Lets Lettings | Ware and Enfield
Call Us: 01920 469221 | 0208 3671230

The Legal Process

Buying or selling your home has

been likened to death or divorce: It can be a stressful experience.

But a problem shared is a problem halved. We will help you through

the process. We will liaise with your solicitor to ensure as little

hassle as possible. If you are selling, we will undertake the

marketing and use our best endeavours to suit your requirements

by introducing a suitable purchaser at the best possible price. If you

are purchasing, we can match you to our wide range of properties

on which we are instructed. In either case, your solicitor or licensed

conveyancer will ensure that all the legal requirements are met and

you are selling, or purchasing, in accordance with your

instructions.


To the uninitiated, the legal process can be a

minefield. First and foremost it is essential to understand that the

sale or purchase of land is fundamentally different from buying or

selling anything else. If you agree upon a price to buy or sell a

motor vehicle, but then change your mind, you can be sued for

breach of a verbal contract. This does not apply to land. For over

three hundred years, since the Statute of Frauds in 1677, the law

requires that the sale or purchase of land shall be in writing, signed

and contain all the important terms. So any offer made, and any

acceptance of that offer, which is in writing, should always be

endorsed with the magic words “subject to contract”, to avoid either

party being bound. If those words are not used, then an exchange

of letters could be sufficient to bind both parties. To avoid that

situation, it is better never to put anything in writing. Along with your

conveyancer we will ensure you are not bound in contract by

writing the necessary letter at the right time. If, for any reason, it is

essential to put your verbal agreement in writing, the note should

be worded “I confirm that, subject to contract and survey, I am

prepared to buy (address of property) for a price of £XYZ”. The

reason for adding ‘subject to survey’ is to further limit your offer to a

survey which is satisfactory to you. If you are selling, the wording

would be “I confirm that, subject to contract, I am prepared to

accept your offer of £XYZ to buy (address of property)”.


At this stage there may still be negotiations to

be concluded. For example, does the agreement include, or

exclude, furnishings and fittings? By this is meant any of the

moveables that may be taken from the property without damage to

the structure – “chattels” in legal terminology. Misunderstandings

are very common and should be dealt with at the outset. Carpets

and curtains are the most common chattels. They can be excluded,

or included, in the price. And so can other items. It should be

remembered that the legal definition of “chattels” is “personal

property”. Often, a description of the property will include (or

exclude) “fixtures and fittings”. This can be a trap for the unwary

buyer or seller. As stated, in law, a “fixture” is something adherent

to the property which cannot be removed without damage to the

structure. For example, a hob which is part of a fitted kitchen. As

such, it is part of the property and the seller has no right to remove

it. Unless the contract expressly makes reference to this item being

excluded from the sale, it cannot be removed. It adheres to the

property and is, in law, an immovable. The same can be said for

plants and shrubs in the garden, although light fittings may

generally be removed without damage to the ceiling.


To avoid delay, expense and uncertainty, it is

far better to spell out what exactly can be taken and what cannot.

With the increase in Stamp Duty, especially at the stepped rates, it

is now common for the asking price to exclude “fixtures and fittings”

to avoid falling into the higher duty band. A separate contract and

price is then concluded for these excluded items, additional to the

purchase price of the property. Just be certain, at the very

beginning, as to what is, and what is not, included.


When all is agreed in principle, the seller‘s

solicitor will prepare a draft contract to send to the purchaser‘s

solicitor for approval or suggested amendments. This is because

only the seller knows what title he can give; whether freehold or

leasehold and including any documents or events, such as the

death of the original owner and probate of the will vesting

ownership in the seller plus any encumbrances (easements)

against the title, such as rights of way. The best evidence of title is,

of course, the title deeds or lease and these may be handed to

your conveyancer or, if the property is mortgaged, obtained from

the lending source. The last statement from your mortgage provider

will be a great help. If the title is registered, your conveyancer will

need to know the title number so s/he can obtain all the necessary

information from the Land Registry.


