Conveyancing is defined as the legal transfer of a property title from one individual to another. It can also involve the granting of a lien or mortgage against a property. The conveyancing process is a property law term used in the United Kingdom. It involves three steps that are labeled as follows: 1) before the exchange of contracts, 2) exchange of contracts, and 3) completion.
Step one, the most involved phase of the process, takes place before contract exchange. The buyer’s solicitor, or attorney, initiates step one by contacting the seller’s solicitor, who provides him with a first draft of a sales contract for consideration. This draft contract sets forth the price, names of the parties, and other information such as the requirement of a preliminary deposit. The draft contract also contains information regarding the seller’s title deeds. The buyer’s solicitor reviews this document and forwards a copy to the buyer.
During step one, the buyer’s solicitor also makes his pre-contract inquiries. Some of these initial inquiries may be disregarded, if the seller’s solicitor has already provided a property information form. This form provides key information about the property, the exchange of which is important to the conveyance process.
Next, the buyer’s solicitor will contact the local council to determine if there are any problems with the property which must be rectified by the current owner. He may also ask if there is any expected development or road work planned for the area. A set of standard inquiries are also forwarded to the water authority. During this stage, the buyer’s solicitor will send a standard list of inquiries to the seller’s solicitor. These will address such issues as disputes with neighbors, boundary lines, and the existence of any local property planning constraints.
Step one ends when the parties have an agreed upon contract and a completion date is set. This is also the time when the buyer will receive a formal mortgage offer from his lender. To confirm the understanding between lender and buyer, the buyer’s solicitor will forward a mortgage deed to the buyer for signature.
It is in step two of the conveyancing process that the actual signing and exchange of contracts takes place. Upon the execution of the contract, the buyer will also hand over a non-refundable deposit. This deposit is typically 10% of the purchase price.
At this stage, the buyer’s solicitor drafts the actual transfer document and forwards it to the seller’s solicitor. Once this document is agreed upon, it is signed by both parties. Next, the buyer’s solicitor arranges for the execution of the mortgage documents. He will also place the money for the mortgage in escrow for payment to the seller upon the completion of the sale.
It is during step two that the buyer’s solicitor finally completes his necessary inquiries. He will check the Land Registry to guarantee that there is nothing registered against the seller such as an undisclosed mortgage. Certain conveyance fees are also paid, including the Land Registry fees and the tax known as stamp duty.
With step three, the transaction reaches its completion. The seller moves out and the buyer moves in. The seller receives the balance due on the purchase price. The buyer receives the transfer document and the title deeds. All of the prior mortgages remaining on the property are paid and cleared.
To complete the conveyancing process, the buyer’s solicitor will perform certain administrative tasks. The transfer of ownership is recorded with the Land Registry. The deeds are then forwarded to the mortgage lender who will hold onto them until the property is sold or the mortgage is paid off. A statement of completion that summarizes the financial transaction involved in the conveyance is forwarded to the buyer.
The UK conveyancing process is similar in some respects to the process in the United States. US lawyers, however, refer to sale and closing procedures. While the US process contains many of the same elements as the UK conveyancing process, the US system operates with different forms and on a slightly different timetable.