https://www.pinterest.co.uk/britishfareasttraders2019/
Close
Shopping Cart
Your Cart is Empty

Standard Conveyancing Transactions

source: Scottish Qualifications Authority

The most important aspects of conveyancing are to: 


1. DO IT CORRECTLY

Mistakes can be costly, lose clients, create bad publicity and may take years to discover. 


2. BE EFFICIENT AND FRIENDLY

You may foster client loyalty and be recommended to others. This is a very economic and possibly the most rewarding means of advertising your services. 


3. KEEP IN CONTACT WITH YOUR CLIENT

This will make him/her feel involved and you will cover yourself against any potential misunderstanding. 


It has been said that selling and buying a home can be of the most stressful activities in life. As the professional, it is you who should be ready and willing to provide a competent and effective service and to exert a calming influence. 

Standard Conveyancing Transactions

Suggested Textbooks:

  • 'Property Law & Practice 2016/17' ( College of Law Publications) by Anne Rodell & Clare Harris ( Legal Practice Course Series)
  • 'Conveyancing Forms and Procedures' 4th edition ( the Law Society) by Annette Goss, Lorraine Richardson & Michael Taylor
  • 'A Practical Approach to Conveyancing' 18th edition ( Oxford University Press) by Robert Addey & Mark Richards
  • 'Conveyancing Handbook' Frances Silverman (ed) 23rd Edition (the Law Society)

Standard Conveyancing Transactions

Useful Websites:

Standard Conveyancing Transactions

Tasks of the Seller and Buyer

Aim: 

To provide an initial overview of the procedures a conveyancer will adopt in dealing with the sale or purchase of a simple freehold house as a stand-alone transaction. 


The Law Society Conveyancing Protocol sets out the Society's preferred practice in residential conveyancing transactions of freehold and leasehold property. Its purpose is to standardise, simplify and streamline the conveyancing process. Although its use is not mandatory, it proposes a procedure to reflect 'preferred practice'. Use is not limited to solicitors. Licensed Conveyancers can adopt it, its use must be agreed by both conveyancers. 


Most conveyancing practitioners now use the Protocol in preference to the old-style procedures. Indeed, following the introduction of the Conveyancing Quality Scheme by the Law Society, any firm of solicitors accredited under CQS must use the Protocol in every residential conveyancing transaction. 


Please note that the steps used in the Protocol are not exhaustive and cannot, therefore, be taken as being a complete and comprehensive checklist. 




Standard Conveyancing Transactions

Seller's licensed conveyancer

Steps: Simple Sale- Freehold House

1. ​A client could instruct you prior to sale being agreed, or when a sale has been agreed. 


If your client instructs you when the property is put on the market, your client may have to wait a long time to find a seller. However, subject to your client's agreement, try to be ready to proceed when the sale is agreed by putting in hand some or all of the initial steps. Your client's prior agreement for you to do this will be important because, if no sale is ultimately agreed, you will have undertaken work for which you will expect your client to pay. If the sale is ready to proceed, put the initial steps in hand as soon as possible. 


2. Open a file with a checklist attached to the file.


It is wise to place a full checklist on the file. This will enable anyone dealing with the file to see the stage the work has reached at any time. It will also act as a good memory aid to help you to ensure that you do not miss anything. 


Before or when accepting instructions, you must inform your client in writing of: 'the terms of which instructions are accepted; a complete accurate estimate of fees and disbursements to be charged and if and when they are likely to change' (Specific Requirement (r) of Overriding Principle 3 of CLC Code of Conduct). 


The normal practice is to send your client a 'client care letter' which will either refer to your (separate) Terms of Engagement or set them out fully, together with a copy for them to sign and return and return ( as an indication of their acceptance of such Terms of Engagement), and possibly a questionnaire for them to complete and return to confirm basic details. 


If you are acting for elderly clients or clients you perceive to be vulnerable, you must be satisfied that they are acting of their own free will and not under any duress or undue influence, that they have the necessary mental capacity to enter into the transaction and that there is no suggestion of fraud in the proceedings as required by the Mental Capacity Act 2005. 

