Good afternoon everyone - hope you are all ready for the weekend. I decided that you needed some good edifying reading during your leisure time so set out below information relating to a poorly covered area of law by many firms of solicitors and property lawyers and that is in regard to property that is or will be jointly owned whether it be a House flat apartment or maisonette.
The legal term used for the way of jointly owning property includes the word “tenant” which simply means owner.
When two or more people (limited to a maximum of four) buy property together in England or Wales, they have to decide how they are going to "hold" the property. There are two ways in which property can be held where it is intended that the buyers alone are to have the benefit of the property and the right to share in the proceeds of sale when, it comes to be sold. If it is intended that some third party will also share in the property then a special document will need to be prepared in addition to any deed entered into between the buyers.
It is possible to change the way in which property is held, at some time in the future however; you will avoid the need for further expense if the choice, which you make at the outset, is the right one. It is appreciated that changes in circumstances might dictate the need to change this at some time in the future, in which case consult a specialist property lawyer.
The main difference between Joint Tenants and Tenants in Common is that Tenants in Common may leave their respective shares in the property by will to someone other than their co-owner(s) when they die; in the absence of a will the share will pass to a member of the deceased tenants family in accordance with the rules of intestacy, in this case it is particularly important that you make a will at the earliest opportunity following your purchase of the property
JOINT TENANTS OR TENANTS IN COMMON ?
TENANTS IN COMMON: All parties will still have legal interests in the property and all parties will need to sign the sale documents before the property can be sold. However, instead of you all owning the whole of the property, the value of the property will be divided between you. You may agree to have the property in equal shares, even if one of you is paying more than the other(s) towards the running or purchase of the property. Alternatively, if you are not making equal contributions to the property, you can decide to own the property in unequal shares so that if it is sold the sale money will be divided in the shares you agree now. On the death of any of you and the property is sold, the proceeds will be shared in the agreed proportions between the remaining owner(s) and the estate of the deceased party.
If you choose to hold property as Tenants in Common you may do so either in equal or unequal shares. So for example, where one person has paid 75% of the purchase price and the other just 25%, they may agree that their respective shareholding in the property will reflect that imbalance. If you are considering holding the property in this way, be sure to take into account the value of the mortgage repayments and other outgoings in respect of the property; if it is intended that these will be paid equally, you might consider that it will be fairer for these to be taken into account when assessing the entitlement to the share in any profit which may be made, or loss incurred, when the property comes to be sold. You are advised that the Courts may have the power to override any arrangement where it appears to them that it does not fairly reflect the amount contributed by either party.
Tenants in Common is often seen as being the right choice for people who are embarking upon a new relationship together or where either party wants to ensure that children from a previous relationship should inherit their share in the property.
Subsequent changes in your circumstances which make it desirable to change Tenants in Common into Joint Tenants (where all Tenants agree) can be dealt with by a specialist property lawyer.
JOINT TENANTS: All parties will hold together the whole of the property as one legal person and are each entitled to an equal, undivided right in the property and its proceeds of sale and any liabilities arising out of its ownership. If the property is sold the transfer deed will have to be signed by all of you in order to be valid. The money arising from the sale of the property will be paid to all of you as one sum, or as you may request. If one of you dies, the remaining owner(s) automatically becomes the owner(s) of the property entitled to deal with it as they please and if sold, will receive all of the sale money.
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This is the most common way in which property is held, particularly by married couples and those who are in a long-standing stable relationship and where both/all parties are to contribute, whether financially or otherwise, to the cost and expense either of buying the property or of maintaining and repairing it and/or paying a contribution towards the mortgage repayments.
Property held in this way can only be sold by consent of all the joint tenants. If there is a change in circumstances which results in one joint tenant wishing to sell and the other(s) refuse(s) to do so, it will be necessary, at that stage, to “sever” the joint tenancy in order to convert to a tenancy in common. Whereby the person wishing to sell can, ultimately compel his/her co-owner(s) to join in the sale. If these circumstances ever arise, it is important to contact a specialist property lawyer at the earliest opportunity.
GENERALLY: It is usual for Married couples to hold as Joint Tenants. They may wish to consider owning the property as Tenants in Common where they are wealthy and undertaking a series of tax planning measures. There are occasions when it is prudent for only one of a married couple to own a property either for tax planning or, where one spouse may face unlimited personal liability for example is a partner in a business or has given personal guarantees for the liabilities of a Limited Company. It may also be advisable to do this where one party buys a property out of assets owned prior to marriage or commencement of the current relationship.
Where the parties are not married they usually hold as Tenants in Common – either equally or in the shares that they agree (which normally relates to their contribution to the property price). If you hold as Tenants in Common it is important that you have a separate trust deed specifying the respective financial responsibilities and shares in the property. A specialist property lawyer can advise you regarding this deed. If any party were to die while a Tenant in Common their share in the property will form part of their estate – it will not pass automatically to their co-owner(s). Therefore, if you hold as Tenants in Common you must now consider making a will, or review your existing will where again a specialist lawyer can help you.
PLEASE NOTE: The decision you make need not be final in that you can change your mind after completion of a purchase if circumstances change. Changes in circumstances prior to completion of a purchase may interfere with the strict timescales laid down for the preparation of the purchase documents and may also affect your mortgage offer (if any). It may also result in your breaching the obligations to complete on the completion day. This will result in heavy penalties and therefore if you have any concerns you are advised discuss this with a specialist property lawyer before exchange of Contracts.
Where it is intended that four or more persons are to have a share in the property please consult a specialist property lawyer as soon as possible to enable the appropriate deed to be prepared to meet those particular circumstances.
I am sorry that this is such a long post however the subject is very important so if you have any concerns please contact me.
Hope you have a great weekend . See you next week
Reg
Wednesday 2 July 2008
UK Property Conveyancing Guide to Moving
Good Afternoon readers today I am going to give you a simple guide to organise a move and a checklist to follow during the progress of the transaction
“l will never do this again!” So many people say this at some stage when they are buying and selling a house in the UK that I have prepared this guide to assist you. I suggest you avoid discussing any completion dates until such time as exchange of contracts is imminent.
THE SALE
1. Contact your property lawyer soon as you are proposing to put your property on the market with an estate agent or when a buyer has been found, or you are optimistic that an offer will shortly be made, so that:-
(a) They can review the proposed agreement with your Estate Agent to ensure that you fully understand its legal implications and to negotiate any changes on your behalf. Please note that not all lawyers will do this within their estimated price
(b)They can organise the home information pack which is now required on all property that is marketed in the UK. This is usually an additional cost over and above the fees for the sale of the property
(c) They can apply for documents from your lender, to ensure that there is no delay in issuing a contract once negotiations have been finalised
(d) They can give you a breakdown of the costs involved including their fees for carrying out the work on your behalf
(e) You can complete a Sale Questionnaire and Fixtures and Fittings List to enable your specialist property lawyer to issue the draft contract promptly
2. A draft contract will be issued to the buyers lawyers, together with all the necessary supporting documents. When the contract has been approved your lawyers will ask you to sign this in readiness for exchange of contracts.
3. When the buyers have received their searches and mortgage offer and their lawyer is satisfied as to the title, your lawyers will negotiate a completion date which will not normally be less than 10 working days from exchange, and the deposit. Contracts can then be exchanged.
4. On the day of completion, you must clear and vacate the property by 12 noon, leaving the keys with the Estate Agents. Your specialist property lawyers will redeem your existing mortgage and discharge the Estate Agents account.
THE PURCHASE
1. When you have agreed to purchase a property, the Estate Agent may require you to pay a deposit. If this happens, an allowance will be made for this at completion. Please let your lawyers know if you have paid such a deposit.
2. When you let your property lawyer know you have found the home of your dreams, they will ask you to complete a Purchase Questionnaire, the answers to which will assist them in their enquiries. They will also ask you for money on account, so that the preliminary searches can be carried out.
3. When your specialist property lawyer receives the draft contract from the sellers lawyer, they will:-
(a) Approve the contract and title. They may feel it necessary to raise additional enquiries of the sellers’ lawyer. When your lawyers are satisfied that all is in order, they will return one copy of the contract to the sellers’ lawyers, for signature in readiness for exchange of contracts
(b) On receipt of your mortgage offer, (if applicable), your lawyers will apply for the required searches , together any other searches that they consider appropriate
4. If you require a mortgage, the offer has to be received from the Lender before exchange of contracts.
5. If you are arranging any new endowment or life policies, acceptance of risk must be received from the insurance company before exchange of contracts. You may also need to have available Buildings Insurance. Youe specialist property lawyer may be able to arrange a quote if required.
6. When your property lawyers have received the various searches and offer of mortgage and have satisfied ourselves as to the title, they will report to you and ask you to sign the contract purchase transfer and mortgage deed. They will also ask you for the deposit to be used on exchange of contracts. If you have a related sale, they will usually be able to arrange that the deposit received from your buyers is used for your purchase and passed up the chain.
