The information required by a conveyancing solicitor for a buyer is more or less the same as that required by a conveyancing solicitor for the seller. In fact, it is sometimes the mirror image of that required by the seller’s conveyancer, however with the following exceptions:
Use of property
The buyer’s conveyancing solicitor should first seek to know the present use of the property intended to be purchased. He should also seek to know what the buyer intends to do with the property once it is purchased. This is because a change of use or alterations in the property may require planning permissions. His advice as to the purchase of the property may also change accordingly. In most cases, the intended use is made obvious, such as a buyer intending to buy a house to live in it. Knowing about the intended use, helps the buyer’s conveyancer to advise accordingly.
Money
It is the duty of the buyer’s conveyancing solicitor to ascertain whether his client has made arrangements for the money to finance his purchase. In fact, he is legally bound to do so. For instance, if the buyer informs the solicitor that £100,000 of the purchase price is to be provided by his savings, it is the duty of the solicitor to inform this to his firm’s Nominated Officer. Due diligence should be exercised in determining if it is reasonable to expect that the client has £100,000 in savings. This is a requirement under the Law Society’s Anti-Money Laundering Practice Note.
The conveyancing solicitor should also ascertain the amount required to pay for the purchase, including paying for land registry fees and SDLT. Fees payable for registering the deal or the land in question should also be determined.
He should also make inquiries into the source of funds. When the property is being purchased through a mortgage, it is the duty of the conveyancing solicitor to inform the lender of the source of fund for the remainder amount. Sometimes, this is sponsored by family members; if this is the case, the same should be informed to the lender with permission from the buyer. And if the buyer does not give permission, the solicitor should cease to act citing conflict of interest. It is also possible that the buyer may inform his conveyancer that part of the purchase money is being provided by the seller. The conveyancer should inform this to the lender as such a situation may give rise to money laundering issues.
Deposit
As stated earlier, the buyer will have to pay a deposit of 10% of the purchase price upon entering the contract. It is not always possible that the buyer has access to the deposit money. It is sometimes funded by the sale of an existing property of the buyer. If such an amount is not made available, a bridging loan can be availed. Nonetheless, the buyer’s conveyancing solicitor should make enquiries with the buyer about the arrangements for the deposit money.
Mortgage
Most residential transactions are financed through a mortgage. It is possible that the client may have arranged for the finance even before consulting his conveyancing solicitor. Nevertheless, it is the duty of the conveyancing solicitor to ask if the finance has been arranged and help him arrange one, if it is not done.
Survey
It is an accepted fact that the principle of caveat emptor applies to conveyancing and hence the buyer is always advised to appoint an independent surveyor to make sure that the property in question does not pose more problems than benefits. The buyer’s conveyancing solicitor should discuss with his client to ascertain if such a survey has been made and advise him to do so, if such a survey has not been commissioned yet. He should also advise his client on the need for an environmental survey of the property.
Situation of the property
The conveyancing solicitor for the buyer should also make enquires about the situation of the property by checking for its proximity to canals, rivers, etc.
Insurance
Once the contract has been entered into, risks associated with the property shall pass to the buyer. The buyer should be informed of this and the solicitor should arrange for the insurance of the property (at the buyer’s expense). There may also be the need to discuss the need for life assurance and building contents insurance.
Who is buying the property?
More often than not, the buyer is married or intends to live with a cohabitee or a friend. In such an instance, it is important that the lender ascertains if the property is due to be held in joint names. If it is not so, a waiver (in favour of the lender) must be obtained from the partner/cohabite/friend.
If the property is to be purchased in joint names, the buyer’s conveyancing solicitor should inform his client about the consequences of such a move and also take note of a possible conflict of interest (in circumstances where the solicitor is required to act on behalf of both parties).
Custody of deeds
In the past, it was customary for the lender to obtain custody of the charge certificates and other documents related to the purchase. But, the Land Regulation Act of 2002 has done away with the need for charge certificates. Besides, lenders are reluctant to store the documents related to the transaction because of the huge costs involved in storing them. Thus, it is now common practice for the buyer to decide about the custody of deeds related to the transaction. He may either choose to keep the deeds with him, or ask the solicitor to send it to the lender, or even ask the solicitor to store the document in his strong room. In all the cases, it is important that the buyer’s conveyancing solicitor obtain proper instructions from the client on the custody of deeds.
The client’s present property
Where the purchase of a property involves selling off the buyer’s existing property, necessary steps should be followed by the solicitor. If the client is moving from a rented accommodation to a newly purchased property, the buyer’s solicitor should advise his client on the required formalities such as giving notice to his present landlord to terminate the tenancy etc.
Instructions in special cases
When the property is question is a newly purchased property, a leasehold, or involves only part of the seller’s property, additional information may have to be obtained.
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