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I have accepted an offer on my leasehold property. What do I need to do now?
You will need to appoint a Solicitor or Licensed Conveyancer who will be able to talk you through the next steps. You should be provided with a Conveyancing estimate which will set out the legal fees of the firm, together with all the disbursements anticipated at that stage.
You should note that it is not always possible to anticipate all costs that may be required – additional costs can sometimes crop up such as fees for management packs and indemnity insurance policies. You will always be advised of these if this is the case as and when we become aware of the additional fees.
Once you have received your estimate and would like to proceed, you should confirm this to your Solicitor or Licensed Conveyancer. They will then issue you with the Client Care pack and the Terms of Business for the firm. We will also require two forms of ID from you and a payment on account to cover any initial costs.
You will also need to complete and return a Property Information Form, Leasehold Information Form and Fittings and Contents Form which will be sent to the Buyer’s Solicitors with the Contract pack. It would be helpful if you can also provide us with any documentation relating to the leasehold element such as ground rent demands/service charge demands and any correspondence you may have received from the Landlord/Management Company.
I’ve returned all the signed forms and my identification documents. What happens next?
We will review this information and carry out electronic verification of your identity. We will also ask you to make a payment on account to us (usually £100) to cover initial costs and disbursements (payments that we need to make to other parties).
Once we have verified your identity, we will prepare the Contract pack. In order to do this, we will obtain a copy of the property’s title from the Land Registry (if the property is registered) and any other documentation that needs to be obtained.
As the property is Leasehold, we will also write to your Landlord and/or Management Company to request their Leasehold Information pack. You should be aware that there is likely to be a fee to obtain this information and we will advise you what this is, once your Landlord/Management Company has confirmed their fee.
This is then sent to the Buyer’s Solicitors, together with the Property Information Form, Leasehold Information Form and Fittings and Contents Form that you have provided to us, together with the Leasehold Information pack. If we have not yet received the Leasehold Information pack, this is usually sent after the Contract pack has been sent.
Once all the documentation has been provided to the Buyer’s Solicitors, we then need to allow time for the Buyer’s Solicitor to review the documentation.
How long does it take?
It is difficult to advise on timescales for leasehold sales because the matter is dependent on the Landlord/Management Company providing us with the relevant information.
Once the Contract pack and leasehold documentation has been provided to the Buyer’s Solicitors, we will need to allow them time to review this information and raise any enquiries. Some of those enquiries will need to be sent to the Landlord/Management Company and we will need to wait for their reply.
Leasehold sales can take in the region of 12 – 16 weeks but will very much depend on how quickly the Buyer’s Solicitors raise enquiries and how quickly the Landlord/Management Company can provide the relevant information and reply to enquiries. If the information can be obtained quickly, then it is entirely possible that the matter can complete in a shorter timeframe.
There are other factors to consider such as whether you are in a chain, and whether your purchaser is buying with a mortgage.
If your purchaser is buying with a mortgage and/or obtaining Searches (as is required with a mortgage) the process could take a little longer as every Local Authority is different in the time it takes to produce the required information.
What are property sale enquiries?
Once the Contract pack has been reviewed by the Buyer’s Solicitors, they may raise enquiries. These are questions that the Solicitor raises on behalf of the Buyer but can sometimes include queries from the Buyer. The queries arise from the information provided and information that the Buyer obtains themselves (such as the property Searches).
Wherever possible, we will try and deal with the enquiries on your behalf but it is likely that we will need you to assist with some replies to the queries.
As above, some queries may need to be sent to the Landlord/Management Company in order that they can provide their response to these.
If this is the case, we will write to you and advise what you need to do next.
Once we can reply to the queries, these are sent back to the Buyer’s Solicitors.
The Buyer’s Solicitors may then raise further enquiries, or, if they are satisfied with the information provided, they may look to progressing the matter to exchange of Contracts and completion.
What does “apportionments” mean?
The ground rent and service charges are usually “apportioned “ on completion. This means that the Buyer will refund you the ground rent and service charges from the day that they will become the owners of the property up to the end of the current period for the service charges and ground rent.
What is a retention?
The Buyer’s Solicitors may request a retention if there have been service charge deficits in the past. This is where they ask us to retain a sum of money from the sale proceeds in the event that there is a service charge deficit which relates to a period where the property was still in your ownership. This will need to be held until the service charge accounts for the current period have been finalised.
If the Buyer’s Solicitors request a retention, we will advise you further in relation to this.
What does exchange of Contracts mean?
This is when both the Seller and the Buyer become legally bound to the transaction.
You should be aware that we will never exchange Contracts without speaking to all Sellers and obtaining your authority to exchange. Even if we spoke to you yesterday, we will always take your fresh authority the next day simply because a lot can happen in 24 hours.
Exchange of Contracts can only take place when both Solicitors are holding a copy of the Contract signed by their client.
During the exchange, the details of the Contract is checked to make sure both copies of the Contract are exactly the same. The completion date is entered into the Contract (which will usually have been agreed before hand), the sale price confirmed as well as the details of both the Seller and Buyer and the property itself.
The Contract is dated following which, Contracts are deemed to be exchanged.
You are then legally tied into the transaction, as is the Buyer. The completion date and the purchase price will also become “fixed”.
Your signed copy of the Contract is then posted out to the Buyer’s Solicitor and vice versa.
Exchange of Contracts can take place a few days before completion or sometimes, depending on the circumstances of the transaction, can also take place on the same day as completion. This is known as a simultaneous exchange and completion.
If you need a longer period between exchange and completion eg. to make arrangements for removals, then you are advised to inform us as soon as possible so that we can make all parties aware.
What is the completion date?
The completion date is the date that the Seller and the Buyer have agreed to complete the transaction on, through their respective Solicitors.
The completion date is usually negotiated once all enquiries have been satisfied.
All parties in the chain need to agree to the completion date.
You may be asked to agree a completion date either with the Buyer directly or the estate agent. You should always check the position with your Solicitor before agreeing to any dates as we can advise you further in relation to this and the likely timescales of the matter.
What happens on the day of completion?
In order to complete the matter, the Buyer’s Solicitors will send us the sale monies for the property on the completion date.
In most cases, completion will take place around lunchtime, however, the circumstances of the matter could mean completion might not take place until much later in the day. This could be because there is a chain and monies have to move up the chain before they reach us.
Other matters such as issues with the banking system or a particularly busy day for completions (such as the day before a Bank Holiday weekend) might mean monies move through the banking system a little slower than usual.
We will always keep you updated and let you know if completion might take place later than expected.
Once the sale monies have been received by us, the matter will have formally completed. We will inform you either by telephone or email and we will also inform the estate agent so that the keys can be released to the Buyers.
We will confirm the receipt of monies to the Buyer’s Solicitors.
Once completion has taken place, we will then send you the net sale proceeds, deal with the redemption of your existing mortgage (if applicable) and pay your estate agent’s invoice.
If you have any further questions please do not hesitate to contact us and we will be happy to help.