Conveyancing is the process by which ownership of land is transferred between a seller and a buyer. This can include both residential and commercial transactions, although the public conception of the term ‘conveyancing’ is usually related to the process of moving house. Conveyancing is land and contract law applied in a practical context.
In England and Wales, there are both ‘registered’ and ‘unregistered’ systems of conveyancing. Under the unregistered system the seller has to show the buyer documentary evidence to prove his ownership of the land, whereas under the registered system the Government maintains a register of land and land transfers take place by notifying the Land Registry of the change of ownership.
How does a conveyancing transaction work?
There are three stages to a typical conveyancing transaction:
- The pre-contract stage, which is the longest and involves much of the legal work;
- The post-contract stage (or pre-completion) stage; and
- The post-completion stage.
The pre-contract stage
This involves the following steps:
- Instructing a solicitor: it is essential to instruct a solicitor to act for you as either the seller or buyer in a conveyancing transaction.
- The seller’s solicitor must prepare the pre-contract package for the buyer, which includes the draft contract, evidence of the seller’s legal title to the property and sometimes the results of pre-contract searches and other information relating to the property.
- The buyer’s solicitor must check the documents supplied by the seller and raise any queries by means or questions or requests (known as ‘requisitions), often asking the seller to resolve any problems.
- The buyer’s solicitor needs to carry out relevant pre-contract searches. Many of these will be with public bodies like the local authority and will enable the buyer to obtain information about the property.
- The buyer needs to confirm that he is able to proceed with the transaction in financial terms (usually this involves securing an offer of finance).
- When relevant checks have been completed and amendments to the contract negotiated, the buyer’s solicitor can return the draft contract to the seller. Two copies of the contract are then printed; the seller signs one and the buyer signs the other.
- ‘Exchange of contracts’ signifies the point at which a binding contract has been entered into. On exchange, the buyer will usually pay a deposit.
The post-contract stage
This is usually less onerous and involves the following steps:
- The buyer raises further requisitions with the seller, usually to resolve procedural enquiries;
- At the same time, the buyer’s solicitor sends the draft purchase deed to the seller’s solicitor. This activates the terms of the contract. Once the seller’s solicitor has approved the deed it can be ‘engrossed’ (a copy is prepared and then signed, usually by both parties).
- The buyer’s solicitor needs to obtain the mortgage loan from the buyer’s lender and the money that the buyer has to make up the balance due on completion.
- The seller’s solicitor must confirm with the seller’s lender the exact amount of money required to discharge his mortgage (if he has one on the property).
- Completion can be done in person or by post, whereby the money is transmitted to the seller’s solicitor and the deeds are sent to the buyer’s solicitor.
The post-completion stage
- The seller’s solicitor discharging the seller’s mortgage and sending a receipt to the buyer’s solicitor.
- The buyer’s solicitor must pay any stamp duty land tax due on the property.
- The buyer’s solicitor must apply to the Land Registry for the title to be registered.
Many people are dissatisfied with the present house buying system which can be plagued with delay and anxiety. The Land Registry is developing ‘e-conveyancing’, an electronic system for the buying, selling and registration of land and property in England and Wales to improve the process. To find out how the new system will work visit the e-conveyencing portal of the Land Registry website.
Finding a conveyancing solicitor
If you are moving house and need to find a solicitor, you can look at the Council for Licensed Conveyancers website, consult the Law Society website, and/or search in our solicitor directory.