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Conveyancing jargon is confusing. That’s why we’ve put together a great collection of videos on frequently asked questions.

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ADDITIONAL ENQUIRIES

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So, what are Additional Enquiries? They are questions asked by the buyer’s solicitors where the seller is selling a property and the buyer’s solicitors have noticed missing documentation (building regulation completion certificate or planning permission, FENSA, electrical certificates etc; or defective title deeds, such as missing access. If the title is perfect then there should be no need for the buyer’s solicitors to raise additional enquiries. E.g: Missing planning/BR consents, missing access, defective deed. Aaagh!!!!

These can go on … and on … and on … and on (for weeks, if not months if these are not tackled). Quick fixes can include the seller responding faster, or the buyer’s solicitors asking fewer questions or taking a view.

ANTI-MONEY LAUNDERING

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The UK, especially London and surrounding areas, has become the capital of the money laundering world. All buyers and sellers who buy and sell in the UK must pass the UK Anti-Money Laundering Regulations. Risk of breach can include imprisonment as it is a criminal offence not only for the buyer, but also for the estate agent and solicitor. Both buyer and seller must pass ID. In addition, the buyer has to pass money laundering requirements showing the source of funds is not subject to criminal activity. This has to be proved to the solicitor in order for the solicitor to progress the purchase. Ensure both buyer and seller collate all documentation in advance of instructing their solicitors.

BUILDING INSURANCE

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The buyer must put building insurance in place in respect of the property on exchange of contracts. It is essential because if the property is damaged (i.e. fire, flood) they are responsible and could lose tens of thousands of pounds if not insured, of personal expense. If you have a lender, they will not allow you to exchange contracts without you firstly purchasing building insurance prior to exchange of contracts and secondly sending both them and us a copy of your insurance schedule before you exchange. If their interest is not noted, or you purchase the wrong cover which does not meet your lender mortgage conditions (or those of the Council of Mortgage Lenders) then you risk losing your 10% deposit and being sued for other losses such as hotel bills if the seller does not move in time and cost of their removals because your mortgage is delayed or withdrawn.

COMPLETION DATE

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This is the date the seller moves out of the property and the buyer moves in. It is when ownership legally passes from the seller to the buyer. This usually happens around 1.00-2.00pm on the day of completion, but can take place later at any time before 5.00pm. What can go wrong? If something goes wrong on the day then this is known as late completion. This can cause complications including the buyer not being able to move in and the buyer and seller fighting regarding losses (and can be subject to litigation). How long to leave between exchange and completion? This is why the parties should instruct their solicitors to leave sufficient time between exchange and completion for their solicitor to reduce the risk of last minute problems before completion. This is also why the Law Society Contract 5^th Edition recommends 20 working days between exchange and completion. The parties can leave less time and whilst this is becoming more common, it is at their risk of potential loss. The added risk is where the parties leave less than 5 working days between exchange and completion because most lenders require 5 working days between requesting the funds and releasing the mortgage money on the completion date.

COMPLETION MONEY / BALANCE

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This represents the balance to be paid by the client to their lawyer in order to put their lawyer in funds to complete the conveyance. This amount will vary depending on whether the case is a sale or a purchase. On whether it is a freehold or leasehold. On third party disbursements such as stamp duty or the amount of the deposit paid. Essentially, prior to completion, your lawyer will send a completion statement to you, showing what you need to pay, i.e. on a purchase this is the purchase price plus legal costs, plus 3rd party disbursements less what you have paid so far.

CONTRACT OF SALE

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This is the contract signed on exchange of contracts which binds the seller and the buyer. It sets out the terms of what has been agreed such as the property, the price and the names of the parties. It also deals with the process if something goes wrong. It is no longer necessary for the parties to meet to sign the same contract. The seller’s solicitor prepares two copies of the same contract with each party signing their own copy of the document and at exchange, the contracts are exchanged between the respective lawyers, by telephone, at which time the completion date is inserted in the contract, and the deposit transferred to the seller’s solicitors.

