Sale & Purchase of Property

Client Intro

The client is an individual property investor

Case Overview

The client owns a significant number of residential houses and apartments, which are purchased for the purpose of letting.

We advised on the incorporation of several of the portfolio properties into a company name whilst dealing simultaneously with the refinancing of those properties with a different mortgage lender.

Client Intro: 

An investor client purchased a House in Multiple Occupation (HMO) for the first time via an auction

Case Overview: 

The client purchased a six-bedroom HMO at an auction.

We provided a report on the auction pack prior to the auction taking place and advised on the title to the property, the existing tenancies, and the HMO licensing.

The property was then purchased at auction, and we then advised on the rectification of the title issues noted pre-auction through to the completion of the purchase.

Client Intro: 

The client is a developer of small sites to create residential estates

Case Overview: 

The client purchased a site whereby 20 properties were to be constructed.

We advised on the site set-up in terms of the structure of the site and whether or not the roads and sewers were to be adopted or remain private, as well as the arrangement for the future management of private facilities within the estate.

We drafted the Contract and Transfer for the individual residential plots and dealt with the plot sales, having full knowledge of the site and its features.

Client Intro:

A buyer of a rural non-working farm

Case Overview:

We recently acted for the buyer of a rural non-working farm comprising approximately 65 acres.

The property included a separate three-bedroomed flat, in addition to the traditional farmhouse, multiple barns and yards currently house 79 stables, tack rooms, vet and farrier areas.

The title was quite complex, with several parcels of land already having been sold off from the larger estate, which was still pending registration with the land registry.

Consideration had to be given to multiple access rights and reservations across the estate.

Specialist stamp duty land tax advice was also required to ensure advantage was taken of all available release or exemptions.

The property had been developed substantially in recent times, and it was necessary to review in detail all planning permissions and building control documents to ensure that the necessary completion certificates had been obtained.

The property also had a public footpath crossing within the boundaries.

Client Intro:

The purchase of a rural non-working farm

Case Overview:

We recently acted on the purchase of a rural non-working farm.

The property comprised a three-bedroom barn conversion main residence, a one-bedroomed holiday let annex, various outbuildings, and equestrian facilities, including 22 stables, a wash grooming box, and a secure tack room.

The property was approximately 19 acres, including the paddocks.

The sales particulars had not disclosed that the property was subject to an existing overage provision in favour of the local authority.

The provisions were reviewed, and there had been development on the property.

We insisted upon a full report being obtained from the local authority to confirm whether any of the overage provisions had been triggered.

Upon inspection, the local authority confirmed that the development of the buy-to-let property had triggered the overage provisions, and a liability had arisen.

It was also necessary to negotiate with the local authority to amend the restrictions shown on the register title and to obtain their consent to the sale in accordance with the original document containing the overage provisions, to ensure that the sale would progress smoothly and that there would be no issues on completion.

Specialist stamp duty land tax advice was obtained regarding the nature of the various residential buildings and property used to ensure maximum benefits were obtained to all reliefs and exemptions possible.

Client Intro:

We recently acted for a client in an adverse possession matter.

Case Overview:

 The client had been utilising part of their garden for over a decade, which was not part of their registered title.

The criteria for adverse possession had to be met, which includes proving that the occupier in possession of the land has been doing so without the paper title owner’s consent and excluding the rest of the world.

We provided advice on the merits of the claim, giving the client some indication of how the land registry might view the application before it was submitted.

Client Intro: 

We regularly act for first-time buyers, helping them get on the property ladder and moving into their new home.

Case Overview: 

Recently, we acted on a matter assisting a client buying their first home, which was a leasehold house in a rural location.

There were a few defects on the title, such as a landlord who was absent and a lack of access rights to the property.

We advised the clients on the risks and explained what they would need to consider if they were to ever sell or remortgage the property in the future, giving them comprehensive advice to ensure they felt reassured in making any decisions as to the purchase of their first property.

Case Overview: 

We recently acted on a complex matter involving a rural property made up of several different parts of titles. The property included a house, driveways and a paddock separated into a number of titles.

The properties were subject to rights of access by third parties and required us to review a number of deeds dating back to when the original property was bought as a whole.

We also had to negotiate a variation to a deed of easement for services that did not grant rights sufficiently to the property.

Case Overview: 

We have dealt with first registrations of property where a home has been under the same ownership for many years and has not had to be compulsorily registered by the land registry.

This requires us to review the original deeds and submit a first registration application to the land registry.

In a recent case, the land under the original deed did not include land under the client’s occupation, and in addition to a first registration application, we also had to make an application for adverse possession to the land registry.

Case Overview: 

We deal with freehold purchases where terms have been agreed to allow a leaseholder to buy the freehold of their leasehold home. This can involve difficult negotiations with freeholders and their agents to ensure the transfer deeds they draft are fair and, as per the terms, all parties have agreed.

Often, these types of transactions can be frustrating for a buyer as terms are agreed upon before the landlord produces draft transfer deeds, and sometimes, they do not reflect the initial agreement. This can cause a delay whilst terms are ironed out.

We provide guidance and advice to clients as to the risks of accepting any terms and manage to ensure onerous terms are not included in the transfer deeds.

Solicitors have a duty under money laundering regulations to verify the identity of any client in order to satisfy themselves that clients are who they say they are. There are also similar obligations in respect of identity verification for the Land Registry and mortgage lenders.

You will need to provide two forms of ID; proof of identity (usually a Passport or Driving Licence) and proof of address (usually a Utility Bill or Bank Statement dated within the last three months).

