For many people, the process of buying a house can seem surprisingly complex. And this is particularly the case for first-time buyers. In an age where you can apply for and be approved for a loan within hours via an app, the layers of documentation and legalities involved in acquiring a mortgage may be unexpected. Some may not even know they will need the help of a solicitor until the process starts.
This article explores things to consider when you instruct a solicitor for a property transaction.
What does it mean to ‘instruct’ a solicitor for a property transaction?
When you instruct a solicitor, you enter into an agreement with them to represent you and act on your behalf in a transaction. The process of instructing a solicitor is simple and will in most cases start with a short phone call or email to exchange information.
It is important to research which solicitor is the best fit for you as the style and approach will differ among firms; as will their terms of business and costs. Some solicitors may adopt a personal approach where you can pick up the phone and speak to them, while others may communicate with you strictly by email or utilising an online platform. Others might implement a mixture of both styles. You should be confident that your solicitor will be able to meet your needs and represent you to a high standard.
The structure and approach of firms can differ greatly, particularly with property transactions and conveyancing. Traditional High Street law firms which employ solicitors who will be your main point of contact throughout, supported by a secretary. For example, some online firms are divided into various teams led by ‘case workers’ who progress a transaction but are not necessarily qualified; instead, they are supervised by a solicitor or licensed conveyancer.
It is also advisable to check a firm’s accreditations. The main regulatory bodies are the Conveyancing Quality Scheme, the Solicitors Regulation Authority, and some firms are listed by the Legal 500.
There are obvious benefits to instructing a solicitor who is near the property. They will have the advantage of local knowledge and know what to expect when it comes to search turnaround times and relevant planning constraints in the area.
A local solicitor may also have existing relationships with third parties such as estate agents or surveyors. contributing to a speedier and more efficient transaction with better communication. You will also be able to stop by their office to meet with them and this may assist when it reaches the stage of signing documents.
Once you have spoken with a solicitor to let them know that you require legal representation, they will provide you with an estimate of their costs and possibly some initial forms to complete and return. If you are happy with their fees and want to proceed, you can simply let them know this and, if applicable, complete and return any forms you have been provided with. On receipt of this information, your solicitor can then open a file and send to you their formal letters of engagement including a client care letter and their terms of business. You will be asked to sign or express acceptance of these terms and complete an ID check as part of standard Anti-Money Laundering regulations. When this has been done, you have instructed the solicitor, and they can get to work progressing your transaction.
At what stage should I instruct a conveyancing solicitor?
Some sellers may choose to instruct a solicitor once they have put the property on the market, whereas others will do so once they have accepted an offer (or had their offer accepted, if purchasing). If the sale is by private treaty involving an estate agent, the agents will ask you for details of your solicitor following an offer being accepted. They will need this in order to prepare a memorandum of sale, which is a document detailing the parties (i.e. buyer and seller) and their respective solicitors to enable them to exchange initial information such as contract documents.
It is important to note that you are free to instruct whoever you wish.
A solicitor is needed in all types of transactions involving a property. It is possible to proceed without a solicitor, however this is not advisable and there are many pitfalls to be aware of. A solicitor is duty bound to act in your best interests and if your transaction involves a mortgage lender, your solicitor will also represent them and they will not proceed without representation.
What is the difference between a solicitor and a conveyancer?
There may be some confusion as to the difference between a solicitor and a conveyancer. A solicitor in a conveyancing context is a qualified lawyer who specialises in property. A solicitor may practice in all areas of the law and although they may specialise in one discipline they will have broader knowledge of other practice areas, such as civil litigation or estate affairs. It is an essential part of a solicitor’s training to have worked in various departments, both contentious and non-contentious. It is also worth mentioning that solicitors are regulated by the Solicitors Regulation Authority and are duty bound to follow a code of conduct. A conveyancer is not a lawyer but has specific training in property law and both are suitably qualified to progress your transaction. Some may find it advantageous to instruct a solicitor in view of their broader experience or where more complex issues may come into play.
What documents is my solicitor likely to need from me?
The answer to this question depends on what your role is in the transaction. As a seller, it is a good idea to keep a record of any documents relating to works or maintenance at the property, such as planning permission or building regulations, as well as boiler service reports or even an invoice for having a chimney swept. The idea is that the more you can provide your solicitor with, the easier and more efficient it will be for them to provide replies to any enquiries raised by the buyer’s solicitor.
Your solicitor will also send to you, most likely with their opening engagement pack, various forms to complete and return. This will include a Property Information Form and a Fittings and Contents form which are in standard format prescribed by the Law Society. Your completed forms, together with any ancillary documents you can provide, will form a part of the contract pack that your solicitor will send to the buyer’s solicitor.
As a buyer, you have less to provide. However, your solicitor will need evidence of the source of funds for your purchase in the form of bank statements. This is a universal anti-money laundering requirement and will be asked by any solicitor that you instruct. It is therefore helpful to be able to provide this at the outset to prevent any delay with your onboarding.
What is the role of a solicitor in a property transaction?
The word conveyancing refers to the transfer of legal title of property from one entity to another. It is your solicitor’s role to facilitate this process on your behalf and your lender if applicable to work towards completion.
The conveyancing process involves various stages which are generally as follows:
Stage 1 – an offer is made on a property, subject to contract. In England & Wales, this means that no party is legally obliged to proceed and can withdraw at any time without penalty but may still incur costs such as search or surveyor’s fees.
Stage 2 – after the offer is accepted, it is at this stage that a solicitor/conveyancer will be instructed and the process of conveyancing may begin. This will start with the seller’s solicitor providing the buyer’s solicitor with a contract pack. This will include the draft contract, title documents for the property which will be obtained from the Land Registry, forms completed by the seller and any ancillary documentation such as warranties, guarantees or planning permission documents.
Stage 3 – the buyer’s solicitor will review the contract pack documents, order searches and raise enquiries. The purpose of the enquiries is to fill any gaps in the information provided and ensure that, as an example, all works carried out to the property have adequate permissions and sign offs. If there are any title defects the buyer’s solicitor will identify them and advise their client on the options to proceed.
The onus is on the buyer to carry out their due diligence and the principle of ‘caveat emptor’ i.e. buyer beware, applies. It is then also during this stage that a buyer may arrange for a survey of the property to identify any physical defects.
The responsibility is on a buyer to arrange their mortgage product, though a counterpart offer will be issued to their solicitor who will request the advance when required.
Stage 4 – the exchange of contracts is where the deposit is utilised (it does not always change hands but may be held to the order of the seller) and the transaction becomes binding. The buyer cannot withdraw following exchange, at risk of losing their deposit.
Stage 5- you will often hear the phrase ‘completion’ used in the context of conveyancing. This is the final stage where the full purchase price is transferred from the buyer’s solicitor to the seller’s solicitor, on receipt of which the keys can be collected and the property changes hands. After this stage, the solicitor acting for the buyer will submit an application to register the buyers as the new owners of the property at the Land Registry.
In summary, instructing a solicitor can be as simple as sending a few emails or picking up the phone to provide us with your details.
However, undertaking some research first to check a solicitor’s experience, expertise, and local knowledge is a great way to increase the chances of making the best choice. Recommendations from friends and family can also be helpful in narrowing down the options. So a little preparation, together with an awareness of the conveyancing process outline above, can really help you go into your property transaction with more clarity, confidence, and control.
If you would like to discuss this article further, or if you any other questions about Residential Property, please contact Macauley Cubitt.