THE EXCHANGE
1. At this stage, your specialist property lawyer is ready to arrange an exchange of contracts once a completion date has been agreed. It is at this stage, that stress levels rise! However, an expert property lawyer can take the strain. The majority of people buying and selling are involved in A CHAIN! This means that there is a linked series of transactions and EVERYBODY wants to sell and buy on the same day so that they do not have to pay for bridging finance or rented accommodation. Your property lawyer therefore will have to wait until all parties in the chain have:-
(a) A mortgage
(b) The required searches
(c) Title approved
(d) Agreed a completion date (which is not normally less than ten working days from exchange)
(e) Calculated the draft statement of account detailing any sums due.
Your specialist property lawyer will liaise with the Estate Agents, and other lawyers until the exchange has been achieved.
2. When exchange has taken place, the completion date is legally binding and you can now swing into action and organise your move. The following are just a few reminders of the things you must deal with:-
(a) Arrange contents and buildings insurance (your lawyers may be able to provide a quote for this)
(b) Contact Gas, Electricity, Water and Telephone Services, Arrange for meters to be read and accounts to be transferred
(c) Book the removal van.
(d) Cancel Bankers Order for Mortgage payments, after exchange of contracts
(e) Notify Local Authority of move and arrange apportioned account for council tax
(f) Notify: all insurance companies,premium bonds office ,employer, Accountant ,dentist and doctor ,schools ,church ,clubs ,banks ,building societies ,DVLC and Tax Office, relatives and friends
(g) Arrange for friends to look after the children and pets on moving day!
(h) Arrange for mail to be re-directed.
(i) Arrange any for endowment or Life insurance policies to be activated
THE COMPLETION
1. Your specialist property lawyer will let you have a statement showing all the costs and disbursements due and will draw this up as soon as possible so that you can arrange to let them have the balance four days before completion.
2. On completion day, if you have a sale, your property lawyers must wait for the buyers lawyer to send them the sale money by telegraphic transfer before they can send out the money by the same method on your purchase. This means that it is unlikely that you will get the keys to your new house before lunch time on the day of completion. I suggest that you do not leave your old house, before you have checked with your lawyers that it is in order for you to do so. If you just have a purchase, your lawyers can usually send the money quite early on the morning of completion, but you are unlikely to get the keys before midday as you must allow the seller time to vacate the property.
FINALLY
I hope this guide will be of some assistance and remove some of the uncertainty associated with moving house. However, if at any time you do have a problem or are unhappy with your service, then do complain as this is the only way that standards will improve.
If you are happy with the service you received, please tell all your friends and colleagues and write to your lawyer saying so! Everyone likes to be congratulated
In my next post I am proposing to talk about how to choose your estate agent particularly some of the things to watch out for as regards poor practice
thank you for reading
Reg
© Kingfishers, Licensed Conveyancers, Maidenhead, Berkshire
“l will never do this again!” So many people say this at some stage when they are buying and selling a house in the UK that I have prepared this guide to assist you. I suggest you avoid discussing any completion dates until such time as exchange of contracts is imminent.
THE SALE
1. Contact your property lawyer soon as you are proposing to put your property on the market with an estate agent or when a buyer has been found, or you are optimistic that an offer will shortly be made, so that:-
(a) They can review the proposed agreement with your Estate Agent to ensure that you fully understand its legal implications and to negotiate any changes on your behalf. Please note that not all lawyers will do this within their estimated price
(b)They can organise the home information pack which is now required on all property that is marketed in the UK. This is usually an additional cost over and above the fees for the sale of the property
(c) They can apply for documents from your lender, to ensure that there is no delay in issuing a contract once negotiations have been finalised
(d) They can give you a breakdown of the costs involved including their fees for carrying out the work on your behalf
(e) You can complete a Sale Questionnaire and Fixtures and Fittings List to enable your specialist property lawyer to issue the draft contract promptly
2. A draft contract will be issued to the buyers lawyers, together with all the necessary supporting documents. When the contract has been approved your lawyers will ask you to sign this in readiness for exchange of contracts.
3. When the buyers have received their searches and mortgage offer and their lawyer is satisfied as to the title, your lawyers will negotiate a completion date which will not normally be less than 10 working days from exchange, and the deposit. Contracts can then be exchanged.
4. On the day of completion, you must clear and vacate the property by 12 noon, leaving the keys with the Estate Agents. Your specialist property lawyers will redeem your existing mortgage and discharge the Estate Agents account.
THE PURCHASE
1. When you have agreed to purchase a property, the Estate Agent may require you to pay a deposit. If this happens, an allowance will be made for this at completion. Please let your lawyers know if you have paid such a deposit.
2. When you let your property lawyer know you have found the home of your dreams, they will ask you to complete a Purchase Questionnaire, the answers to which will assist them in their enquiries. They will also ask you for money on account, so that the preliminary searches can be carried out.
3. When your specialist property lawyer receives the draft contract from the sellers lawyer, they will:-
(a) Approve the contract and title. They may feel it necessary to raise additional enquiries of the sellers’ lawyer. When your lawyers are satisfied that all is in order, they will return one copy of the contract to the sellers’ lawyers, for signature in readiness for exchange of contracts
(b) On receipt of your mortgage offer, (if applicable), your lawyers will apply for the required searches , together any other searches that they consider appropriate
4. If you require a mortgage, the offer has to be received from the Lender before exchange of contracts.
5. If you are arranging any new endowment or life policies, acceptance of risk must be received from the insurance company before exchange of contracts. You may also need to have available Buildings Insurance. Youe specialist property lawyer may be able to arrange a quote if required.
6. When your property lawyers have received the various searches and offer of mortgage and have satisfied ourselves as to the title, they will report to you and ask you to sign the contract purchase transfer and mortgage deed. They will also ask you for the deposit to be used on exchange of contracts. If you have a related sale, they will usually be able to arrange that the deposit received from your buyers is used for your purchase and passed up the chain.
THE EXCHANGE
1. At this stage, your specialist property lawyer is ready to arrange an exchange of contracts once a completion date has been agreed. It is at this stage, that stress levels rise! However, an expert property lawyer can take the strain. The majority of people buying and selling are involved in A CHAIN! This means that there is a linked series of transactions and EVERYBODY wants to sell and buy on the same day so that they do not have to pay for bridging finance or rented accommodation. Your property lawyer therefore will have to wait until all parties in the chain have:-
(a) A mortgage
(b) The required searches
(c) Title approved
(d) Agreed a completion date (which is not normally less than ten working days from exchange)
(e) Calculated the draft statement of account detailing any sums due.
Your specialist property lawyer will liaise with the Estate Agents, and other lawyers until the exchange has been achieved.
2. When exchange has taken place, the completion date is legally binding and you can now swing into action and organise your move. The following are just a few reminders of the things you must deal with:-
(a) Arrange contents and buildings insurance (your lawyers may be able to provide a quote for this)
(b) Contact Gas, Electricity, Water and Telephone Services, Arrange for meters to be read and accounts to be transferred
(c) Book the removal van.
(d) Cancel Bankers Order for Mortgage payments, after exchange of contracts
(e) Notify Local Authority of move and arrange apportioned account for council tax
(f) Notify: all insurance companies,premium bonds office ,employer, Accountant ,dentist and doctor ,schools ,church ,clubs ,banks ,building societies ,DVLC and Tax Office, relatives and friends
(g) Arrange for friends to look after the children and pets on moving day!
(h) Arrange for mail to be re-directed.
(i) Arrange any for endowment or Life insurance policies to be activated
THE COMPLETION
1. Your specialist property lawyer will let you have a statement showing all the costs and disbursements due and will draw this up as soon as possible so that you can arrange to let them have the balance four days before completion.
2. On completion day, if you have a sale, your property lawyers must wait for the buyers lawyer to send them the sale money by telegraphic transfer before they can send out the money by the same method on your purchase. This means that it is unlikely that you will get the keys to your new house before lunch time on the day of completion. I suggest that you do not leave your old house, before you have checked with your lawyers that it is in order for you to do so. If you just have a purchase, your lawyers can usually send the money quite early on the morning of completion, but you are unlikely to get the keys before midday as you must allow the seller time to vacate the property.
FINALLY
I hope this guide will be of some assistance and remove some of the uncertainty associated with moving house. However, if at any time you do have a problem or are unhappy with your service, then do complain as this is the only way that standards will improve.
If you are happy with the service you received, please tell all your friends and colleagues and write to your lawyer saying so! Everyone likes to be congratulated
In my next post I am proposing to talk about how to choose your estate agent particularly some of the things to watch out for as regards poor practice
thank you for reading
Reg
© Kingfishers, Licensed Conveyancers, Maidenhead, Berkshire
UK Property Conveyancing Searches Part 3
Good afternoon readers today I am going to talk about contaminated land and how you can find out whether the property you own or are proposing to purchase is on or near to land that has an adverse environmental footprint. So as with my post yesterday I will set out the perceived issues and how they can be resolved.
The Problem- HOMEBUYERS are often unaware that although the house they purchase may be in good condition the land upon which it is built may not be. This is something the usual searches will not uncover. The local search will not reveal any landfill sites waste disposal dumps or whether the land is at risk from contamination, toxic emissions flooding subsidence or radioactivity. It has been found that there are over 250,000 sites, which have been filled, and that there are over 400,000 industrial sites, which are no longer in existence, which may have contaminated land. Many of these sites may have already been built on to provide housing. Landfill waste disposal and old industrial land are known as “brownfield” sites. The principle caveat emptor “the buyer beware” applies and if you purchase land that is contaminated you may be liable to pay for the clean-up costs of the pollution created by former owners.
