Understanding the Legal stuff will ensure there are fewer surprises along the way.
You’ll need a conveyancer to do the legal work for us, and you will have to pay their costs. You can do your own legal work, but we advise you to employ a conveyancer to look after your interests and to explain and deal with complex paperwork. Buying a property is complicated, especially if it involves shared ownership / shared equity.
You can use different conveyancers to deal with our work and yours, but it is normally easier to use the same conveyancer to deal with both. You must appoint a solicitor or licensed conveyancer (in Scotland they must have a practising certificate issued by the Law Society of Scotland) and the conveyancer doing our work must be a member of our approved panel.
You could lose your home if you don’t keep up your mortgage repayments
When you agree to buy or sell a property, you enter into a contract with other people you've agreed to buy from or sell to. Once the contract terms have been agreed, each party to it signs a copy and agrees a completion date, and the contracts are exchanged – in Scotland this is known as the conclusion of missives. Your conveyancer will take care of this and check that all the legal conditions are met.
Before exchange of contracts
At any time before exchange of contracts the seller or the buyer can change their mind, normally without having to make a payment to the other:
- The seller can accept a higher offer from somebody else – called gazumping.
- The buyer can withdraw the original offer and make a lower one – called gazundering.
Before exchange of contracts the seller's conveyancer will usually:
- obtain details of the seller's legal title to the property;
- ask the seller to fill in a Property Information Form and a Fixtures and Fittings and Contents form. These forms collect information about the property and what's included in the purchase price;
- agree the content of the contract of sale with your conveyancer;
- answer any questions raised by your conveyancer;
- ask the seller to sign one of the contracts.
Before exchange of contracts, your conveyancer will usually:
- read the documents sent by the seller's conveyancer;
- make a local search and a drainage search. They may also do other searches depending on where the property is, for example environmental or mining searches – in Scotland this is done by the seller's conveyancer;
- ask the seller's conveyancer any necessary questions;
- receive a copy of your offer letter from us and any formal instructions about acting for us;
- report to you and ask you to sign a copy of the contract.
At exchange of contracts
On exchange of contracts you've to pay a deposit. Normally this is 10% of the purchase price, but your conveyancer may be able to negotiate a lower amount.
If a buyer or seller backs out of the sale after exchanging contracts, they're breaking a legally binding agreement. They'll almost always have to pay the other person compensation.
You should contact your chosen buildings insurance provider and ask them to start cover as soon as you have exchanged contracts.
After exchange of contracts
Between exchange of contracts and the completion date, your conveyancer will usually do the
- make searches at the Land Registry to make sure nothing new has come to light since the seller’s conveyancer got the original copy of the property registry entries – in Scotland, the seller's conveyancer will do this;
- contact your current lender (if any) and ask how much is still owing on your existing mortgage;
- ask you to sign a transfer document, the mortgage deed (Standard Security in Scotland) and any other documents we need you to sign;
- ask us to send the loan money ready for the conveyancer to send to the seller's conveyancer on the day of completion;
- ask you for any remaining money needed to buy the property.
When the mortgage starts
On the day of completion, your conveyancer will pay the seller's conveyancer the balance of the purchase price. Ownership of the property is transferred to you and you become entitled to have the keys and move in.
The seller’s conveyancer will pay off the seller’s mortgage and send your conveyancer the transfer document and any other relevant documents, for example property guarantees. Your conveyancer will then register your ownership and the mortgage at the Land Registry/Registers of Scotland and pay any Government Land Tax owing.
If you've an existing loan that must be repaid, your conveyancer will send the money to your current lender and that loan will end.
When two people buy a property together they're normally registered at the Land Registry as co- owners. There are two main ways of co-owning property, and the legal terms for these are ‘joint tenants’ and ‘tenants in common’. With joint tenants, the law regards the co-owners as owning the whole of the property between them. When one of them dies, the whole of the property passes to the other. Usually, the survivor only needs to provide a death certificate to prove their entitlement to full ownership. Joint tenancy is a much used form of ownership between married and civil partners.
However, family matters can be complex and you may not want complete ownership of the property to automatically pass to the other co-owner. If so, you may want to consider asking your conveyancer to register you as tenants in common.
If you own your property as tenants in common, each of you owns only a share in the home. This could be 50/50, but if one of you puts down a bigger proportion of the deposit, you may want to take unequal shares, for example 60/40. If you die, your share will pass into your estate and be dealt with in line with the terms of your will (or the rules of intestacy, if you don’t leave a will).
This way of holding the property may be useful if you're unmarried or have children from a previous relationship. It can also be used as part of estate planning (to try to pay less inheritance tax). You should ask your conveyancer to explain more about the ways two or more people can own a property.
Occupation of the property
Except in Scotland, anyone over 17 years old who is not your son or daughter but who will be living at the property to be mortgaged will have to sign a consent to the mortgage form. By signing this they agree not to claim tenancy rights if we take possession of your property because you do not keep up your monthly payments.
The conveyancer will:
- Give you legal advice on all aspects of buying a property.
- Unless the property is in Scotland, get a purchase contract from the seller’s conveyancer with details of the property and its ownership.
- In Scotland, exchange missives with the seller’s solicitors.
- Sort out all pre-contract enquires (in Scotland, check that all the conditions of the missives have been met), get copies of existing guarantees, carry out a title check on the property and so on.
- Get the seller’s fixtures and fittings list to see what they will be leaving in the property and check with you that this list includes all that you agreed would be included.
- Check your offer letter when it arrives and explain any parts of it and the mortgage conditions that you don’t understand.
- Except in Scotland, arrange for you to sign a copy of the contract, agree a completion date and exchange contracts with the seller’s conveyancer.
- In Scotland, conclude missives with the seller's solicitor including an agreed date of settlement.
- Ask you to pay your deposit and ask us to send them your loan money.
- On completion day, pay the required amount to the seller’s conveyancer and arrange for you to collect the keys.
- Register your ownership of the property and the mortgage at the Land Registry/Registers of Scotland and pay any Government Land Tax.
Selected remortgages may come with our Remortgages Service where we'll pay our own legal fees and won't charge you for the property assessment.