have you home (and chances are they’ll be thrilled), you could save a huge amount on rent and bills – especially if your folks have already paid off their mortgage and have limited outgoings. If they appreciate your position, they are likely to charge you little to no money to stay with them, which might more than half the time it takes to save up your deposit.