Why an environmental report-The government has declared that 60% of all new houses to be built over the next decade must be built on brownfield sites (thousands already have been). Records exist that there are over 25,000 landfill or waste disposal sites and approximately 40,000 contaminating/polluting processes including discharges and storage of hazardous substances. It is estimated that 1% of all land in Britain is contaminated with pollutants. These are serious enough to warrant enquiry by anyone buying a new home particularly as there are increasing health and safety concerns associated with living on or near landfill sites or sources of contamination. If you purchase a property (without checking the environmental issues) that is contaminated it will prove very difficult to sell and you may also find that you will have to pay for the clean up costs of the land.
THE SOLUTION- As a result of increased computerisation it is now possible to obtain details of the present and historical land use for properties in England and Wales. The environmental report provides site-specific data on environmental issues affecting residential property. The report contains information obtained from the Environment Agency Coal Board DETR Ordinance Survey and other data providers. It will provide information on whether the property you are intending to buy has been built on former landfill sites, waste sites or industrial or unstable land. It will also provide a risk assessment as to nearby sites that may release contamination and whether the land is an area affected by Radon gas, flooding landslip coal mining or subsidence. The report covers an area within a 500 metre radius of the property.
We strongly advise you to have an environmental search and if you ignore this advice you do so at your own risk since it is intended to safeguard you and protect your enjoyment and investment in the property you are intending to purchase.
If you choose not to have an environmental report against the advice of a specialist property lawyer then you also accept that the risk of proceeding without such a report is yours and may result in you having difficulty in selling the property in the future and/or or being liable for the clean up costs of the land.
The cost of your peace of mind is nominal compared to the cost of cleanup or having a blighted property and this type of enquiry is now strongly recommended.
In my next post I will cover other relevant conveyancing issues which have caused problems for sellers and buyers of UK Property because they have not received the correct advice at the appropriate time in the buying and selling process.
Reg
The Problem- HOMEBUYERS are often unaware that although the house they purchase may be in good condition the land upon which it is built may not be. This is something the usual searches will not uncover. The local search will not reveal any landfill sites waste disposal dumps or whether the land is at risk from contamination, toxic emissions flooding subsidence or radioactivity. It has been found that there are over 250,000 sites, which have been filled, and that there are over 400,000 industrial sites, which are no longer in existence, which may have contaminated land. Many of these sites may have already been built on to provide housing. Landfill waste disposal and old industrial land are known as “brownfield” sites. The principle caveat emptor “the buyer beware” applies and if you purchase land that is contaminated you may be liable to pay for the clean-up costs of the pollution created by former owners.
Why an environmental report-The government has declared that 60% of all new houses to be built over the next decade must be built on brownfield sites (thousands already have been). Records exist that there are over 25,000 landfill or waste disposal sites and approximately 40,000 contaminating/polluting processes including discharges and storage of hazardous substances. It is estimated that 1% of all land in Britain is contaminated with pollutants. These are serious enough to warrant enquiry by anyone buying a new home particularly as there are increasing health and safety concerns associated with living on or near landfill sites or sources of contamination. If you purchase a property (without checking the environmental issues) that is contaminated it will prove very difficult to sell and you may also find that you will have to pay for the clean up costs of the land.
THE SOLUTION- As a result of increased computerisation it is now possible to obtain details of the present and historical land use for properties in England and Wales. The environmental report provides site-specific data on environmental issues affecting residential property. The report contains information obtained from the Environment Agency Coal Board DETR Ordinance Survey and other data providers. It will provide information on whether the property you are intending to buy has been built on former landfill sites, waste sites or industrial or unstable land. It will also provide a risk assessment as to nearby sites that may release contamination and whether the land is an area affected by Radon gas, flooding landslip coal mining or subsidence. The report covers an area within a 500 metre radius of the property.
We strongly advise you to have an environmental search and if you ignore this advice you do so at your own risk since it is intended to safeguard you and protect your enjoyment and investment in the property you are intending to purchase.
If you choose not to have an environmental report against the advice of a specialist property lawyer then you also accept that the risk of proceeding without such a report is yours and may result in you having difficulty in selling the property in the future and/or or being liable for the clean up costs of the land.
The cost of your peace of mind is nominal compared to the cost of cleanup or having a blighted property and this type of enquiry is now strongly recommended.
In my next post I will cover other relevant conveyancing issues which have caused problems for sellers and buyers of UK Property because they have not received the correct advice at the appropriate time in the buying and selling process.
Reg
UK Property Conveyancing Searches Part 2
Good afternoon, once again. Today I am going to share with you about the drainage and water search and why this is needed to be carried out, particularly as it is included in the home information pack as part of the stipulated documents.
I am dealing with this search by highlighting the problem itself, then raising a question and providing a possible solution.
THE PROBLEM - The majority of property owners are simply unaware that not all sewers, drains and water mains are the responsibility of water companies. Such pipework has a finite design life and numerous problems regarding their repair and maintenance arise each year. Ideally all property owners must be aware of their potential liabilities regarding private sewers and pipework running below the roads and gardens as these can prove to be quite significant. Pipelines running close to a property may even prejudice future development or extensions to the property. If problems do arise and unidentified liabilities are exposed it will result in unexpected high maintenance bills, while ongoing problems can seriously impact on the value of the property.
WHY A DRAINAGE AND WATER REPORT - Waste water law abolished the responsibility of local authorities to keep and maintain maps of the public sewers, as a result the local authority search no longer provides any information covering these aspects. Therefore separate enquiries of the water and sewerage suppliers who keep the water mains and sewer records are required. The significance to owners is that properties connected to a public sewer have their sewage treated by the local water company, whilst unconnected property owners are responsible for the cost of maintaining alternative treatments such as a septic tank or cesspool. Generally properties are connected to the public water supply but if the water supply happens to be private these are subject to strict controls by environmental health.
THE SOLUTION - For a reasonable cost you can have all the essential information about the extent of your potential responsibilities and liabilities. The Drainage and Water Report is a comprehensive search which contains clear information relating to the connections including accurate mapping of mains and sewer locations detailing the distance from the property. It will also provide confirmation of any legal agreements affecting the property potentially limiting future developments or extensions and any billing arrangements. The report is underwritten by the water companies guaranteeing that if any information provided is inaccurate they will cover the cost of remedial works avoiding the risk of liability for you. We strongly advise you to have a Drainage and Water Report and if you ignore this advice you do so at your own risk since it is intended to safeguard you and protect your enjoyment and investment in the property you are proposing to purchase.
I am sure that you can see from the foregoing that if you choose not to have a drainage and water report carried out against the advice of specialist lawyers, then this is a risk that you will have to accept and may result in difficulty in selling the property and that you may be liable for the full costs of drainage repairs and/or renewal of drains.
In my next post, I am proposing to cover the environmental report, using a similar format to this posting.
Please feel free to comment on this blog, particularly if you wish me to answer any specific issues that you are facing.
Reg
I am dealing with this search by highlighting the problem itself, then raising a question and providing a possible solution.
THE PROBLEM - The majority of property owners are simply unaware that not all sewers, drains and water mains are the responsibility of water companies. Such pipework has a finite design life and numerous problems regarding their repair and maintenance arise each year. Ideally all property owners must be aware of their potential liabilities regarding private sewers and pipework running below the roads and gardens as these can prove to be quite significant. Pipelines running close to a property may even prejudice future development or extensions to the property. If problems do arise and unidentified liabilities are exposed it will result in unexpected high maintenance bills, while ongoing problems can seriously impact on the value of the property.
WHY A DRAINAGE AND WATER REPORT - Waste water law abolished the responsibility of local authorities to keep and maintain maps of the public sewers, as a result the local authority search no longer provides any information covering these aspects. Therefore separate enquiries of the water and sewerage suppliers who keep the water mains and sewer records are required. The significance to owners is that properties connected to a public sewer have their sewage treated by the local water company, whilst unconnected property owners are responsible for the cost of maintaining alternative treatments such as a septic tank or cesspool. Generally properties are connected to the public water supply but if the water supply happens to be private these are subject to strict controls by environmental health.
THE SOLUTION - For a reasonable cost you can have all the essential information about the extent of your potential responsibilities and liabilities. The Drainage and Water Report is a comprehensive search which contains clear information relating to the connections including accurate mapping of mains and sewer locations detailing the distance from the property. It will also provide confirmation of any legal agreements affecting the property potentially limiting future developments or extensions and any billing arrangements. The report is underwritten by the water companies guaranteeing that if any information provided is inaccurate they will cover the cost of remedial works avoiding the risk of liability for you. We strongly advise you to have a Drainage and Water Report and if you ignore this advice you do so at your own risk since it is intended to safeguard you and protect your enjoyment and investment in the property you are proposing to purchase.
I am sure that you can see from the foregoing that if you choose not to have a drainage and water report carried out against the advice of specialist lawyers, then this is a risk that you will have to accept and may result in difficulty in selling the property and that you may be liable for the full costs of drainage repairs and/or renewal of drains.