Standard Conveyancing Transactions

There are several reasons why it is vital to check your client's identity and carry out 'due diligence' checks at the outset before any substantive steps are taken.


First, the money laundering compliance regime covers the work of conveyancers. 


Second, it is a requirement of lenders under their standing instructions in the CML Handbook and BSA Mortgage Conditions that ID is checked in every case where a mortgaged is involved. 


Last, but not least, it is a specific requirement (m) under Overriding Principle 1 of CLC Code of Conduct that conveyancers regulated by CLC 'comply with anti-money laundering and prevention of financing terrorism legislation'. 


The CLC Anti-Money Laundering & Combating Terrorist Financing Code & Guidance sets out, in the Guidance section, the type of policy and procedure for AML which is likely to satisfy their regulatory requirements. 


The Money Laundering Regulations 2017 require principals of firms to put in place systems and controls to prevent money laundering and the financing of terrorism through property transactions, provide training for their staff and implement procedures for internal and external reporting  of actual knowledge or suspicion of money laundering or terrorist financing to the National Crime Agency (NCA). 


Suspicion is assessed on an objective basis. 


Accordingly, conveyancers need to check the identity of their clients at the outset of the transaction and undertake other 'due diligence' checks to ensure that the transaction will not be used to launder the proceeds of crime. 


A breach of AML Regulations could lead to a criminal prosecution being brought against the conveyancer or senior members of his firm. 


Part 7 of the Proceeds of Crime Act 2002 created various offences of assisting or facilitating the laundering of proceeds of crime. 


The CML Handbook gives separate instructions to solicitors' practices regulated by the Solicitors Regulation Authority at paragraph 3.1.1. and to Licensed Conveyancers practices under paragraph 3.2.1.


Firms are advised to follow their professional bodies requirement as to anti-money laundering but basically they are both required to examine client's photographic evidence, in the form of passport or driving license, and examine a utility bill or other suitable document as set out in the CML to satisfy 'due diligence'. 


It is also a requirement to ensure that the other firm involved in the transaction, are a firm of solicitors, or licensed Conveyancers


Enquire as to the whereabouts of the title deeds of you do not hold these. 


Since dematerialisation, deeds have become less important but there are frequently cases where deeds or documents other than the Official copy of the Register entries might be required. For example, where the property is leasehold, the original Lease, management company share certificate, etc. would be required. It will also normally be the case that Planning Permissions, Building Regulation Consents and Guarantees will be required for the property.


These might be held by a mortgage lender, by the client or by some third party on behalf of the client ( eg deeds may be held in safe custody by another lawyer). 


When instructed by the Seller client, you will need to ask him if the property is mortgaged. If it is, obtain details of the lender and the client's mortgage account number and check whether you are on the lender's panel to establish if you can deal with the repayment of the mortgage on completion. 


The lender may be a Bank, Building Society or other financial institution.  


If you are not on the panel, explain to your client that there may be an additional charge to cover the costs of the lender's lawyer. If that is likely to be the case, ensure that you include this item or a best estimate of the likely figure in your estimate of costs and disbursements or update any estimate that you may have given already. 


However, a majority of lenders are prepared to deal with most solicitors or licensed conveyancers on a sale only basis, although some may not be prepared to instruct sole practitioners.


continuation...

Simple Sale- Freehold House

These notes are for Sellers' Licensed Conveyancers

Ask your client to complete the Property Information Form (PIF) and a Fixtures and Contents Form (FCF).


The Property Information Form (PIF) will give information about the property needed by the buyer. 


The Fixtures and Contents Form (FCF) will differentiate between those items:

i) which the seller is including in the sale

ii) may be willing to sell at an additional price

iii) those that he will remove.


Ensure that you are suing the most recent version of the TA6 and TA10, since it is an obligation under the Protocol. These forms were revised in May 2013. 


Try to obtain as much information as possible at this stage to avoid difficulties arising in the future, eg whether there is anyone other than the seller with an 'interest' (that is, a financial stake in the property) in the property. 