COVENANT & EASEMENTS

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The document you enter into with the management company to ensure you agree to pay for any service charges etc.

DEPOSIT

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How much is the deposit? Usually 10%. It can be less but only by prior agreement with all the parties in the chain. The buyer needs to notify their solicitor in advance if they have less than 10% deposit in case the chain does not accept this. What does a deposit do? It secures the property for the buyer. When is the deposit paid? This is paid on exchange. In fact, the seller’s solicitor will not exchange contracts until they have been notified that the buyer has sent all their deposit to their solicitors (as cleared funds). To reduce risks of delayed exchange the buyer should send their deposit to their solicitor by Bank Transfer (CHAPS payment) at least or more days prior to exchanging. Paying by cheque is possible but this can delay matters by a week or more (due to postal delays and then waiting 5 working days for funds to clear.

ENERGY / INFRASTRUCTURE

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This search will reveal if the property you are purchasing is affected by wind turbines, HS2 or fracking, as well as other energy schemes.

EXCHANGE OF CONTRACTS

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This is when a legally binding contract is made. This is also the date where a fixed completion time is set. Until exchange NOTHING is binding; either party can walk away from the transaction with no penalty. The faster the parties exchange the less risk of a transaction falling through. The average abortive rate in England & Wales is up to 37% of cases never reaching exchange of contracts. It is rare for a case to abort after exchange. At exchange the buyer must have their 10% deposit to send to the seller’s solicitor. The minute the exchange takes place the transaction becomes binding – the seller must sell and the buyer must buy at the agreed price and at the agreed time and date.

EXPEDITED COMPLETION DATE

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Expedited completion is where the buyer, seller (or both) want to cut down the days in between exchange and completion stated in The Law Society Contract of Sale Special Conditions, Clause 6 as 20 working days. Expedited work is the additional work the lawyers have to do in the shorter period of time normally allowed to avoid financial loss to you by your lawyer rushing your work, which would normally be 20 working days. We do recognise that clients want to take that risk because of commercial or personal reasons, and most lawyers who do this right, will charge for this additional work. We have a 100% success record in that even though we have been asked to do the work, we have never made a mistake causing our client financial loss. We charge less than many, and discount that extra work at a one off £149 plus VAT. Some firms even charge an expensive hourly rate but we discount ours as above. As a final note, there is always a risk, but if you let us know your date, we will accommodate you if we can after checking our internal completion diaries and if your lawyer is also able to do this for you. Just send us your dates and if we can’t do it we will let you know.

FINAL REPORT ON TITLE

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Just before you exchange contracts, we send you the final report on title, which contains all your documents, including all the searches and enquiries. Some of these documents you will have to sign off whilst others you will just need to read.

Within those documents you have letters that are passed between solicitors. We point out the letters with enquiries and questions for you to look at to make sure everything is ok.

Once you have done that, you have certain documents that we flag for you with stickers that need to be signed off. Some have to be witnessed and others simply need to be signed off.

This goes to you in a bundle with the letter and supporting documents which need to be returned to us to complete.

FIXTURES AND FITTINGS FORM

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This is a list of the items at the property which the seller must complete stating if they are either included or excluded from the agreed price. This form is completed at an early stage by the seller and sent to the buyer (via solicitors) so that both parties understand what is included in the selling price. One alert from Customs and Excise (tax authorities) is that these separate items cannot be used to reduce stamp duty. They have issued warnings that if by separating these items it reduces the purchase price below the next band of stamp duty then that will be a fraud on the revenue and subject to criminal proceedings. In those instances, the seller needs to have a professional valuation of items so they can provide evidence to the revenue that the purchase price is at a reasonable market rate.

FREQUENTLY ASKED QUESTIONS

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At AVRillo we put together a FAQ which is easily accessible through our website and your client dashboard if you have any questions that you would like to ask. Alternatively you could make an appointment through our call surgery about a specific query and we will send you a short video description.

