When contracts are exchanged by solicitors it is customary for the prospective buyer to pay 10% of the sale price as a nonrefundable deposit to show good faith however many contracts are exchanged without a deposit being paid.
Exchange of contracts
This is the point at which the agreement to buy and sell becomes binding on the parties who each sign a separate copy of the contact which is then exchanged usually by solicitors acting for the parties as evidence of a written agreement. The exchange of contracts is done by solicitors either informally by phone, formally via surface mail or in person.
Conveyancing solicitor quote
This is the amount that you will be charged for carrying out the detailed work necessary for the transfer of ownership of property. It usually includes several elements which are :-
- the solicitors own charges for the work done by the law office
- the cost of any expenses or disbursements incurred
- tax which includes :VAT on the legal fees, stamp duty which is a tax charged on the transfer of property once the value exceeds the current threshold.
Fixtures and Fittings
A comprehensive questionnaire relating to fixtures and fittings should be completed by the seller prior to exchange of contract. It is the client and not the solicitor who is required to complete the form. The form becomes part of the contract and is used to make sure that there is no confusion as to what is included in the sale. Fixtures are items that are firmly attached to the building for sale while fittings are those that are less firmly attached.
Property Information Pack
This is a number of questionnaires to be filled out by the seller before the exchange of contract takes place. The pack includes different forms pertaining to fixtures, fittings, household contents and requests for guarantees, warranties, consents together with boundary and disputes information. Completion of the Property Information Pack is primarily the clients responsibility and should be undertaken seriously as errors can result in claims for mis-representation and subsequent damages payments.
Purchase of the freehold reversion for a leasehold property
This happens when a person buys a leasehold and a freehold of the same property that were formerly owned by different individuals. This type of purchase by one person allows for the separate titles to be merged into one giving full control of the land or property.
Redemption of mortgage
This is the process of paying off a loan secured on property. The lender holds a mortgage to guarantee the loan which has to be fully paid before a buyer can have full rights over his property.
Government tax levied on the purchase of a property. The stamp duty goes to the chancellors coffers and is dependent on the property value. The amount of tax is simply a percentage of the property value once that value exceeds the current threshold. In some areas of the country there is no stamp duty. Stamp duty is usually included in our low cost conveyancing quotations but is not part of a lawyers charges being a tax due to the government
Statutory Declaration for Title rectification
A certificate used to remedy inaccuracies in the title of a property. It is usually used to declare rights over some property established by the passage of time which includes rights of way and occupation of land.
This is a document that attests to the ownership of the property. It also contains the list of previous owners and spells out the rights and responsibilities of the owner. Title deeds are now mainly found electronically at the Land Registry. For further details on electronic registration of title deeds please visit the Land Registry website.
Transfer of Equity & Deed of Gift
Equity is the difference between the actual property value and the unpaid mortgage. Transfer of equity happens when one or more joint owners of a land or property decide to transfer their share to another property co-owner. The term transfer of equity is used if the transaction involves money. When no money is involved the term used is deed of gift.