While it may be possible, in some circumstances, to oversee a property transaction without instructing a legal representative, before embarking on this route, there are several points to consider. Louise Farrow, Partner in Residential Property, outlines the advantages and disadvantages of DIY conveyancing.
DIY conveyancing could be a time saver, if you have the time to dedicate to the process. As the property market is still buoyant, most conveyancers are managing high caseloads and their attention is shared between multiple files. An individual may be able to give immediate attention to their sole transaction and it might mean the process moves at a greater pace than if using a conveyancer due to unprecedented demands.
It could save you money, as you may make an initial saving on legal fees. However it should be noted that all other Land Registry, Stamp Duty and standard search fees are payable. The saving may, therefore, only be in the region of £1,000.
The necessary paperwork, such as draft forms are accessible, deeds and documents are available to download from various on-line stationers and the Land Registry that you can complete yourself. These can be tailored to each type of transaction as required.
Disadvantages to DIY Conveyancing
If you opt to undertake the process without using a solicitor some things remain time-consuming, especially in relation to familiarising oneself with the procedure and the extensive forms required throughout a property transaction.
Most property transactions involve a chain of matters, varying in length and in relation to the number of parties involved. Even if an individual can deal with their part of the chain very quickly, any potential time-saving may be lost as the speed of a chain is determined by the slowest link.
If you have embarked on DIY conveyancing but decided part way through a transaction that it is in fact too complex or time-consuming to continue, then appointing a legal representative belatedly can result in further delays. Various formalities will need to be completed before any work can be carried out which will relate to obtaining formal instructions; evidence of identity and anti-money laundering checks.
Drafting documents may not be straightforward unless the transaction is the basic sale of a freehold house with no unusual features. Even the existence of a management company dealing with communal parts of an estate, can require additional forms and documents. For example, in respect of the transfer of Share Certificates or arranging to retain monies on completion pending final service charge accounts being available so that deficits can be dealt with at a later date.
Other issues can occur, even if a minor mistake is made, which can be costly to personally rectify. You may also incur additional legal fees to appoint a qualified person to correct the error. A mistake may not always be identified until a future transaction, by which time the original parties may not be locatable. This can be both time-consuming and costly to rectify, particularly if clear records of the original transaction have not been kept.
It is not uncommon for a seller to overlook selling a piece of land held under a separate Land Registry title, perhaps garden land bought later than the dwelling house. The new owner may sell the property several years later but not actually own all the land they are trying to sell.
If a major mistake is made it could result in being sued by the other party which could result in significant financial implications.
When can’t I DIY?
There are also some circumstances and transactions where DIY Conveyancing is not permitted. These include:
- When the buyer of a property requires a mortgage. Their lender will insist it has legal representation and will usually require the seller to be similarly represented.
- When the property being sold is in mortgage then the buyer’s legal representative will need to have confidence that the mortgage will be repaid from the purchase monies.
- An individual dealing with the sale will not be able to give this type of legal promise known as an Undertaking and the buyer’s legal representative may insist the seller is similarly represented.
Expert Legal Advice
However, for a reasonable competitive fee, a qualified legal representative (Solicitor, Chartered Legal Executive, Licensed Conveyancer or equivalent) will:-:
- Understand the legal wording and various forms needed for the specific transaction, including efficient drafting of the Deeds and Agreements.
- Be able to explain the nature of each document and each step of the procedure in plain English.
- Represent either a buyer’s or seller’s lender, provided the firm is on the specific lender’s panel of approved firms. It is common for legal firms holding a Conveyancing Quality Scheme (CQS) accreditation to be on such panels.
- Provide the other party’s legal representative with any required formal Undertaking (being a “legal promise” as mentioned above). This could be as simple as the Undertaking to release a signed document in exchange for purchase monies on the day of completion. There are serious implications to the legal firm if an Undertaking is breached.
- Deal with all types of property matters, from more straight-forward freehold property sale to the more complex, including:
- A Freehold house or Leasehold flat on a new-build development, which usually reaches a formal exchange of Contracts before the property has been built;
- Unregistered land requiring investigation of historic documents to ascertain the chain of ownership and subsequent accurate submission to the Land Registry to create a new Land Registry Title;
- Sales or purchases of property or land at auction where all paperwork is dealt with in advance of the auction and formal exchange of Contracts takes place on the day of the auction; and
- Dealing with part of a Land Registry title (for example; selling a piece of garden) which can be unexpectedly involved, particularly where consideration needs to be given to ensure both party receives the rights they need for example., rights of drainage, a right of access to repair and maintain the retained parts, future maintenance and repair of any newly created boundary feature etc.
The most important point to note is that a legal firm will have professional negligence insurance which gives financial protection to a client should any costly error be made during the course of the transaction.
While it may be possible to carry out DIY conveyancing, any time or cost saving may be minimal if an expensive error occurs. Appointing a qualified legal representative will minimise the risk of such an error.