BUYING WITH A GIFT

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What is gift paperwork? The Government AML-Anti Money Laundering Regulations apply to any person introducing money into the purchase. This includes a Donor (someone making a gift, such as a relative). We understand, it can be frustrating to ask the Donor to not only make the gift, but then put them through the added stress of having to complete documents, make certain declarations, and provide ID and evidence showing where those funds came from. It is equally frustrating for us, with many more hours spent than we actually charge you, but it is a necessary complication due to money laundering in the UK. Why is it needed? Due to the billions of pounds being illegally laundered in the UK, through property, to fund criminal and terrorist transactions, the Government requires this procedure before you are allowed to use Donor money in a property purchase. One of the main requirements is that the government needs you to show where all of the purchase money is coming from, and they require us as solicitors to make sure that this is complied with. If you are obtaining a mortgage and getting a gift? If you are getting a mortgage to help you buy the property your lender also needs you and your donor to provide both ID and Source of Funds documents together with signed declarations confirming that the money is a gift. If the requirements of both are not fully satisfied, your lender won’t release the mortgage funds and the government won’t let you purchase, as all buyers have to comply with these. Also if you are obtaining a mortgage, your lender will either insist or prefer you purchase an indemnity insurance policy to cover where the borrower (i.e. you) are subject to a claim at any time within 5 years of your purchase. This is because the administrator in bankruptcy can reclaim that gift against you within those 5 years. It also covers if the Donor gift is disputed, for example by a third party they owed money to, or if they change their mind or the estate disputes that gift. Your lawyer will notify you of this policy, and its cost, if applicable, but it is fairly cheap. What do we do? Our own process is very comprehensive so as to fully protect our clients and safeguard their risk of claim against their lender, or not obtaining their loan, if the gift process does not meet the lender requirements on or post completion. We will send you our gift procedure as soon as you notify us if you are buying with the assistance of a gift.

MONEY-BACK GUARANTEE

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Our 30-day money back guarantee allows you to stop using our services within 30 days. If you choose to do so for whatever reason there will be no questions asked and you will not be charged a penny for our work.

The no move no fee is a policy in which you are protected if the purchase falls through. In the UK we have a near 40% abortive rate, this means around 40% of movers actually fail to complete and the sale falls through. With the no move no fee it’s a one off payment to protect you from potentially losing hundreds of pounds due to a lost sale.

HMLR - LEASE

Quick Read

Temporary ownership of the property. When the lease expires, ownership of the property belongs to the freeholder. This normally applies to flats.

HMLR - TITLE PLAN

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This is the legal document that outlines the property on a plan.

INDEMNITY INSURANCE

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This is completely different from building insurance. This is a specialist insurance policy, which if available will offer cover a legal defect. it is not a fix of the defect, but it essentially it allows buyers and sellers to proceed to be covered, and continue with their legal transaction without trying to rectify the defect or even risk being turned down if they do try to rectify (after which the insurers will not insure the defect as you are on notice of it). The need is normally found when the buyer lawyers check title and find defective title. Examples of defects include: breach of covenants, lack of easements or missing planning or building regulations. In such cases, in order for the buyer to proceed to purchase, they will either need for the defect to be fixed, or in some cases, they can have access to what is called an indemnity insurance policy to cover the loss for that risk. It is not a cure but an insurance policy to cover financial loss. This has now become acceptable in most conveyancing transactions as a way to move. The cost can vary from less than a hundred pounds to up to £1000 for more problematic defects. The higher the risk the more the insurance company will charge for covering that risk. Your lawyer will be able to help you obtain this quote for you. They cannot provide it as it comes from a specialist insurance provider.

LEASEHOLD INFORMATION PACK

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Leasehold transactions are more complicated than freehold as there are a number of additional issues which can go wrong. Whether the lease is short and needs to be extended. Whether there are arrears of service charges Etc; whether there are major works which the buyer will become liable for, various notices, if any covenants (obligations have been breached); whether the buyer purchases with a full set of rights, such as access. What does leasehold mean? Leasehold means the buyer will purchase a term of years left on the lease. The original lease gives the original terms of years when created. This can be 99 years, 125 years or 999 years. To know what years the buyer is purchasing they simply need to deduct the current date, from the original lease date. Work out the years, and then deduct this from the term of years fixed in the original lease.