In my next post, I am proposing to cover the environmental report, using a similar format to this posting.
Please feel free to comment on this blog, particularly if you wish me to answer any specific issues that you are facing.
Reg
Friday 20 June 2008
UK Property Conveyancing Search Part 1
Good afternoon everyone.
Well as promised I am now going to post a series covering some of the searches carried out during the process of buying or selling a UK Property and surprise surprise the first one is the Local Search sincet his is required in the Home Information Pack.
This search is either an official one meaning that the information comes direct from the local authority or a personal one which means that the data is not as detailed and generally not acceptable for a buyers lawyers.
So for the purposes of this post I will be talking only about the official search.
While its name appears to give the impression that it covers the locality in which the property is situated it in fact only provides information that is specific to the actual property being sold or purchased.
The Local Search does not give details of any planning matters likely to affect the property which relate to the neighbouring properties or are within the immediate vicinity.If you wish to satisfy yourself entirely regarding any of these mattersyou will have to contact the appropriate Local Authority and inspect their planning register. It is regrettable that the Local Search does not generally give details of any matters affecting adjoining properties-For example any application to extend the property -so if you have any specific query this can only be dealt with by way of a specific search undertaken on that property itself or, in turn, by enquiry of the Local Authority.
The example of items that may be revealed by a local search are set out below however this list is not exhaustive and invariably there is nothing untoward revealed .
(a) Whether or not the Road in which the proerty is situated is adopted by the Local Authority and if there any liability for road charges
(b) Whether the path at the rear/side of the property is adopted by the Local Authority or is maintainable by all who regularly use it.
(c) If there is a smoke control order in force for the area, which means you, must only burn smokeless fuel and comply with the relevant by-laws
(d) Is there any Tree Preservation Order in force for the area, and if so you must check with the Local Authority before any trees are lopped or felled in case planning permission is required.
(e) Is a Home Improvement Grant registered against the property, which will continue to be a charge on the property and will it need to be repaid whether or not the house continues to be used as a residential dwelling.
(f) Is the property within a conservation area or an area of special control . This is an area which has been defined as being of special architectural or historic interest the appearance of which the local authority wish to maintain. All planning applications for building within the area will be carefully considered to ensure that they harmonise and reinforce the character of the area. The demolition or partial demolition of a building within a conservation area requires special consent. If you plan to undertake any alterations to the property either now or in the future then you will be well advised to contact the Local Authority now to ensure that your proposals are likely to fall within the permitted level of development.
You can see that the level of information being obtained is quite detailed and as is always the case if you are concerned you must contact a specialist property lawyer who is trained to interpret the data and advise on its impact to you.
I hope you have found this of interest and I will cover next the position in respect of Drainage searches particularly as this is one of the required documents for the Home Information Pack
Reg
Well as promised I am now going to post a series covering some of the searches carried out during the process of buying or selling a UK Property and surprise surprise the first one is the Local Search sincet his is required in the Home Information Pack.
This search is either an official one meaning that the information comes direct from the local authority or a personal one which means that the data is not as detailed and generally not acceptable for a buyers lawyers.
So for the purposes of this post I will be talking only about the official search.
While its name appears to give the impression that it covers the locality in which the property is situated it in fact only provides information that is specific to the actual property being sold or purchased.
The Local Search does not give details of any planning matters likely to affect the property which relate to the neighbouring properties or are within the immediate vicinity.If you wish to satisfy yourself entirely regarding any of these mattersyou will have to contact the appropriate Local Authority and inspect their planning register. It is regrettable that the Local Search does not generally give details of any matters affecting adjoining properties-For example any application to extend the property -so if you have any specific query this can only be dealt with by way of a specific search undertaken on that property itself or, in turn, by enquiry of the Local Authority.
The example of items that may be revealed by a local search are set out below however this list is not exhaustive and invariably there is nothing untoward revealed .
(a) Whether or not the Road in which the proerty is situated is adopted by the Local Authority and if there any liability for road charges
(b) Whether the path at the rear/side of the property is adopted by the Local Authority or is maintainable by all who regularly use it.
(c) If there is a smoke control order in force for the area, which means you, must only burn smokeless fuel and comply with the relevant by-laws
(d) Is there any Tree Preservation Order in force for the area, and if so you must check with the Local Authority before any trees are lopped or felled in case planning permission is required.
(e) Is a Home Improvement Grant registered against the property, which will continue to be a charge on the property and will it need to be repaid whether or not the house continues to be used as a residential dwelling.
(f) Is the property within a conservation area or an area of special control . This is an area which has been defined as being of special architectural or historic interest the appearance of which the local authority wish to maintain. All planning applications for building within the area will be carefully considered to ensure that they harmonise and reinforce the character of the area. The demolition or partial demolition of a building within a conservation area requires special consent. If you plan to undertake any alterations to the property either now or in the future then you will be well advised to contact the Local Authority now to ensure that your proposals are likely to fall within the permitted level of development.
You can see that the level of information being obtained is quite detailed and as is always the case if you are concerned you must contact a specialist property lawyer who is trained to interpret the data and advise on its impact to you.
I hope you have found this of interest and I will cover next the position in respect of Drainage searches particularly as this is one of the required documents for the Home Information Pack
Reg
Friday 13 June 2008
Repossessions and the UK Property Market
Well today this is a hot topic for conversations amongst lawyers as well as the property owners and the would be investor.
Why is there so much concern about the market and what is it that drives lenders to want to evict their customers from a home? In a word Greed.
Clearly there are winners and losers in this type of market. Invariably the lenders and investors will make gains while the homeowner will find not only that they are homeless but with a large debt still owing even after the property has been sold usually to an investor.
For the invester clearly now is a good time to enter the market as there are many very reasonably priced properties on the market and there are still mortgage deals to be obtained if you know where to look.
So what about the home Owner ? Even if you are in negative equity-where the property is worth less than the mortgage owed on it- it may still be sensible to stay continuing to pay the mortgage as if you give up you will still have rent to pay as well as retaining the balance of any mortgage debt. It is important that the property is not looked at as being an investment but rather it must be considered as a roof over your head and a home.
If you can no longer afford to stay in the property there are a number of organisations that are prepared to purchase-usually at a heavy discount-and allow you to remain in the property but paying a commercial rent. You will be wise to avoid entering into this type of arrangement without first discussing the various dangers and pitfalls with a specialist property lawyer as the conveyancing is complicated.
It is my view that the preferred option is to speak to your lender and renegotiate the terms of your mortgage so that sufficient time can pass to enable the UK Property market to recover.
I hope that you have found my comments helpful and in future posts I will be commenting on the various aspects of the conveyancing process.
Reg
Why is there so much concern about the market and what is it that drives lenders to want to evict their customers from a home? In a word Greed.
Clearly there are winners and losers in this type of market. Invariably the lenders and investors will make gains while the homeowner will find not only that they are homeless but with a large debt still owing even after the property has been sold usually to an investor.
For the invester clearly now is a good time to enter the market as there are many very reasonably priced properties on the market and there are still mortgage deals to be obtained if you know where to look.
So what about the home Owner ? Even if you are in negative equity-where the property is worth less than the mortgage owed on it- it may still be sensible to stay continuing to pay the mortgage as if you give up you will still have rent to pay as well as retaining the balance of any mortgage debt. It is important that the property is not looked at as being an investment but rather it must be considered as a roof over your head and a home.
If you can no longer afford to stay in the property there are a number of organisations that are prepared to purchase-usually at a heavy discount-and allow you to remain in the property but paying a commercial rent. You will be wise to avoid entering into this type of arrangement without first discussing the various dangers and pitfalls with a specialist property lawyer as the conveyancing is complicated.
It is my view that the preferred option is to speak to your lender and renegotiate the terms of your mortgage so that sufficient time can pass to enable the UK Property market to recover.
I hope that you have found my comments helpful and in future posts I will be commenting on the various aspects of the conveyancing process.
Reg
Thursday 12 June 2008
Remotgaging Refinancing and Equity Loans
Good Afternoon everyone. I thought today in view of the UK Property Market that I say something about remortgaging or refinancing your property.
There are a number of reasons why you may wish to raise capital on your property or merely refinance the existing mortgage. I set out below a few examples however the list is not exhaustive and I am sure you will be able to think of many other ones.
(a) The present fixed rate term of your mortgage is due to expire
(b) You are selling or buying another property
(c) You have run up debt and wish to consolidate all your borrowing under one payment
(d) You wish to raise additional capital from your property perhaps to fund a new business venture or to have a holiday
(e) You are nearing retirement and need to raise additional money by way of an Equity release scheme
(f) You are acquiring an interest in a property held by your spouse or partner
Whatever your reason for refinancing your mortgage be it capital raising or conveyancing you must be careful to ensure that you receive the correct advice ensuring that your mortgage advisor is correctly registered with the Financial Services Authority and that the conveyancing relating to your proposed mortgage is carried out by a suitably qualified lawyer which will not necessarilly be a Solicitor as specialist property lawyers can also perform this work.