At this stage, when the sale or purchase is

still going through the initial preparatory procedure, either side may

withdraw without liability and can do so right up until contracts are

exchanged. Often, with rising prices and the inherent delay built in

to the system, “gazumping” may occur. This happens when the

seller accepts a higher offer than the one already agreed. Note that

the seller has previously agreed a sale verbally and then reneges

on that agreement enticed by the higher amount. The word

“gazump” derives from the Yiddish word “to cheat”. It does not

mean that the seller is unable to cast around for the best bid; it only

occurs when he has already agreed to sell at a definite price, but

“subject to contract”. There is little that can be effectively done to

stop the practice, as the seller is legally entitled to proceed with the

best offer. The purchaser can, when the offer is accepted, ask the

seller to agree, in writing, to treat with him alone for a specific

period, to allow the purchaser to conclude his enquiries and

exchange contracts. But the seller will rarely agree to disadvantage

himself, especially when the purchaser may still pull out with no

liability whatsoever.


After receiving the draft contract from the

“sellers” solicitor, the “purchasers” conveyancer will send a long

list of printed preliminary enquiries in return covering virtually

everything that needs to be known about the property, including

insurance, guarantees, disputes, any unusual charges and, if not

already agreed, whether the seller intends to remove those fixtures,

fittings, plants, aerial, burglar alarm, telephone, etc. He will also

send off an official search, with a printed list of further enquiries, to

the local authority to see, for example, if the property is subject to

any local land charge or any adverse entries; how drainage is

connected, what building or other development has been granted,

proposed roads, compulsory purchase or mining activities past,

present or future.

Once all these enquiries and searches are

complete and satisfactory, the “purchasers” conveyancer will

ensure that financial arrangements, such as the mortgage offer, are

in place so that the purchase price can be paid on completion, with

the date proposed inserted in the draft contract. At this stage, the

deposit, normally 10% of the purchase price, is forwarded to the

“sellers” solicitor. If the mortgage advance is more than 90%, the

balance is normally sent. The purchaser signs the contract which is

sent with the deposit.

The “sellers” solicitor will ensure his client is

ready to be committed. If so, a contract in identical terms is signed

and exchanged with the purchaser. Both parties are now legally

bound and neither can back out, without consent of the other, as

there would be a breach of contract. The next step is for the

“sellers” solicitor to send proof of ownership of the property,

normally the lease or title deeds. The “purchasers” conveyancer

will check ownership and that it may be transferred to the

“purchaser” in terms of the contract, ensuring there is no

undisclosed mortgage and the seller is not bankrupt. S/he will then

prepare a Transfer Deed or Conveyance, to transfer ownership to

the purchaser, signed by the purchaser and sent to the “sellers”

solicitor for signature by the seller and return. Normally, prior to

completion, the purchaser will receive a statement of account from

his conveyancer setting out the financial position, taking into

account any pre-contract deposit paid to the estate agent and the

deposit paid on exchange. On the day agreed for completion, the

balance of the purchase price is paid to the “sellers” solicitor,

normally electronically. The keys will then be released to the

purchaser who becomes liable for the Council Tax and all other

outgoings from that date.


Even with the best preparation, there are

delays inherent in the system which ensures that each side has the

bargain they agreed, without any hidden liability surfacing after

completion. Selling normally entails another purchase at the same

time. Conversely, your purchaser, unless a first time buyer, is trying

to sell and cannot exchange until his own property has been sold to

provide the purchase money and/or a mortgage has been obtained.

Apart from delays in searches and enquiries, being involved in a

chain of transactions means you can only move at the speed of the

slowest link in the chain. We will do everything we can to smooth

out the delays that inevitably occur. Your solicitor/conveyancer will

do their utmost to keep you informed of progress. But always ask

them the reason for delay; they are there to help and keep you fully

informed.