Top tips when buying property
Here are our top five tips to help you:
Whether or not finance is needed, speak to a broker early on in a transaction and preferably before your agent agrees the main elements of the purchase. Raising finance once exchange has taken place, makes for a fraught completion experience for both you and your lawyer.
2. Planning the completion date
If you are selling a property to raise money for your purchase, ensure that the completion date of the sale is on or before the completion of the purchase. This may sound obvious but it will avoid surcharged rates of SDLT being paid at 3% above the standard rates. These rates are paid even where your main residence is being replaced with the Revenue requiring you to claim a rebate once the additional main residence is sold.
You can also avoid the need to use your cash reserves for a deposit, as a deposit held on your sale can be used for your purchase where the property is in England and Wales.
3. Surveyor’s appointment
Appoint a surveyor. He or she will flag items that you may not necessarily have spotted on your brief viewing and may even give some bargaining power and leverage on the price.
4. Your lawyer
Make and keep a relationship with a lawyer and update them on your transaction. This is particularly important where you are marketing a property for sale, to ensure that deadlines, that you or your agent impose, can be met by buyers. A full sales pack with all title deeds, up-to-date searches, planning and building information can be pulled together in advance.
Plan for exchange well in advance. Weeks of delay can be avoided if all the fact finding has been completed in advance. Attended exchanges do still occur so be prepared.If there are any title difficulties, these can be addressed in advance.
5. Your accountant
Take tax advice. You may not be resident in the UK, you may own other properties worldwide or hold a portfolio of investment property. Early tax advice will be required to work out your CGT (Capital Gains Tax) liability on sale and IHT (Inheritance Tax) liability on death.
SDLT matters will be more complicated, where other property is held and often a detailed assessment is required to determine the SDLT rates payable by you. Where your company owns the title to the property, ATED (Annual Tax on Enveloped Dwellings) charges will be made annually and your accountant will need to claim any exemptions in your annual tax return.
You may have very specific requirements which must be conveyed to all parties. You may want to access the property you are buying between exchange and completion with architects and builders to obtain quotes or for interior designers to start planning works. The seller may even agree to you commencing limited works to help you move forward quickly with your plans.
Where you are buying a bolt hole which is a leasehold property, a landed estate owner may own the freehold, for example the Grosvenor or Portman Estate. Do not be surprised when you are asked for onerous references to obtain the landlord’s consent, in lieu of a rent or service charge deposit.
If you are buying a turn key, consider if there are any service charges for the shared estate roads and whether building warranties for any building works are available.
Where you are buying expensive items of furniture, artwork, electrical items, to be left at the property, a full inventory of those items with costings will need to be included. Such items do not attract SDLT but they must be justifiable in their costings.
Sherrards Residential Real Estate team complete £5.4m London purchase
The team advised on a statutory lease extension request, with retrospective licence for alterations as well as other leasehold complexities. They also dealt with a third-party lender’s solicitors which was all dealt with and exchanged in a narrow timeframe for our client.
Mr and Mrs K said “A Great Move. Caroline and her team worked very effectively to unwind a difficult set of circumstances to complete a tricky house purchase”.
A stress free property sale
Have you lived in your home for a number of years and are now thinking of downsizing to a smaller or more manageable property? Although the process has not changed, it is always sensible to be one step ahead of a buyer’s lawyer, particularly if you’d like a quick and stress-free move.
Instructing a lawyer is the first port of call and it is always good to do so in advance of the property being marketed with an estate agent. This will allow time to iron out any issues and pre-empt all those questions that a prudent buyer’s lawyer will raise.
Potential issues that may arise include:
- If the land has not already been compulsory registered, then it may continue to be unregistered at the Land Registry. You will need to dig out your original title deeds for an application to be made. As most land is now registered, it may be worth asking your lawyer to register it at the Land Registry for ease of dealing with it moving forward.
- Where the property is registered, you should check with your lawyer for any entries on the title. If there are satisfied mortgages which have long since been redeemed, then you will need to contact the lender to ask them to notify the Land Registry or provide a form of discharge for your lawyer to send to the Land Registry on your behalf.