MORTGAGE - HOW TO CHASE

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Can your lawyer chase by phone? No. Your lender will have specifically stated in their rules in the CML – Council of Mortgage Lenders handbook, that your lawyer can only chase in writing. We sometimes find that chasing in general, even by letter, can cause the outstanding request to be put back because some lenders want to deal with all requests in one go. So if they see a later chase, they bring the previous one back to be allocated with the latest chaser, potentially delaying the response you require by a number of weeks. Can the client chase the lender by telephone? Yes and it’s faster. The fact is that only you have a direct client relationship with the lender, your lawyer does not have this. You get a different telephone line to call, and as you pay your lender fees, and have that direct relationship, they tend to respond to you faster. If you have a mortgage broker acting on your purchase they can also chase the lender directly on your behalf which achieves a quicker response than your lawyer waiting for a postal reply, as they cannot speak to them by phone.

MORTGAGE LENDER'S WORK

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Your lender needs someone to act on their behalf during the conveyancing transaction. This can be either us acting on behalf of your lender or an independent third-party solicitor acting on behalf of your lender.
We must be on your lender’s panel and comply with your lender’s rules during the transaction (which is stated in the CML handbook). The work involved acting for a lender imposes strict duties on the solicitor involved. Some of the duties involved are the tasks which we have listed below for you:

– Taking instructions from yourselves with regards to the mortgage.
– Receiving the mortgage offer from your lender.
– Checking the mortgage conditions contained in the mortgage offer.
– Reporting to you on the mortgage offer.
– Reviewing the lender requirements (under CML handbook).
– Carrying out pre-contract searches required by the lender.
– Carrying out enquiries required by the lender.
– Carrying out bankruptcy search required by the lender.
– Carrying out the OS1 search in the name of the lender as required by them.
– Checking the mortgage deed and other relevant documents for the lender.
– Preparing the document requesting the mortgage funds for you to complete on the purchase.
– Making an application to HMLR for registration of the mortgage on the property

How much are lender lawyer costs? Mortgage providers estimate these in their mortgage offer but this is an estimate only. Check with your lawyer as they will provide the correct figure for you. This applies if you have a lender for your purchase (mortgage). Lender lawyer costs can range from £200 to £600, We charge £397.

MORTGAGE OFFER

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Just under 50% of buyers in England need a mortgage. Getting the mortgage offer is half the battle, the other half is ensuring the buyer complies with their lender’s mortgage obligations. Failure will risk the Lender not releasing the loan money and in turn leave the buyer at risk of losing their 10% deposit. These conditions are set out in the offer itself and in the Council of Mortgage Lender’s Conditions (called CML). The buyer needs to instruct an expert lender solicitor who is used to dealing with these strict obligations. They can appoint the same solicitor who deals with their conveyancing. Alternatively they can instruct someone else or a solicitor appointed by their lender. Whoever they choose, note that the lender solicitor cannot start work until they receive their version of the mortgage offer (which is often towards the end of the purchase). It will be different from the buyer’s version (as it has a legal section) and will not normally arrive until 1-2 days after the buyer receives theirs.

OFFICE COPY TITLE REGISTER

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These are official entries held at the Land Registry for registered land. Each property has a unique HMLR title number. The buyer solicitors cannot start investigating title (or even order searches) until they have these. They are equivalent to a full set of title deeds. The official copy is divided into three parts. Section 1 ‘Property’ register. This records for example how the property is held; whether it is a freehold or leasehold; whether it has full title; easements (benefits and burden that run with the property) and its property address. Section 2 ‘Proprietorship’ register. This records matters such as whether the owner has ‘title absolute’; the name of the owner; previous price paid for the property; it also includes any ‘restrictions’ or ‘notices’ on the property such as a matrimonial Court order. Section 3 ‘Charges’ register. This records covenants (obligations) imposed on the land owner (not to do something, called ‘negative’, or to do something, called ‘positive’). The other key feature found here is any loans and mortgages registered on the property. If the property is a leasehold then it will refer to the leasehold title number. The Office Copy should also include a ‘File Plan’. This is required in order to order searches. It defines the land edged in red.

