The main difference between freehold and leasehold interests is that if you buy a freehold property you and your successors in title have the right to stay on that piece of land forever. However, when you buy a leasehold property you only get the right to occupy the property or land for however long the lease may be. The freehold, behind the lease, is retained by somebody else (the landlord) to whom an annual rent is usually payable for the use of the land.
The reason for the requirement of leases lies in the physical difference between a flat and a house. A flat is usually part of a larger building which is divided up into other flats which are separately owned. It is therefore essential that the rights and obligations of each individual flat owner in the building are regulated with particular reference to the liability concerning the repair and upkeep of the building in which their flat is situate. A lease provides that individual flat owners enter into obligations that constitute a permanent code of regulation for the building.
If you are buying a flat we will advise you whether or not the lease includes all the rights which you will need whilst you live there and is not defective in any way.
Searches are carried out in an attempt to ascertain as much information as possible regarding the property so that you can make your decision whether to buy the property or lease it.
Searches are a requirement of your lender (if applicable) and have to be carried out in any event
Searches come in many shapes and sizes and the amount and type of search depends upon the location of the property in question. For instance, properties in Cornwall will require a tin mining search to be carried out; properties in Manchester may require a coal mining search.
For a full list of the type of searches and what they may or may not reveal please see our related article on searches
Payment of deposit on exchange is the buyer's act of good faith. Customarily a deposit of 10% of the purchase price is paid on exchange to the sellers solicitors although these days often a 5% deposit or less will be acceptable.
If the buyer defaults on the contract and fails to complete then the seller can retain the deposit.
A full explanation of deposits and indeed all aspects of conveyancing transactions can be found in our "Home Buyer" and "Home Sellers" Guides which we send to all our clients at the outset of residential conveyancing transactions.
It is fairly normal when buying a property to find yourself in a chain of transactions where your seller is synchronising a related purchase from a seller who is in a similar situation and so on. Because each party in the chain will require exchange of contracts at the same point in time there can be, and often is, a frustrating period of delay caused by one party in the chain not being ready to proceed. In most cases there is usually a reasonable explanation for the delay.
For example, one party may not have obtained a mortgage offer or may be awaiting the result of searches.
It should always be borne in mind that your transaction will only proceed as quickly as the slowest link in the chain and the longer the chain, the slower it is likely to move.
If we can, we will give you a written fixed estimate of our costs at the outset of a conveyancing transaction, whether residential or commercial.
Sometimes it is not possible to be certain of the amount of time we will need to spend on a transaction.
We calculate our costs by trying to assess the amount of time we will spend on your transaction.
For example, we do not charge for receiving a letter but we do charge for the time engaged on the telephone, preparing relevant documents and letters, considering letters, documents and so on.
We operate a time recording system so that all time spent on a matter is properly and accurately archived. This makes it easier for us to prepare and justify bills rendered to our clients.
Full details concerning costs are contained in our Terms of Business which we send to all our clients at the outset of any transaction.
Tax is currently payable at the following rates:
0% Up to £125,000
2% The next £125,000 (the portion from £125,001 to £250,000)
5% The next £675,000 (the portion from £250,001 to £925,000)
10% The next £575,000 (the portion from £925,001 to £1.5 million)
12% The remaining amount (the portion above £1.5 million)
Obviously substantial savings in Stamp Duty Land Tax can be made on prices of property around the £125,000, £250,000 and £500,000 mark.
Most contracts place the onus on the buyer to insure the property from exchange of contracts not completion.
However, if the property is leasehold building insurance may be the responsibility of the landlord. If so we will ensure adequate cover by checking the policy and arrange for a note of your interest and that of your lender (if any), is endorsed on the policy prior to exchange.
We strongly advise that you make a new Will or revise your existing Will before completing the sale or purchase of any property, particularly if properties are specifically described in the existing Will.
Please see the Wills, Trust and Probate section of our website.
This is the date you normally move in or out of your property and if you have a related sale you must move on this date in normal circumstances.
Completion dates are normally between 14 and 21 days after the date of exchange of contracts and the date agreed is written into the contract at the time of exchange of contracts.
On completion monies are sent by the first buyers' solicitors to the next sellers' solicitors in the chain and so on up the chain. These monies are sent using the clearing banks CHAPS system.
How soon you are able to move into your new property will depend upon how many such CHAPS transactions there are in your chain and how quick the clearing banks move the monies.
The longer the chain the more likelihood of delay in monies moving from the bottom to the top of the chain.
This sometimes results in frustrating delays in keys being released by estate agents.
Further details of mechanics of completion and all other aspects of residential conveyancing can be found in our "Homebuyers and Sellers Guide" which we send to all our clients at the outset of such transactions.
Within 28 days of completion we have to make a return to the Inland Revenue and pay any Stamp Duty Land Tax.
We then make an application to the Land Registry for you to be registered as the new proprietor of the land.
The Land Registry no longer issue Title Deeds but after completion of the registration we will send you and any lender, copies of the register showing the new entries.
Most lenders do not now require any other documents to be lodged with them and we normally then forward any relevant papers to you for you to keep at that point.
Energy Performance Certificates (EPCs) give information on how to make your home more energy efficient and reduce carbon dioxide emissions. All homes bought, sold or rented require an EPC before they can be marketed. An EPC is valid for 10 years.
We can arrange for an EPC for your home if you need one.