Evidence of source of funds is also required under the money laundering regulations as solicitors have a duty to check that the money you are using to purchase a property (be it the exchange deposit or the full purchase price if you are a cash purchaser) has come from a reputable source (such as employment savings) and is not the product of criminal activity.

We will need to see evidence of proof of funds before we are able to accept any monies from you into our client account and we may also ask further questions regarding the source of funds.

Freehold – If you own a Freehold Property you have outright ownership of the property and the land on which it stands, with no time limit to the period of ownership.

Leasehold – Is a method of owning a property for a fixed term, but not the land on which it stands. A document called the Lease grants the owner the right to use the property exclusively for a specified period of time (lease lengths vary, but the most common terms are 99, 125 and 999 years).

Some Freehold properties (particularly common in North West England) pay an annual sum known as a Chief Rent or Rentcharge to a third party who has no other legal interest in the land.

Rentcharge payments are usually between £2.00 and £5.00 per year. Rentcharges have existed for many centuries, but the Rent Charge Act 1977 barred the creation of new rentcharges from 1977 onwards.

Old rentcharges can now be redeemed by making a lump sum payment under the Act. Any rentcharges that are still in existence in 2037 will be extinguished.

Every transaction is different as there are many factors that can affect the speed at which the transaction proceeds; whether there is a chain involved and the stage the rest of the chain are at, the time it takes for the mortgage valuation to be carried out and the mortgage offer being issued, the amount of time it takes for searches results to be received etc.

Other external factors could include someone in the chain going on holiday (which is a common issue for clients buying or selling during the summer holidays) or bereavements/illness in families that potentially affect the transaction.

If you have do have a particular timescale from the outset, you should advise us of this so we can advise the other parties in the transaction and keep you updated on the liklehood of achieving that date for you. At Myerson the bespoke service we offer allows us to work to your timescales, where external factors allow and keep the transaction moving forward. 

We would advise you not to set a specific date for completion (and make arrangements around this date such as booking removals) until all parties in the chain are ready to commit to an exchange of contracts.

The deposit on your purchase property is payable on exchange of contracts. This means that you do not have to pay the deposit at the outset of the transaction. When the transaction is near to exchange we will inform you that the deposit needs to be paid to enable exchange of contracts to take place. The deposit can be paid by bank transfer (CHAPS or BACS) or alternatively by cheque.

An exchange deposit is usually 10% of the purchase price. This deposit is forfeitable in the event of the buyer withdrawing from the transaction.

If you do not have sufficient funds in order to pay a full 10% deposit (for example if you are obtaining a 95% mortgage and are therefore only have a 5% deposit) you must make us aware of this as soon as possible in order that we can advise the Seller’s solicitors and agree a reduced deposit with them.

We are often asked about the difference between exchange and completion.

‘Exchange’ is the term referred to when all parties are in a position to commit to proceed and the transaction becomes legally binding. The exchange happens by phone between the two parties solicitors when each holds a contract signed by their respective clients. The solicitors agree to the contents of the contract, they are each dated and then ‘exchanged’ by post. On exchange the buyer pays the deposit to the seller, usually 10% of the agreed price of the property but this is sometimes varied particularly where there is a chain of transactions.

Completion’ is the date that the title to the property is transferred from the seller to the buyer and the buyer takes possession of the property ie keys handed over.

The period between exchange and completion varies in each transaction and the parties involved; exchange and completion can take place on the same day (this is known as simultaneous exchange and completion) or exchange can take place with completion several months later. It is usual however to have between 5 and 20 working days between exchange and completion.

You will not need to attend our offices for us to exchange and complete. Exchange takes place between the buyer’s and seller’s solicitors on the telephone.

We will however contact you before we exchange to ensure that you want to commit to the transaction, that you are happy with the completion date and that none of your circumstances have changed. We will then inform you once exchange has taken place so you can implement your building insurance and make removal arrangements etc. On the completion date, the solicitors arrange for the relevant monies to be transferred and received to complete the matter. So again, you do not need to attend our offices for completion to take place.

We will contact you to advise you that completion has taken place so you can vacate the property and hand the keys to the agent (if you are the seller) or collect the keys and take possession of the property (if you are the buyer).

All documentation that has to be signed by you can be done in person at our offices or we can post/email this to you, whatever suits you best. We cannot exchange/complete until all necessary documents are in our possession.

Under money laundering regulations, solicitors also have a duty to verify your parents’ identity and see evidence of their proof of funds. This also applies to any other third party such as a partner or other family member who may be assisting you financially.

If you are obtaining a mortgage to purchase the property, solicitors are also under an obligation to disclose any gift to the mortgage lender and ask the person(s) providing the gift to sign a gift declaration confirming that the money they are providing is purely a gift and is not repayable and they do not have any interest in the property.

This will very much depend on your individual circumstances. The tax you will pay will vary according to where the property you are buying is located. In England you will pay Stamp Duty Land Tax (SDLT) and in Wales you will Land Transaction Tax (LTT).

Wales introduced LTT on the 1^st April 2018 and the rates payable differ to SDLT.

SDLT and LTT have a surcharge of 3% payable if the property you are buying is classed as an ‘additional property’. The regulations can be tricky to understand and after discussions with you we can advise you on the tax we consider to be payable or refer you to a specialist tax advisor.

You may also be entitled to First Time Buyer Relief if you are purchasing in England. Again, we would need to discuss your circumstances with you to ascertain if this relief can be claimed.

There are differing levels of survey that can be undertaken against the property you are purchasing ranging from a basic valuation to a full structural survey.

The survey has to be arranged by you and is often undertaken by the same person that carries out a mortgage valuation.