Advice on The Legal Work behind Buying A House
Choosing a Solicitor
Solicitors are practising lawyers and officers of the Courts who have had a legal education and, who have passed examinations. Under the Solicitors Northern Ireland order 1976 solicitors in Northern Ireland have a monopoly on the legal process involved in the transfer of land (conveyancing).
Solicitors are regulated by this statute and the Law Society of Northern Ireland in relation to the fees they are allowed to charge and how they may advertise their services. They are also subject to spot checks by the Law Society on their management of client monies and have to undergo an annual independent audit of their accounts and disclosure is made to the Law Society of any accounting irregularities. Solicitors have to annually pay a contribution to a compensation fund which is used when solicitors commit fraud or become bankrupt. This fund has made sure no client in Northern Ireland has ever lost money as a result of a solicitor’s fraud or insolvency.
In Northern Ireland estate agents find the buyer and agree price details; solicitors do the paperwork. Contracts for the sale and purchase of land must be in writing. For this reason and because the process involves so much money solicitors act for sellers and buyers to advise and protect their respective interests. This process is called conveyancing.
Conveyancing procedures involve the preparation of a contract by the seller’s solicitor and the examination of the contract and the title (ownership) documents by the buyer’s solicitor prior to signature. The seller is obligated to disclose all his knowledge about the property but the buyer carries responsibility for buying the property in its current physical condition. The process is complicated and will take longer than you think.
Conveyancing is complex legal work. In Northern Ireland fees charged for the conveyancing of residential property are subject to a competitive marketplace. Some tips are:
- Solicitor’s conveyancing fees vary considerably between firms and there are lots of firms. Some firms adhere closely to traditional fee scale rates (1% of the price + an hourly charge for time) and refuse to quote for business. Others are keen to give competitive quotations.
- Some firms give competitive verbal fee quotations over the phone. Do not instruct a firm on the basis of a verbal quotation over the phone. Only consider instructing a firm which has provided you with a detailed written quotation. Solicitors are obligated by the Law Society of Northern Ireland to provide you with written terms of business detailing the pricing arrangements in a specific detailed form.
- Check the written quotation details not only the firms proposed fees but also all the tax, registration, search and other expenses involved. The additional expenses will be the same for all firms although some firms identify these costs more clearly.
- Very often the presentation of the quotation information is a good guide to how organised and efficient the firm is.
- Most of your business will be transacted over the phone or by post with perhaps only one visit to the solicitor’s office necessary so a local firm is not essential. All your business can be affected over the phone or post if you want.
- Does the firm:
- advertise it clearly wants this type of work?
- do the staff have pleasant and friendly telephone manners?
- have you been given good detailed written quotation information?
If a firm passes the above tests don't quibble if the professional fees are a few pounds (rather than hundreds of pounds) more.
A solicitor is responsible not only to his seller client but also to the seller's lender who must be paid off the entirety of the existing loan. Similarly a solicitor for a buyer is also legally responsible to the lender providing the new mortgage money and has to report to that lender on behalf of and at the expense of the buyer.
Home Charter Scheme
The Law Society of Northern Ireland has a compulsory kite mark quality scheme to set standards of quality of work by solicitors. Whilst the scheme does not measure how quickly or efficiently solicitors do their work, it does set minimum standards and tasks which are expected to be adhered to by all Solicitors in all residential conveyancing matters. Some firms provide better standards and speed of service at more competitive rates than others. The scheme provides a benchmark against which complaints can be measured.
Sellers Solicitors jobs
A quick checklist of tasks for the seller’s solicitor in Northern Ireland is:
- examination of ownership documents.
- preparing and sending a sale contract with the ownership documents on loan to the buyer's solicitor.
- helping the seller complete detailed disclosure questionnaires.
- applying for property certificates from the Department of the Environment and local council.
- applying for Bankruptcy and Court Judgment searches against the seller.
- applying to the Land Registers for searches against the seller to make sure all outstanding mortgages or registered debts are taken into account.
- having the seller complete and settle detailed lists of fixtures, fittings and contents included or excluded from the deal.
- ensuring the seller has an Energy Performance Certificate.
- obtaining exact financial details of debts owned to the lender, estate agent, ground landlord and others in preparation for discharge on completion.
- considering any amendments to the contract after the buyer has signed once the contract has been received back from the buyer's solicitor and settling any problems which have arisen.
- having the contract countersigned by the seller and put into legal effect by faxing a copy of the contract to the buyer's solicitor.
- having the seller sign transfer documents in preparation for completion.
- on completion day paying off all mortgages and charges against the property and applying for release documentation.
- informing the Rates Office of the buyer's name and forwarding any refund to the seller.
- accounting to the seller for the net proceeds of the sale after debts and expenses are paid off.
- completing the registration of release documentation to free the property from previous debts.
- closing the solicitor's file and storing it for twelve years in case of future disputes.
Legal Extras on Selling
When selling a property there are various payments which have to be paid on your behalf in addition to the Solicitors fee:
Value Added Tax
VAT is a tax on the purchase of goods and services and is currently 17.5%. This will be charged on Solicitors fees and will be included in some other expenditure.
The Department of the Environment currently charge £30.00 for their certificate revealing the current state of the planning, road, sewers and water issues. Local Councils charge £60 for providing their Property Certificate (revealing the current public health issues.
Ordnance Survey Maps
An ACE map from Ordnance Survey has to be provided before the Department of the Environment or local councils will respond to the property certificate request. Sometimes a suitable map is with the title deeds to a property but if one is needed it will cost £32.90. Larger firms of Solicitors are more likely to have a large library of maps resulting in a possible saving of this expense.
Bankruptcy and Court Judgment searches against the seller cost between £25 to £50 depending on whether there is one or two sellers.
Statutory Charges, (government debts) searches are usually about £18.
Registry of Deeds searches vary between £30 and £100 depending on the number of names and length of time searched against.
Land Registry searches are £25 for a priority search.
Landweb searches vary between £3.00 and £13.00.
There may be additional expenses for obtaining copies of planning permissions, building control approvals, land registry maps or other such matters which may arise in some transactions. Your solicitor should advise you of these as they arise.