In the present climate it has become more difficult to obtain mortgages so a Broker who has the ability to research the whole of the refinancing and mortgage market may be a wise investment. If your mortgage is coming to an end do not leave it to the last minute as the conveyancing can take up to two months to be finalised although we as a firm guarantee to complete any remortgage or refinance within the month of the mortgage offer if our instructions from you and the lender are received no later than the 15th of the month.
Please Note that if you do not keep up repayments on your mortgage your home may be at risk.
I hope this has been of help and in my next posting I will talk about property repossesions and the reasonswhy this is happenning.
Reg
There are a number of reasons why you may wish to raise capital on your property or merely refinance the existing mortgage. I set out below a few examples however the list is not exhaustive and I am sure you will be able to think of many other ones.
(a) The present fixed rate term of your mortgage is due to expire
(b) You are selling or buying another property
(c) You have run up debt and wish to consolidate all your borrowing under one payment
(d) You wish to raise additional capital from your property perhaps to fund a new business venture or to have a holiday
(e) You are nearing retirement and need to raise additional money by way of an Equity release scheme
(f) You are acquiring an interest in a property held by your spouse or partner
Whatever your reason for refinancing your mortgage be it capital raising or conveyancing you must be careful to ensure that you receive the correct advice ensuring that your mortgage advisor is correctly registered with the Financial Services Authority and that the conveyancing relating to your proposed mortgage is carried out by a suitably qualified lawyer which will not necessarilly be a Solicitor as specialist property lawyers can also perform this work.
In the present climate it has become more difficult to obtain mortgages so a Broker who has the ability to research the whole of the refinancing and mortgage market may be a wise investment. If your mortgage is coming to an end do not leave it to the last minute as the conveyancing can take up to two months to be finalised although we as a firm guarantee to complete any remortgage or refinance within the month of the mortgage offer if our instructions from you and the lender are received no later than the 15th of the month.
Please Note that if you do not keep up repayments on your mortgage your home may be at risk.
I hope this has been of help and in my next posting I will talk about property repossesions and the reasonswhy this is happenning.
Reg
Friday 30 May 2008
Why Do I Have To Produce Identification Documents?
This is to do with both this Government's and Europe's response to the threat of terror from extremists and the requirements are covered in legislation for proceeds of crime and money laundering.
In brief, criminals use various ways to convert cash received from criminal activities (for example sale of drugs or robberies) to money that has no trace of criminality, for example it being invested in property.
It is because of this activity that, in particular, property lawyers enquire as to proof of identification and address. In addition, many lawyers now also carry out electronic checking to ensure that the information is correct, having regard to the fact that identity theft is now becoming common.
If a client is unable to provide any proof of address or identification then it is highly unlikely that a lawyer will agree to represent you in respect of the property transaction.
The type of identification typically required is a valid passport and driving licence and, for address, two utility bills or a council tax demand. The documents mentioned here are not an exhaustive list but are provided in order for you to be aware of the amount of information an expert property lawyer will require before agreeing to act for you for a sale or purchase of UK property.
I am sure there are as many questions unanswered here as I have answered so feel free to visit my website at any time.
Reg
In brief, criminals use various ways to convert cash received from criminal activities (for example sale of drugs or robberies) to money that has no trace of criminality, for example it being invested in property.
It is because of this activity that, in particular, property lawyers enquire as to proof of identification and address. In addition, many lawyers now also carry out electronic checking to ensure that the information is correct, having regard to the fact that identity theft is now becoming common.
If a client is unable to provide any proof of address or identification then it is highly unlikely that a lawyer will agree to represent you in respect of the property transaction.
The type of identification typically required is a valid passport and driving licence and, for address, two utility bills or a council tax demand. The documents mentioned here are not an exhaustive list but are provided in order for you to be aware of the amount of information an expert property lawyer will require before agreeing to act for you for a sale or purchase of UK property.
I am sure there are as many questions unanswered here as I have answered so feel free to visit my website at any time.
Reg
Tuesday 27 May 2008
Where Are The First Time Buyers? Part 2
Well over the weekend yet more negative news from the media regarding the UK Property Market and in particular the London Property Market where it is stated as factual that prices are still dropping. While it may be true overall it is not true when looking in some areas of London where prices are stable.
So how does this affect the First Time Buyer?
You will have read from my earlier blogs that I do not believe that buyers when looking to purchase a property must first of all be concerned as to price. In my view the property is first and foremost somewhere to live and only secondly as part of a long term strategy an investment since everybody knows that property values go down as well as up.
On this basis it is still wise to purchase a property since mortgage payments at the present time are still lower than most people will pay in rent.
So on the assumption that you are proposing to buy a property it is important that you also understand that the process can take on average eight to twelve weeks to be finalised and in the case of leasehold property even longer.
After you have negotiated the purchase price your lawyers start working on raising questions about the property from your sellers through their lawyers and other agencies including the local authority. In addition they will deal with the contract checking progress on your mortgage and preparing the purchase documents including a transfer. It is only when all the information has been obtained that matters can progress to exchange of contracts.
On exchange the completion date is agreed which is usually ten working days from exchange to allow sufficient time to deal with last minute searches and questions which may arise on the mortgage.
On the completion day access is usually available from midday and in the event that either you or your seller fails to complete for whatever reason compensation will be payable by the defaulting party.
In my next blog I will attempt to give a brief overview of why Identification and proof of address is now needed on all property transactions in the UK
So how does this affect the First Time Buyer?
You will have read from my earlier blogs that I do not believe that buyers when looking to purchase a property must first of all be concerned as to price. In my view the property is first and foremost somewhere to live and only secondly as part of a long term strategy an investment since everybody knows that property values go down as well as up.
On this basis it is still wise to purchase a property since mortgage payments at the present time are still lower than most people will pay in rent.
So on the assumption that you are proposing to buy a property it is important that you also understand that the process can take on average eight to twelve weeks to be finalised and in the case of leasehold property even longer.
After you have negotiated the purchase price your lawyers start working on raising questions about the property from your sellers through their lawyers and other agencies including the local authority. In addition they will deal with the contract checking progress on your mortgage and preparing the purchase documents including a transfer. It is only when all the information has been obtained that matters can progress to exchange of contracts.
On exchange the completion date is agreed which is usually ten working days from exchange to allow sufficient time to deal with last minute searches and questions which may arise on the mortgage.
On the completion day access is usually available from midday and in the event that either you or your seller fails to complete for whatever reason compensation will be payable by the defaulting party.
In my next blog I will attempt to give a brief overview of why Identification and proof of address is now needed on all property transactions in the UK
Thursday 22 May 2008
Where are the first time buyers ?
Yesterday I promised to post information and advice for the first time buyer in the UK Property Market
Well today has almost finished and here I am writing when everyone else is thinking of going home
It appears to me that generally the first time buyer is the most uninformed of all people involved in the property market and therefore the most likely to be open to all kinds of pressures from so called property experts who have little or no experience in the marketplace . The result of this is that they are prone to all the stress that this type of transaction can bring.
Typically the first time buyer is purchasing leasehold property that is full of pitfalls for the unwary . It is also one of the most complicated forms of property purchase because invariably not all of the documentation is in one place and rarely will it be contained in the HIP (Home Information Pack) that is provided by the seller of the property. It is my experience that a higher than average proportion of these type of transactions fall through either because of lack of information or defective leases.
So having said all this what is the best time for the buyer to instruct a property lawyer?
It is usually best to discuss the proposed transaction with a lawyer before becoming involved in any negotiations for the purchase as advice can then be given as to cost ,projected timescales and most importantly of all assistance with the negotiations. The earlier you instruct the easier you will find the process as only your lawyer has your best interests at heart.
In the present property market there is a degree of uncertainty both as regards whether the property values will continue to fall and also whether the first time buyer can borrow sufficient to proceed with the purchase. It is my belief that now is a good time to buy as what you pay in rent can be used instead on a mortgage however because property values can fall as well as increase the purchase has to be viewed long term and on the basis that it is a home for you to live in . Lenders have varying criteria but certainly at the moment first time buyers must have a minimum of a 10% deposit in order to be able to proceed.
Tomorrow I will answer a few questions as to how long will it take and what happens if you do not complete on the purchase
Reg
Well today has almost finished and here I am writing when everyone else is thinking of going home
It appears to me that generally the first time buyer is the most uninformed of all people involved in the property market and therefore the most likely to be open to all kinds of pressures from so called property experts who have little or no experience in the marketplace . The result of this is that they are prone to all the stress that this type of transaction can bring.
Typically the first time buyer is purchasing leasehold property that is full of pitfalls for the unwary . It is also one of the most complicated forms of property purchase because invariably not all of the documentation is in one place and rarely will it be contained in the HIP (Home Information Pack) that is provided by the seller of the property. It is my experience that a higher than average proportion of these type of transactions fall through either because of lack of information or defective leases.
So having said all this what is the best time for the buyer to instruct a property lawyer?
It is usually best to discuss the proposed transaction with a lawyer before becoming involved in any negotiations for the purchase as advice can then be given as to cost ,projected timescales and most importantly of all assistance with the negotiations. The earlier you instruct the easier you will find the process as only your lawyer has your best interests at heart.
