What is conveyancing?
Conveyancing involves the legal transfer of title. Normally, this takes upwards of 8-10 weeks (second-hand house) and longer for a new house depending on the stage of construction the house is at when you place your booking deposit with the Auctioneer. Other items which may delay the process is the complexity of the title and whether there are other areas of concern such as planning problems etc. Outlined below is a brief synopsis of the legal process involved so that you will be aware at all times of the progress of your transaction.
The Legal Process
1. Select your home (having worked out what you can afford in conjunction with your lender).
2. Pay Booking Deposit directly to the Auctioneer.
3. Appoint MMS Solicitor.
The Auctioneer will then write to both the purchaser’s solicitor and the Vendor’s solicitor advising them of the terms of sale. If contents are passing with the sale, then an inventory of contents should be attached to avoid any ambiguity.
It can normally take up to 3 weeks for the purchaser’s solicitor to receive contracts (Longer, if it is a receiver that is selling the property). During this waiting period, the purchaser will usually be organising their mortgage (if they are obtaining one). Also, the purchaser should have an engineer or other suitably qualified person carry out a structural survey (Only applies to second hand houses). With second hand houses, it is buyer beware – in other words once a house is purchased, you cannot go back to the vendor if you discover a serious fault with the property which would have been apparent if a survey had been carried out.
4. Vendor (Seller) Solicitor will send out Contracts in duplicate to your Solicitor together with copy title documentation.
5. Your Solicitor examines title and raises any queries with the Vendor’s Solicitors. This is done by way of correspondence. Common queries that can arise relate to planning, missing documents, rights of way, flooding, management fees, common areas.
Your solicitor may ask a purchaser at this stage to have their engineer check ‘Identity’. This means the engineer will check that the boundaries on the ground match the boundaries on the map. They will also check that the septic tank and percolation area are within the confines of the site. Sometimes the purchaser’s solicitor will be given a Declaration dealing with the boundaries and this will not be necessary. It should be noted that boundaries are a matter for the purchaser of a secondhand house to check – the vendor is not obliged to deal with boundary queries unless it is a new house.
6. Your bank will send out a letter of loan offer both to you and your solicitor.
When you call in to sign the contracts you will also sign the loan documents. This appointment will usually take upwards of one hour to go through all the documents.
Once all the bank documents and the contracts are signed, your solicitor will return the contracts, plus a deposit amounting to 10% of purchase price (less the Booking Deposit paid to the Auctioneer). Once the vendors have signed the contracts and returned one copy of them to your Solicitor, then both parties are deemed to be committed to the transaction. It is not possible to pull out of the sale at this stage.
7. At this stage, your Solicitor will raise a number of further questions (known as requisitions on title) on your behalf with the Vendors Solicitor such whether there any disputes affecting the property, whether there are any boundary problems or tax queries etc.
8. These queries must be replied to before the completion of the transaction can take place.
9. In this period, your Solicitor will also be preparing the Deed of Transfer. This document transfers the property from the Vendor to you.
Regarding the closing date i.e. the date you will get keys, this is set by the vendor. Approximately one week before the closing date, your solicitor will order your loan funds. Please note that once the cheque is ordered it can take your lender 3-4 days to process the request. It can take another 3 to 4 days for the loan funds to be transferred to the purchaser’s Solicitors Client Account. If there are other items outstanding such as life policies etc this can delay even further. Life policy, home insurance, direct debit mandate are all matters for the purchaser to deal with directly. Your solicitor has no control over these delays. Purchasers should double check with their bank shortly after they sign contracts that all items are in place for their loan funds to issue.
With new builds, the builders solicitor will contact the purchaser’s solicitor and advise that the house is ready for snagging. The purchaser usually has ten days then to organise an engineer to go to the property and snag it. Once the purchaser is happy that the snags have been attended to, then the sale will close.
Once the vendor’s solicitor has all the closing documentation put together and the purchaser’s solicitor has the monies then the sale can be completed.
10. On the closing date, the balance of the purchase price (90%) is paid over to the Vendor’s solicitor and they hand over all the original title deeds and various declarations. The purchaser’s solicitor will also carry out searches such as Judgment and bankruptcy searches etc on the closing date. If both parties are satisfied, then the keys for the property can be released. The purchaser will be able to pick the keys up from the auctioneer.
Whilst a purchaser’s solicitor or a vendor’s solicitor will have a good idea of when a sale is to close, it is imperative that you do not arrange for furniture to be removed or delivered, or hand in your notice to the landlord until you check with the solicitor first. We have seen numerous instances where sales have been delayed because of the issuing of loan funds, solicitors being on holidays, tenants not vacating properties, etc.
Post completion, your Solicitor must send the deed of transfer to the Revenue.