POST COMPLETION WORK SALE

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Post completion work is carried out after the completion date. It covers applying for and chasing all relevant documents and ensuring they are dealt with and registered. On a purchase, the Stamp Duty has to be paid, the Certificate collected in, the AP1 Land Registration application lodged to ensure the buyer is registered as the new owner on the deeds, to ensure all this is done within the priority period to avoid fraud risk for the buyer. If there is a lease and mortgage then they also have steps needed to protect the buyer. New deeds have to be collected. On a sale, different work, again depending on whether there is a lender, such as paying off the mortgage, waiting for a certificate of discharge, lodging this with the buyer.

PROPERTY INFORMATION FORM

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This is a questionnaire about the seller’s property which the sellers are duty bound to complete which we will then send to the buyer’s solicitor. It covers such items as guarantees, neighbour disputes and boundaries, planning permissions, occupation and other matters. Failure to disclose information may give rise to the risk for the buyer to take action against you. To help speed up the transaction we send you these out at an early stage in the transaction. This will speed up our ability to send out an early contract.

REPORT ON TITLE COVER LETTER

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The letter accompanying the report on title is a letter from us to you with what you need to look at such as the report on title. It asks you to sign off certain documents and to look at the title deeds and the additional enquiries.

REPORT ON TITLE

Quick Read

Just before you exchange documents we make sure all of your documents are in, the searches, the enquires, all of them are in final report on title. Some of these documents you have to sign off while some of them you just need to read.

Within those you have letters that are passed between solicitors. we point out the letters with enquires and questions for you to look at to make sure everything is ok.

Once you have done that you have certain documents that we flag for you with stickers that need to be signed off, some have to be witnessed and some of them just need to be simply signed off.

This goes to you in a bundle with the letter and the supporting documents which need to be returned to us to complete.

REPORT ON TITLE FOR THE BUYER

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Within those you have letters that are passed between solicitors. we point out the letters with enquires and questions for you to look at to make sure everything is ok.

Once you have done that you have certain documents that we flag for you with stickers that need to be signed off, some have to be witnessed and some of them just need to be simply signed off.

This goes to you in a bundle with the letter and the supporting documents which need to be returned to us to complete.

REPORT ON TITLE - PRELIMINARY STAGE

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This document outlines our initial findings on your purchase property and our current understanding of the property. We look at any problems that may arise in the very early stages so you know right away if there is anything you will need to sort out or ask questions about.

SEARCH - CHANCEL

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This search looks for any Chancel Repair Liability, a legal obligation on some property owners to pay for certain repairs to a church, which may or may not be the local parish church.

SEARCH - COAL

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This search will reveal any coal areas close to the property, whether historic or not.

SEARCH - COMPANY

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This search will reveal the company history, including any enforcements against the company or insolvency.

SEARCH - CONTAMINATION

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The Environmental search, also referred to as a Contamination search, reveals whether your purchase property is affected by contamination.

SEARCH - FLOODING

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The Flooding search will reveal if your purchase property is at risk of flooding.

SEARCH - LOCAL AUTHORITY

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This is a document which the buyer solicitor prepares and sends to the seller’s local authority and which raises questions regarding the property. It covers items such as whether the road serving the property should be maintained by the council (i.e. adopted by them rather than the buyer having to contribute privately), whether there have been any planning applications on the property, and a number of other things. The search is against the property only and does not cover the surrounding area. A word of warning – the search will not show any Planning Permissions or matters affecting land or buildings outside the boundaries of the property. You must therefore let us know at the start of the transaction if you require information on any particular point or if you wish us to ask any particular questions of the local authority.