In the present property market there is a degree of uncertainty both as regards whether the property values will continue to fall and also whether the first time buyer can borrow sufficient to proceed with the purchase. It is my belief that now is a good time to buy as what you pay in rent can be used instead on a mortgage however because property values can fall as well as increase the purchase has to be viewed long term and on the basis that it is a home for you to live in . Lenders have varying criteria but certainly at the moment first time buyers must have a minimum of a 10% deposit in order to be able to proceed.
Tomorrow I will answer a few questions as to how long will it take and what happens if you do not complete on the purchase
Reg
Information For First Time And Other Buyers
Well as promised I am going to speak to the first time buyer today and attempt to answer what I am sure are the many questions they have before venturing into the scary world of the UK Property market.
Generally the first time buyer is unsure whether to find the property they wish to buy or to discuss their proposed purchase with a lawyer first.
I believe it's always worthwhile discussing with and instructing a Lawyer before you enter into the property market as they are able to advise on a number of issues including how to negotiate and obtain the best price in the current property market
One of the things which prevent this is the wrong assumption that instructing a Lawyer can be expensive. This is untrue since many Lawyers have schemes in place which can limit your exposure to such expense.
The other concern is how much can you borrow. This is a question properly addressed to a lender however we have a mortgage broker who can give advise on this if we were instructed. It has to be acknowledged that lenders have differrent criteria and lending multiples so it can only be carried out on a case by case basis.
In the current property market a buyer will need a minimum of ten percent deposit available for exchange of contracts which is usually six to eight weeks from offering on the property.
During the period from offer to exchange the lawyer will be raising questions and searches relevant to the property checking the contract together with the mortgage and in respect of the best law firms preparing the purchase documents for signature. Once all these matters have been finalised a written report is given and the buyer is invited to sign.
The transaction is then ready to exchange when a completion date is agreed usually ten working days from exchange as this is the minimum period to safely be sure that mortgage monies can be released and any further questions arising from post exchange searches can be answered.
It is normal on the day of completion to aim for entry into the property at midday and if the matter fails to complete then compensation is paid by the defaulting party.
I have previously said that now is a good time to be investing in property as it is generally cheaper paying a mortgage than rent and is a good long term investment.
If there are any questions please feel free to post here
Reg
Generally the first time buyer is unsure whether to find the property they wish to buy or to discuss their proposed purchase with a lawyer first.
I believe it's always worthwhile discussing with and instructing a Lawyer before you enter into the property market as they are able to advise on a number of issues including how to negotiate and obtain the best price in the current property market
One of the things which prevent this is the wrong assumption that instructing a Lawyer can be expensive. This is untrue since many Lawyers have schemes in place which can limit your exposure to such expense.
The other concern is how much can you borrow. This is a question properly addressed to a lender however we have a mortgage broker who can give advise on this if we were instructed. It has to be acknowledged that lenders have differrent criteria and lending multiples so it can only be carried out on a case by case basis.
In the current property market a buyer will need a minimum of ten percent deposit available for exchange of contracts which is usually six to eight weeks from offering on the property.
During the period from offer to exchange the lawyer will be raising questions and searches relevant to the property checking the contract together with the mortgage and in respect of the best law firms preparing the purchase documents for signature. Once all these matters have been finalised a written report is given and the buyer is invited to sign.
The transaction is then ready to exchange when a completion date is agreed usually ten working days from exchange as this is the minimum period to safely be sure that mortgage monies can be released and any further questions arising from post exchange searches can be answered.
It is normal on the day of completion to aim for entry into the property at midday and if the matter fails to complete then compensation is paid by the defaulting party.
I have previously said that now is a good time to be investing in property as it is generally cheaper paying a mortgage than rent and is a good long term investment.
If there are any questions please feel free to post here
Reg
Wednesday 21 May 2008
Buy to let in the UK property market
I was recently asked by a customer a series of questions regarding buying to let a UK property and, with this blog, I hope that I will be able to answer many of the questions that concern potential investors about this particular market.
A buy to let is usually an investment or second property, purchased with the sole aim of it being rented out so that the investor recovers a rent plus, in a rising market, an increase in the value of the property. In a falling market, which we are experiencing at the moment, the return on the investment is likely to be an increased rent.
The procedures are very similar to an ordinary purchase, although if a leasehold property is proposed to be purchased, then the lease will need to be checked very thoroughly, since quite often there are restrictions against letting the property or parting with occupation of it.
It is usual, when looking to enter into this market, to raise the deposit against an existing residential property, however, it is important that each transaction is looked at on its merits, as it is sometimes possible to raise all of the money against the property being purchased for letting purposes. If the investor is building a portfolio of properties, it is also possible to raise money against that portfolio, rather than on individual properties. However, expert advice must always be sought, particularly as buy-to-let mortgages are not regulated in the same way as residential mortgages and the lending criteria is different. In particular, it is likely that the mortgage rate will be higher than for a normal residential property as they are treated as commercial investments.
It is also important for the buy-to-let investor to have appointed, perhaps, their own accountants, since there are various tax implications, particularly, capital gains tax and a specialist accountant can advise on tax mitigation arrangements.
When acquiring these type of properties, it is important that a correct tenancy agreement is entered into, ensuring that you are able to comply with the tenancy deposit schemes that are available and also, if the premises are to be let furnished, that the relevant experts are appointed for the inventory check in and check out.
It is important to obtain correct advice on these types of transactions as there are many pitfalls for the unwary.
Tomorrow I am proposing to give advice to first time buyers, particularly regarding the process in how to negotiate in the UK property market.
Reg
A buy to let is usually an investment or second property, purchased with the sole aim of it being rented out so that the investor recovers a rent plus, in a rising market, an increase in the value of the property. In a falling market, which we are experiencing at the moment, the return on the investment is likely to be an increased rent.
The procedures are very similar to an ordinary purchase, although if a leasehold property is proposed to be purchased, then the lease will need to be checked very thoroughly, since quite often there are restrictions against letting the property or parting with occupation of it.
It is usual, when looking to enter into this market, to raise the deposit against an existing residential property, however, it is important that each transaction is looked at on its merits, as it is sometimes possible to raise all of the money against the property being purchased for letting purposes. If the investor is building a portfolio of properties, it is also possible to raise money against that portfolio, rather than on individual properties. However, expert advice must always be sought, particularly as buy-to-let mortgages are not regulated in the same way as residential mortgages and the lending criteria is different. In particular, it is likely that the mortgage rate will be higher than for a normal residential property as they are treated as commercial investments.
It is also important for the buy-to-let investor to have appointed, perhaps, their own accountants, since there are various tax implications, particularly, capital gains tax and a specialist accountant can advise on tax mitigation arrangements.
When acquiring these type of properties, it is important that a correct tenancy agreement is entered into, ensuring that you are able to comply with the tenancy deposit schemes that are available and also, if the premises are to be let furnished, that the relevant experts are appointed for the inventory check in and check out.
It is important to obtain correct advice on these types of transactions as there are many pitfalls for the unwary.
Tomorrow I am proposing to give advice to first time buyers, particularly regarding the process in how to negotiate in the UK property market.
Reg
Tuesday 20 May 2008
Frequently Asked Questions
Well good afternoon everyone. The time has come for me to start answering some of the questions I am getting asked by clients and others relating to the process of buying and selling in the UK Property Market.
Q What is a HIP?
This is a document required before you can sell a property. It has been imposed on sellers by the Government . The document is now required on all properties that are being sold and contains information that a buyer needs to proceed to purchase the property.
Q Who has to provide a Hip?
The seller of a property is ultimately responsible to purchase the HIP usually through their Lawyer who is best placed to ensure the correct documents are contained in it and that it complies with the relevant legislation. In some cases it is obtained through the selling agent but in my experience this usually delays the selling process as they are unable to provide a compliant HIP to the sellers and Buyers Lawyers. The seller is also responsible to pay for the HIP .
Q What is included in a HIP?
The following documents are usually included
Local Search-Drainage and Water Search-Office Copies of the Sellers Title-Index-Brief details of the property including the sellers name-Energy Performance report. Other documents that can be included but rarely are :- replies to enquiries/property information form-fixtures list and other usual searches
QWhy do I need a HIP and How much does it cost?
In real terms the only reason why a Hip is required is because the Law says so although the only piece of information that is not usually obtained by a Lawyer is the Energy Performance certificate. You must expect to pay upwards of £300.00 for the HIP.
Q If I am provided with a HIP do I need further information?
Whether you are a seller or a buyer the information contained in the HIP is only very basic usually including a personal search which is rarelly acceptable to the buyers Lawyers. You will still need answers to preliminary questions and written details of what is included in the price for the property.
You can see from the above that it is therefore very important that a Specialist Property Lawyer is appointed either before you market your propertyor if you are a Buyer before you finalise your offer to the seller in order that any problems are resolved at the earliest opportunity.
I hope you have found the above informative and I will answer another question tomorrow on Buying to Let
Q What is a HIP?
This is a document required before you can sell a property. It has been imposed on sellers by the Government . The document is now required on all properties that are being sold and contains information that a buyer needs to proceed to purchase the property.
Q Who has to provide a Hip?