One of the questions in the PIF asks whether there is anyone else over 17 living at the property and who might therefore have a legal interest in the property, eg is he married? If so, does his wife live in the property? 


Are there any other adult occupiers, eg grown-up children or a mother/father? If so, you will need to find out whether anyone has contributed by helping to pay the deposit or by paying the mortgage, or helping to build an extension or carry out decoration at their own cost, or paid in any way towards the upkeep of the property. 


If the answer is yes to any of the above, then check what interest those persons might have. It is best to arrange for them to join in the sale and sign the contract or to agree in writing (without duress) that they have no interest in the property because, if someone other than the Seller has such an interest, the sale could be delayed or fall through. 


The replies that you receive from your client should provide you with basic details of occupiers and possible interests. Be ready to consider the answers and clarify the position with your client in the event of there being in any doubt. 

BRITISH & FAR EAST TRADERS & PARTNERS

[email protected] / britishfareasttraders.co.uk / image credits: janeb13

Referring to steps 4 to 8 below for details of what is anticipated, write initial letters to: 


a) The Estate Agents - step 4

You will write to the Estate Agent to confirm that you are acting for the Seller. If the property has not yet been sold, this might avoid him recommending another conveyancer and your losing the business. Otherwise, you will be acknowledging the sales details received. 


b) Your client, confirming instructions- step 5

If you have not already done so, now is the latest time to make arrangements to fulfill any outstanding procedures under Step 2 b


c. The person who may have recommended your firm- Step 6


You should obtain the title deeds because, whilst most information relating to a registered property is now held at Land Registry, the deeds package might include documents containing information which you will need to produce to the Buyer's conveyancer, eg copies of planning permissions, FENSA certificates, the original Lease. 


It is considered preferable to obtain your client's written authority to obtain the deeds as the deeds holder may require to see this. Such letter of authority might be included with your Terms of Engagement if you ask your clients to sign and return a copy or could be attached to or contained in any initial Instruction Form that you might use. 


british & far east traders & partners

BRITISH & FAR EAST TRADERS & PARTNERS

[email protected] / britishfareasttraders.co.uk

Step 4


If or once the sale has been agreed, your client's Estate Agents will normally write confirming details of the sale agreed 'subject to contract' by way of Confirmation of Sale. 


This will normally be a pro-forma letter or form giving details of the Seller and the Buyer, the lawyers instructed on both sides, the price, the sale conditions and what the Seller has told the Estate Agents is to be included in the sale etc. 


Request a copy of the agents' sale particulars and note in particular references to UPVC windows/doors, attic bedrooms, conservatories, extensions, etc. You will need to check the planning position for any such alterations to a property. 


Acknowledge the details received and confirm that you will prepare and submit a draft contract to the Buyer's conveyancer. The Estate Agent's particulars do not form part of a binding contract. Check any discrepancies with your client if there is any difference between their understanding of the terms of the sale and your understanding. 



Step 5


Write to client and confirm any further specific instructions. 


Check the basic details of the sale with the client. Having noted any differences between what the Estate Agents pro-forma records and what the client has told you in the Property Information Form and the Fixtures and Contents Form, ask him for clarification and specific instructions if there are any differences, eg Estate Agent says sale includes fitted kitchen whilst client says he is taking the oven. Check exactly what is included and excluded to avoid problems arising; with your client's instructions clarified and reconfirmed, there is less likely to be an argument at a later stage. 



Step 6


Write to any recommender of business. 


It is polite and common courtesy to write thanking those who may have recommended your firm and you might get more work introduced to you as a result. 

Step 7


Write to the Buyer's Conveyancer confirming your instructions, noting the terms of the Estate Agent's Confirmation of Sale, referring to any variations confirmed by your your client and stating that a draft contract will be forwarded in due course. 