Commissioners for stamping. This is the process whereby the solicitor pays the stamp duty on your behalf. When this document is returned stamped from the Revenue Commissioners, it will be sent to the Land Registry together with your Deed of Mortgage and you will be registered as the owner of the property.
11. Once registration is completed, the title deeds will be sent to your Lending Institution. A copy of the registration complete notification will be sent to you when the process is concluded. It normally takes about 3 to 4 months for registration to be completed in the Land Registry. Occasionally, this can take longer depending on the circumstances. Just because registration is not complete does not mean that you cannot sell your house. If you are a cash purchaser, the Title Deeds will be stored in the Purchaser’s Solicitors Deeds safe.
For the most part, sales and purchases go through with relative ease. Occasionally an issue will arise that could complicate or delay a sale. It is imperative that the solicitor deals with these queries pre the signing of the contracts.
Please see below some common conveyancing queries that we would see regularly:
- A receiver is selling a house – When a receiver is selling a property, it can take several months to receive contracts. There is nothing a purchaser’s solicitor can do about this. Once the purchaser’s solicitor has received the contracts, it is usual that there is little/no information pertaining to the property furnished. This is because the receiver does not know anything about the property and will generally not have the co-operation of the actual owner. This means that there will be extra work involved for both the purchaser and their solicitor and this can take time. In some cases, depending on the extent of the deficit of information, your solicitor may have to charge extra as there is a substantial amount of extra work to be undertaken not just to ensure the purchaser can buy the property but also that the purchasers bank is satisfied with the title. If the bank is not happy with the title, they will not authorise loan funds to issue.
- There is no official right of way to the property being sold. It goes without saying that it is imperative that if there is a road being used to access the property that it is registered or that Declarations re long usage are furnished. The lender will not release funds until the purchaser’s solicitor can certify that the right of way has been dealt with.
- Septic tank is in another’s person property. Similar applies as number 2 above.
- Engineer says that the property does not comply with the Building Regulations. Normally, when purchasing a second-hand property, the purchaser’s solicitor will be furnished with a certificate of compliance with planning permission and with building regulations. These certify that the property complies with the regulations at the time the certificates were signed. Obviously, regulations change yearly, if not monthly. Therefore, if an engineer attends the property five years after the certificate is signed, then the house will not be in compliance with current regulations. From a solicitor’s point of view this is not an issue provided there is a certificate of compliance with building regulations on file. A purchaser cannot expect a vendor to bring a property up to date with building regulations prior to purchasing. This would be an unreasonable request.
- The common areas are not in charge. This occurs where you are buying an apartment or a house in an estate. Your solicitor might say after reading the contracts and copy title that that the common areas are not in charge. This means that the roads and services in the estate have not been taken over by the county council. You solicitor will then check as to whether there is a management company in place to look after these areas. If there is, then the solicitor will need to request extra documentation from the vendors solicitor such as management accounts, company documents, insurance etc. It is imperative that these are reviewed. A purchaser does not want to buy a property in an estate or apartment block and then later be faced with an unexpected bill from a management company for fixing broken lifts, lights, potholes in the road, claims from someone who fell in the carpark or legal fees that the management company have to pay to chase owners who are not paying. Conversely, the vendor will not be able to sell their property if there are issues.
- There are tenants in the house. Sometimes purchasers are happy to buy with the benefit of sitting tenants. In such a case, a purchaser’s solicitor will need to review the existing tenancy agreement (if any) or put in place a new one. If the purchaser does not want the tenants, then this should be agreed with the auctioneer at the outset and the house should be vacant on closing. If the solicitor needs to review and write up tenancy agreements, then this would be separate to the conveyancing process and they could charge extra.
- Vendor/Purchaser lives abroad – This can be dealt with by appointing someone to act on your behalf through a Power of Attorney document.
- Property is unregistered – In Ireland, there are two types of title – registered and unregistered. The majority of property is registered. Occasionally, a purchaser’s solicitor will receive contracts which indicate that the property is unregistered. Whilst this is a not a problem per se, the Government have imposed a mandatory obligation on persons buying unregistered title that they must convert the title. This will be done by the Purchaser’s Solicitor, however it can cost extra and purchasers should be aware.
As detailed above for the most part conveyances go through without major incident. There will always be some queries on the documentation but for the most part those queries can be dealt with. Occasionally, as outlined above, further action will have to be taken by the solicitor to rectify a situation but this will be notified to purchasers/solicitors as soon as it becomes apparent. For the most part the fee quoted stands, the only time it would be increased is if an extra matter had to be put in place to facilitate the conveyance such as drafting a Power of Attorney, Drafting Rights of Way, converting title, drafting co. ownership agreements.
The good news is that it is extremely rare that difficulties cannot be sorted to the satisfaction of all parties and whilst it can be frustrating going through the process at the time, it is generally worth it in the end when you are handed the keys of your new home.
This document is issued for guidance purposes and is copyrighted to Martina Murphy Solicitors.