- Where you have carried out works to the property, you will need to produce various warranties and guarantees if they are still in date, along with building control completion certificates for new windows and planning permissions obtained at the time. Often duplicate information can be obtained from the council and duplicate FENSA certificates for new windows. However, you may want to draw your lawyer’s attention to these items so appropriate investigation can be made.
- Where the property is leasehold, you should pull together your ground rent and service charge payments, minutes of previous meetings with the management companies and contact details as to where the management pack can be obtained.
- Where there are rent charges demanded or where the property lies upon a freehold management estate, then enquiries will need to be raised and evidence of payments obtained in the form of receipts.
- There may be requirements for statutory declarations to be made as to use of the property or indeed parcels of land which are not in your ownership. It is sensible to draft these in advance or obtain indemnity insurance quotes for a prospective buyer.
Armed with the above, a full disclosure can be made to the buyer’s lawyer at the outset with no hidden difficulties arising at a later date to cause a buyer to withdraw. We are facing a particularly difficult market at present so anything you can do to improve your chances of a successful sale are well worth the effort.
Signing your life away…
Conveyancing Assistant at Sherrards, Gill Talbot, explains what being a witness to a legal document actually entails and examines typical examples of requests for signatures that you might come across.
It seems obvious and easy to sign legal documents correctly, but the number of errors we see here at Sherrards solicitors is surprising…..
The role of a witness is more onerous than you might think. A witness must be a neutral third party with no financial interest, must know the person whose signature they are witnessing and be satisfied as to their identity. The witness does not however have to be familiar with the terms of the document.
A witness must be 18 or over. Contrary to common belief, a spouse or co-habitee can in fact act as a witness, but it is best avoided as it could be argued that they are not neutral. It may sound obvious but it is important to keep your signature consistent.
An individual or a company can authorise a power of attorney to sign on their behalf, but the delegated power of attorney will still require a witness for their signature. In this instance, the witness is verifying the identity of the attorney.
An individual signature
The most common form of witnessing an individual’s signature is after observing the document being signed in their presence. The witness must then sign the document as proof and print their name, address and occupation. The name and address must be legible to allow the witness to be traced should any questions arise concerning the execution. The usual form is as follows:-
Signed as a deed by (full name of individual) in the presence of
Signature of witness:________________________
Name of witness (in BLOCK CAPITALS):___________________
Address of witness: _________________________
Occupation of witness:________________________
It is permissible for a witness to verify two signatures on a document but each signature should be separately witnessed.
Certain Lenders require the Mortgage Deed / Legal Charge to be witnessed by a Solicitor or Notary Public. Some Lenders may also require the Solicitor to provide a Certificate of Execution.
There is more to consider when verifying a signature on behalf of a company, such as the memorandum and articles of association or a person with significant control. Essentially it is usual for two directors to sign without the need for a witness.
Executed as a deed by (name of company) acting by [a director and its secretary] [two directors](Full name of individuals)
Signature of Director:____________________
Signature of [Secretary][Director]:________________
However, since April 2008 and the Companies Act 2006, one director can sign in the presence of a witness using the form below.
Executed as a deed by (name of Company) acting by a director (full name of Director) In the presence of:
Signature of Director:__________________
Signature of witness:________________
Name of witness (in BLOCK CAPITALS):________________
Address of witness:____________________
Occupation of witness: __________________
What requires a signature and what doesn’t?
It is important to remember that whilst plans do not require a witness, they do need to be initialled by each party. Likewise, contracts do not require a witness as these are not deeds.
Certain documents such as Wills require two witnesses. Other documents require each page to be initialled by each party as well as a signature at the end, for example, a power of attorney or assured shorthold tenancies (AST’s). This proves that all terms were read and approved to prevent future misunderstandings.
For international documents, there are government authorised license officials known as notaries who authorise the identity of each signatory. The authenticity of the signature is confirmed by an attached certificate known as an “apostille”. See https://www.notarypubliccentrallondon.co.uk/ for further information.
Electronic and digital signatures are becoming more widely accepted for example for AST’s. However, for leases, contracts and other legal deeds, there is no case law yet as to their validity so electronic signatures are not currently common place. Land registry have published some guidance.
Don’t forget, until such time as electronic signatures are valid for all legal documentation, originals of all signatures are required, and scanned documents will not be permitted.