Give the Seller's name, details of the property, and the price etc. Indicate, if appropriate, how much will be payable for the land and buildings and how much will be payable for the fittings and fixtures. Ask the Buyer's conveyancer to confirm the receipt of instructions from the Buyer. Enquire about the Buyer's ability to proceed. Is there a linked sale? Does the Buyer need mortgage finance? If so, what is the current position? Some practitioners may still mark such a letter 'Subject to Contract'. However, this is no longer necessary following s.1 of the Law of Property ( Miscellaneous Provisions) Act 1989. Confirm whether or not you are proposing to adopt the Protocol. 

british & far east traders & partners, standard conveyancing practice, real estate transactions, real estate

BRITISH & FAR EAST TRADERS & PARTNERS

[email protected] / britishfareasttraders.co.uk

Step 8


a)

i) If your client holds the deeds, ask him to deliver them to your office. 


ii) If these are held somewhere else in safe custody, ask the client to make arrangements for them to be sent to you or write directly to the holder sending your client's written authority for  the deeds to be released to you. 


iii) If there is an existing mortgage, write to the Lender for the release of the title deeds on loan. Such a letter will usually contain your undertaking to the Lender to hold the deeds to its order pending repayment of the mortgage on completion of the sale, or to return the deeds to the Lender in the same condition as they were on receipt. 


If the title to the property is unregistered, the title deeds will be documents in traditional form, ie Conveyances, old mortgages and search certificates, etc. If registered, you may ( subject to dematerialisation) be sent a Title Information Document which should contain all the information that the older styled deeds would have told you, but will be much easier to read and check. 


When you write for deeds, quite often you will be writing to a Bank, Building Society or other financial institution because they will be holding the deeds as security for a mortgage loan. If so, they will not release the deeds without an undertaking that the mortgage will be paid off (redeemed) or the deeds returned. 


In such circumstances, you must give an undertaking to pay off the mortgage in return for the deeds. (BEWARE- You are liable for all undertakings that you give). Therefore, if you do not receive the monies for the purchase after you have given the undertaking and have parted with the deeds, you will still be liable to pay off the mortgage to the lender and, if necessary from your own money! Thus, your undertaking should be carefully worded so that you only undertake to redeem (pay) the outstanding mortgage (s) once you receive the purchase money from the Buyer's conveyancer. 


With dematerialisation, many lenders now hold no deeds at all. You will need to make sure that your client arranges to produce all documents that he may have in his possession. These may have been sent to him after his purchase or a later remortgage of the property was completed. Occasionally, there are no deeds at all. 


b) 

Enquire of the lender at this stage how much will need to be paid to clear the principal mortgage loan and any other loans secured by the mortgage. This will give you a rough idea of whether there will be any sale proceeds. Some lenders will provide the first redemption statement without charge but make a charge for second or subsequent statements. If this is the case, you must make the client aware as soon as possible that there will be additional charges. 


You are asking for an illustrative redemption figure, ie the amount outstanding on and secured by the mortgage, to give you an idea of the likely amount to be repaid on completion and to assist your client in planning his finances. You might ask the lender to give you a figure based on the projected date of the proposed completion. Many lenders will give you a figure for the day requested plus a note of the interest  payable on a daily basis thereafter. 


You must avoid a situation where a lender could come back to you after you have redeemed the mortgage and ask for more money on the basis that there was a second mortgage or a supplemental or  further secured loan which you did not ask about. Therefore, letters should be worded to cover any and all additional loans that you might not know about. You will need to have a firm indication of the total liability now to avoid any unpleasant surprises later.  


For example: 


"Re: Mrs Anybody, 1 Any Street, Anywhere. 


Mortgage Account Number 1234567


Please provide a redemption statement calculated to 30th December 2013 (the estimated date of completion) for all monies outstanding on the above-numbered account and also a redemption figure for any and all further loan(s) outstanding which are secured on this property, together with a note of the daily interest rate (s) applicable thereafter". 


On receipt of the statement, send a copy to your client so that he is aware of the amount that will need to be repaid, highlighting any penalty payments for early redemption or other unusual items. It is important to make your client aware at an early stage of the amounts that will need to be repaid to clear all mortgages. Sometimes, clients can miscalculate their liability. You should ensure that their calculation is correct.