The seller of a property is ultimately responsible to purchase the HIP usually through their Lawyer who is best placed to ensure the correct documents are contained in it and that it complies with the relevant legislation. In some cases it is obtained through the selling agent but in my experience this usually delays the selling process as they are unable to provide a compliant HIP to the sellers and Buyers Lawyers. The seller is also responsible to pay for the HIP .
Q What is included in a HIP?
The following documents are usually included
Local Search-Drainage and Water Search-Office Copies of the Sellers Title-Index-Brief details of the property including the sellers name-Energy Performance report. Other documents that can be included but rarely are :- replies to enquiries/property information form-fixtures list and other usual searches
QWhy do I need a HIP and How much does it cost?
In real terms the only reason why a Hip is required is because the Law says so although the only piece of information that is not usually obtained by a Lawyer is the Energy Performance certificate. You must expect to pay upwards of £300.00 for the HIP.
Q If I am provided with a HIP do I need further information?
Whether you are a seller or a buyer the information contained in the HIP is only very basic usually including a personal search which is rarelly acceptable to the buyers Lawyers. You will still need answers to preliminary questions and written details of what is included in the price for the property.
You can see from the above that it is therefore very important that a Specialist Property Lawyer is appointed either before you market your propertyor if you are a Buyer before you finalise your offer to the seller in order that any problems are resolved at the earliest opportunity.
I hope you have found the above informative and I will answer another question tomorrow on Buying to Let
Monday 19 May 2008
Is the UK Property Market in Decline
Well I hope you have all had a restful weekend
The uk property market continues to be at the forefront of the news particularly the failed HIPs discussions and how we might improve the process of buying and selling property in the uk.
I had an interesting discussion over the weekend with someone not closely involved in this market and it became very clear that their opinion was that Government interference in the free market of property selling had contributed largely to the problems now being faced by consumers wishing to sell in the UK Market.
While it was accepted that electronic conveyancing was available it appears that it is being slowed by the raft of regulations with which Lawyers have to comply before ever accepting instructions and thereafter then complying with mortgage companies requirements has left Lawyers floundering in red tape. Not surprisingly the market has slowed.
In order to redress the balance Lenders must be more relaxed as regards there needs and the Government must ammend planning and other regulations in order to ensure that information is available from one source.
I hope to be able during the course of my next few posts to provide further comments on how the UK Property market can be improved
Reg
The uk property market continues to be at the forefront of the news particularly the failed HIPs discussions and how we might improve the process of buying and selling property in the uk.
I had an interesting discussion over the weekend with someone not closely involved in this market and it became very clear that their opinion was that Government interference in the free market of property selling had contributed largely to the problems now being faced by consumers wishing to sell in the UK Market.
While it was accepted that electronic conveyancing was available it appears that it is being slowed by the raft of regulations with which Lawyers have to comply before ever accepting instructions and thereafter then complying with mortgage companies requirements has left Lawyers floundering in red tape. Not surprisingly the market has slowed.
In order to redress the balance Lenders must be more relaxed as regards there needs and the Government must ammend planning and other regulations in order to ensure that information is available from one source.
I hope to be able during the course of my next few posts to provide further comments on how the UK Property market can be improved
Reg
Thursday 15 May 2008
Management Company
I recently attended an AGM for a management company run by the residents which also owned the freehold of the block of apartments. It became clear during the meeting that while the Directors wer seeking legal advice on a number of issues the lawyer involved failed to advise them on their obligations relating to expenses incurred exceeding £250.00 per unit. This clearly had an impact on their ability to raise funds for necessary works at the property and indeed the meeting was adjourned as a result of this and other procedural matters.
It is important therefore when becoming involved in these type of arrangments that the advice of a specialist is obtained which must include details of a Directors obligations as well as their responsibilities as leasehold property is full of pitfalls for the unwary.
Reg
It is important therefore when becoming involved in these type of arrangments that the advice of a specialist is obtained which must include details of a Directors obligations as well as their responsibilities as leasehold property is full of pitfalls for the unwary.
Reg
Tuesday 13 May 2008
I am amazed at Property Experts
It never ceases to surprise me that so called property experts in the space of twenty four hours have such a diverse opinion in assessing what is happenning in the UK Property Market.
Last night there was on BBC2 a programme looking at the American Market and trying to see what effect this may have on the Market in the UK. The american market is as differrent to the UK Market as chalk is to cheese. Their conclusions however were positive and they expected the problems to be short lived.
This morning on the Radio the reverse conclusion was arrived at with Surveyors of all people concluding that the worst is yet to come.
I on the other hand as an expert in the field of over twenty years experience have seen these problems before often brought about by the interference of Governments in the Market. This is no differrent as the present uncertainties felt by the consumer is a direct result of the introduction of HIPs (The Home Information Pack) which was being introduced then it was not and finally was phased in over a period of months. The Government rather than learn the lesson of the past have recently announced another delay in the implimentation of a further aspect of HIPs which does little to inspire confidence in the Buying Public.
My opinion is that the UK Property Market will improve as soon as we the experts rather than being negative and predicting Doom and Gloom look at the more positive aspects that show clearly that over the medium to long term property has out performed any other form of investment.
If we say often enough that things are on the upturn then eventually the message will get through and confidence will return to the UK and in particular to the property market.
Reg
Last night there was on BBC2 a programme looking at the American Market and trying to see what effect this may have on the Market in the UK. The american market is as differrent to the UK Market as chalk is to cheese. Their conclusions however were positive and they expected the problems to be short lived.
This morning on the Radio the reverse conclusion was arrived at with Surveyors of all people concluding that the worst is yet to come.
I on the other hand as an expert in the field of over twenty years experience have seen these problems before often brought about by the interference of Governments in the Market. This is no differrent as the present uncertainties felt by the consumer is a direct result of the introduction of HIPs (The Home Information Pack) which was being introduced then it was not and finally was phased in over a period of months. The Government rather than learn the lesson of the past have recently announced another delay in the implimentation of a further aspect of HIPs which does little to inspire confidence in the Buying Public.
My opinion is that the UK Property Market will improve as soon as we the experts rather than being negative and predicting Doom and Gloom look at the more positive aspects that show clearly that over the medium to long term property has out performed any other form of investment.
If we say often enough that things are on the upturn then eventually the message will get through and confidence will return to the UK and in particular to the property market.
Reg
Monday 12 May 2008
The Home Buying Review
Well I have had a few days to consider the various comments made by the 18 speakersand while some were obviously self seeking and overtly marketing their particular market sector be it conveyancing , Hips or Estate Agency. I was pleased to hear one or two speakers who were obviously more concerned to improve the home buying experience for uk property market.
No decisions were actually made during the meeting however some comments were highlighted for example:-
(i)Service Standards for conveyancing vary widely across the country and while it may be a process proper fees must be paid if standards are to be raised and the experience improved.
(ii)There is confusion in regard to Surveys and Valuations-hence there are few surveys carried out on properties particularly amonst first time buyers.
(iii)EPC's which are presently part of HIPs will remain as Europe requires this as part of reducing the carbon footprint however if the Conservatives come to power at the next election then HIP's itself will be scrapped and will almost certainly be replaced with something of more value to the general public.
(iv) E conveyancing will be promoted more since this will speed the process however efforts must be made to de-mystify the actual process of uk property transfer
(v) The majority of those at the meeting felt that some form of Financial deposit be paid by both the sellers and the buyers which will be forfeited by the defaulting party in the event of the transaction falling through as a result of their actions or inaction
I will post further observations shortly
Reg
No decisions were actually made during the meeting however some comments were highlighted for example:-
(i)Service Standards for conveyancing vary widely across the country and while it may be a process proper fees must be paid if standards are to be raised and the experience improved.
(ii)There is confusion in regard to Surveys and Valuations-hence there are few surveys carried out on properties particularly amonst first time buyers.
(iii)EPC's which are presently part of HIPs will remain as Europe requires this as part of reducing the carbon footprint however if the Conservatives come to power at the next election then HIP's itself will be scrapped and will almost certainly be replaced with something of more value to the general public.
(iv) E conveyancing will be promoted more since this will speed the process however efforts must be made to de-mystify the actual process of uk property transfer
(v) The majority of those at the meeting felt that some form of Financial deposit be paid by both the sellers and the buyers which will be forfeited by the defaulting party in the event of the transaction falling through as a result of their actions or inaction
I will post further observations shortly
Reg
Friday 9 May 2008
The Conveyancing Review
Well if you were hoping to respond to my earlier post you are too late as the meeting was yesterday.
The attendees were an invited audience consisting of experts within the UK property industry, consumers and of course Grant Schapps MP together with Kirstie Allsopp.
The agenda was very detailed and I will post more detail in the next day or so but it became very apparent that while HIPs may have been a very good idea at inception it is no longer fit for purpose.
It was recognised that as a result of a number of factors the property market is difficult both as regards repossessions and remortgaging.
The meeting finished at 4pm following a summing up by Grant.
Keep watching this space.
The attendees were an invited audience consisting of experts within the UK property industry, consumers and of course Grant Schapps MP together with Kirstie Allsopp.
The agenda was very detailed and I will post more detail in the next day or so but it became very apparent that while HIPs may have been a very good idea at inception it is no longer fit for purpose.