SEARCH - MINING

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This search will reveal any mining areas close to the property, whether historic or not.

SEARCH - PLANNING

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This search will reveal planning application information about the property.

SEARCH - TIN MINING AND CLAY

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This search will reveal any clay or tin mining areas close to the property, whether historic or not.

SEARCH - BUYER BEWARE

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Searches look for potential problems such as restrictions, benefits and conditions which may affect the property and ultimately the buyer’s use and enjoyment of it. All buyers must order searches because of the legal principles such as ‘buyer beware’ and ‘sold as seen’. The Law assumes the buyer will have seen problems the searches would have revealed, had they been ordered. Whilst there are two mandatory searches costing about £250 or less (Local Authority search and Water search), the buyers’ lender (or the prudent buyer) may require additional searches. There are some 60 optional searches but there are three common optional searches which most buyers will take out to better protect them against loss: Environmental search (looking for dangerous substances under or near the property); Flooding search (to satisfy the lender insurers, even if the property is not near a river) and ‘Chancel’ search (which risks losses into the tens of thousands of pounds). Some solicitors are able to negotiate a bundle of discounted ‘searches’ at commencement, whereas if purchased separately, not only does it risk delay on their case by several weeks, but it also costs the buyer more money as they will be buying these individually and lose the bulk discount. The buyer will need to ask their solicitor whether they offer a discounted searches pack.

SEARCH - WATER

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This search looks at the sewerage supply and water connections to the property.

SELLER'S LEASEHOLD

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This document is one of the protocol forms the seller completes.

The seller sends it to their solicitors who send it to the buyer’s solicitors who then finally send it to the buyer. This form has to be completed.

This is so the buyer can know from the seller’s point of view who the property is being managed by, who the freeholder is, the contact details along with things like maintenance service charges, complaints etc. You will want to look at this to make sure everything is correct.

SPECIFIC MEMORANDUM

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This is a specific memorandum of instruction. It’s where there are specific issues, Whilst it doesn’t affect the purchase of the property, you will need to actually think about it. It doesn’t affect your obligations.

There are certain issues that you will need to sign off and send back to us. It’s entirely your choice if you don’t want to send it back to us although this can delay things.

STAMP DUTY

Quick Read

Stamp Duty is a government tax charged to the buyer only. Unless an exemption applies, the buyer is liable to pay for this tax at completion. The buyer’s solicitor can work out the Stamp Duty tax due. They should be able to work this out when they send the buyer their quote estimate. It is based on the purchase price. This is a tax form and the buyer’s solicitor should have the expertise to do this. Most will charge a fee for completing this form, which should be contained in their terms. The benefit of this for the buyer is firstly, it saves them time as the form is quite long and secondly, there are penalty implications if the form is completed incorrectly. So if a buyer pays a solicitor to complete the form, then they, and not the buyer, face the government penalty for getting it wrong.

WHAT IS A SURVEY?

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There are three types of survey. The most basic is the lender’s valuation ‘Condition Report’. This is insufficient for a buyer as they cannot rely on it and they will be at risk as the law provides for ‘sold as seen’. This is simply used by the Lender to ensure that their lending criteria has been met. The best survey for the buyer to commission is a RICS Full Building Survey. This provides an analysis of the property’s condition and includes advice on defects, repairs and maintenance options. The other is a RICS HomeBuyer Report. This looks at the condition of the property, highlights any urgent defects and provides a market valuation and insurance rebuild costs. It also includes advice on defects that may affect the value of the property with repairs, and ongoing maintenance advice.

TR1 - TRANSFER OF OWNERSHIP

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As the buyer’s solicitors this is a document which we prepare and send to the seller. If we are the seller’s solicitor we ensure that the transfer deed has been properly prepared by the buyer. This is a vital document as it passes the ownership of the property from the seller to the buyer. It is dated with the completion date and will be sent to the Land Registry after completion. The Land Registry will use this transfer deed to change their records and show the buyer as the new owner of the property.

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