It was recognised that as a result of a number of factors the property market is difficult both as regards repossessions and remortgaging.
The meeting finished at 4pm following a summing up by Grant.
Keep watching this space.
Wednesday 7 May 2008
Is the Property Market Improving
Good morning everyone. So we have had a day of sunshine and today appears to be the same again. So has the sunshine helped the buyers to come to market and buy all of those properties that have not sold over the winter?
Well I do not think so as it will take a lot more sunny days and more favourable reports in the press on TV and radio to convince the public that the UK property market is now through the worst of the downturn.
So tomorrow I am off to discuss what can be done to improve the home buying experience and will be reporting the conclusions in my next post so watch this space.
I am planning in future posts to talk about the various searches and some of the pitfalls for the unwary in the property market so again look out for this.
See you soon have a great day.
Reg
Well I do not think so as it will take a lot more sunny days and more favourable reports in the press on TV and radio to convince the public that the UK property market is now through the worst of the downturn.
So tomorrow I am off to discuss what can be done to improve the home buying experience and will be reporting the conclusions in my next post so watch this space.
I am planning in future posts to talk about the various searches and some of the pitfalls for the unwary in the property market so again look out for this.
See you soon have a great day.
Reg
Tuesday 6 May 2008
Review of the Home Buying Process
Well the day is fast approaching when I dress smart and go to the House of Commons to take part in what may be the most comprehensive review of the conveyancing market since the Land Registration Act in 1925. I am looking for your ideas as to how the process of moving can be simplified and improved so as to remove as much stress and uncertainty as possible. Clearly I am aware that we need to start with a blank piece of paper so feel free to post your comments so that I will have something to say that is consumer focused on Thursday 08/05/2008 .
I appreciate you reading my blogs
Reg
I appreciate you reading my blogs
Reg
Monday 5 May 2008
The Great Property Hype
Well today it's Bank Holiday so I think it's appropriate to discuss what the media and the lending institutions have said since I last wrote .
It appears if the signs are right that the market is agreeing with my comments in earlier blogs. So far as I can tell they believe that the fall in the property market will be short lived as the availability of mortgages will improve although they will not be as freely available as before the uncertainty arose.
The media is now trying to talk up the property market but HIPS still continue to have an adverse effect on the speculative marketing of their existing property after an investor has found another property to purchase.
In the next few days I will be posting details of my attendance at the Conservatives discussions on how to improve the home buying and selling experience be it lenders investors or the ordinary client.
I hope you have had a restful break.
It appears if the signs are right that the market is agreeing with my comments in earlier blogs. So far as I can tell they believe that the fall in the property market will be short lived as the availability of mortgages will improve although they will not be as freely available as before the uncertainty arose.
The media is now trying to talk up the property market but HIPS still continue to have an adverse effect on the speculative marketing of their existing property after an investor has found another property to purchase.
In the next few days I will be posting details of my attendance at the Conservatives discussions on how to improve the home buying and selling experience be it lenders investors or the ordinary client.
I hope you have had a restful break.
Friday 25 April 2008
Why Buy To Let?
Good Afternoon Everyone. Today I thought I would talk about the Buy to Let market and in particular answer the following three questions:-
1. To buy or not to buy?
2. To sell or not to sell?
3. What are the risks?
A Buy to Let property is normally a UK property being purchased usually with the aid of a mortgage to be let at a monthly rent following completion to individuals or companies on a monthly rent.
If you listen to the media, be it television, radio or newspapers, you will be hearing that the property market is in free fall and prices are therefore dropping.
In the light of these predictions, it is important to understand why you may wish to purchase the property and what are the advantages.
The first point to recognise is that entering into the Buy to Let market cannot be short term and must be part of a long term investment strategy since as you can see, property values go down as well as up.
It is my considered view that entering into this market at this stage is in fact a sensible strategy provided that you have fully investigated the risks and, so far as is possible, planned against the property being empty for any period.
So is now the right time to buy? In my view, with a falling market and a part of a long term strategy, now is a very good time to buy, particularly as other Landlords who have entered into the market only very recently or have failed to plan, now need to offload their properties. These can usually be obtained more cheaply and sometimes with the benefit of a tenant still being in occupation.
As regards a sale, I think that in the present climate, it is better, unless you need to do so, to hold onto the property and continue to have it let out.
It may sound obvious but, with first time buyers not being able to get onto the ladder because of mortgage shortages, they will need to find properties to live in and this will be in the rental sector. As there will be a shortage of properties available in the rental sector and a lot of prospective tenants looking for property then the rental likely to be achieved in respect of the property will increase. If this is planned correctly using the right advisers then is may be possible to increase the rent every six months.
It is important that the credit checking, holding of the deposit and preparation of the tenancy agreement is prepared by a suitably qualified lawyer.
The risks associated with this type of transaction is that you may find that the property falls in value below the amount you have borrowed on mortgage and also that you may not be able to find a suitable tenant. Clearly, so long as you have given careful thought to your attitude to risk, then it is unlikely over a long period of time that you will lose your investment. If the values increase of course this leaves you free to raise additional capital to purchase other property but as in all property matters it is important that you do not over borrow.
I hope you have enjoyed reading my blog.
Reg
1. To buy or not to buy?
2. To sell or not to sell?
3. What are the risks?
A Buy to Let property is normally a UK property being purchased usually with the aid of a mortgage to be let at a monthly rent following completion to individuals or companies on a monthly rent.
If you listen to the media, be it television, radio or newspapers, you will be hearing that the property market is in free fall and prices are therefore dropping.
In the light of these predictions, it is important to understand why you may wish to purchase the property and what are the advantages.
The first point to recognise is that entering into the Buy to Let market cannot be short term and must be part of a long term investment strategy since as you can see, property values go down as well as up.
It is my considered view that entering into this market at this stage is in fact a sensible strategy provided that you have fully investigated the risks and, so far as is possible, planned against the property being empty for any period.
So is now the right time to buy? In my view, with a falling market and a part of a long term strategy, now is a very good time to buy, particularly as other Landlords who have entered into the market only very recently or have failed to plan, now need to offload their properties. These can usually be obtained more cheaply and sometimes with the benefit of a tenant still being in occupation.
As regards a sale, I think that in the present climate, it is better, unless you need to do so, to hold onto the property and continue to have it let out.
It may sound obvious but, with first time buyers not being able to get onto the ladder because of mortgage shortages, they will need to find properties to live in and this will be in the rental sector. As there will be a shortage of properties available in the rental sector and a lot of prospective tenants looking for property then the rental likely to be achieved in respect of the property will increase. If this is planned correctly using the right advisers then is may be possible to increase the rent every six months.
It is important that the credit checking, holding of the deposit and preparation of the tenancy agreement is prepared by a suitably qualified lawyer.
The risks associated with this type of transaction is that you may find that the property falls in value below the amount you have borrowed on mortgage and also that you may not be able to find a suitable tenant. Clearly, so long as you have given careful thought to your attitude to risk, then it is unlikely over a long period of time that you will lose your investment. If the values increase of course this leaves you free to raise additional capital to purchase other property but as in all property matters it is important that you do not over borrow.
I hope you have enjoyed reading my blog.
Reg
The Property Market
Afternoon. I have had a hectic day spent mostly discussing with banks and clients as to the effect of the Home Information Pack, Northern Rock and the credit crunch on the property market.
I have explained to them that in fact the information being provided in the media is unhelpful and misleading since it takes no account of the facts.
The imposition of HIPs onto sellers has undoubtedly created an unwillingness by UK property owners to put their houses on the market speculatively in the hope of being able to purchase another property. The reality regarding the fall in property prices is again designed to worry potential sellers since the increase in value they have never received and the consequent reduction in it's perceived value will have also affected the property that they may be proposing to purchase.
The reality regarding the mortgage situation is not quite so clear since different lenders are taking a different approach.
Tomorrow I will be speaking to those clients who are proposing to obtain property for letting purposes or those who already own property and may be questioning whether or not to sell.
I hope you have had a good day.
Reg Toy
I have explained to them that in fact the information being provided in the media is unhelpful and misleading since it takes no account of the facts.
The imposition of HIPs onto sellers has undoubtedly created an unwillingness by UK property owners to put their houses on the market speculatively in the hope of being able to purchase another property. The reality regarding the fall in property prices is again designed to worry potential sellers since the increase in value they have never received and the consequent reduction in it's perceived value will have also affected the property that they may be proposing to purchase.
The reality regarding the mortgage situation is not quite so clear since different lenders are taking a different approach.
Tomorrow I will be speaking to those clients who are proposing to obtain property for letting purposes or those who already own property and may be questioning whether or not to sell.
I hope you have had a good day.
Reg Toy
Wednesday 23 April 2008
UK Property Law need expert attention
The whole stressful business of moving house needs a specialist property lawyer.
I am continually amazed at people who try to cut corners when appointing a conveyancing specialist for moving house or office.
Follow this blog to keep up to date with UK property law and what is happening in the UK property market.
I am continually amazed at people who try to cut corners when appointing a conveyancing specialist for moving house or office.
Follow this blog to keep up to date with UK property law and what is happening in the UK property market.
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