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A simple guide to conveyancing in Scotland

Buying or selling a property can be both very exciting and stressful at the same time. The legal process to acquire title to a property is known as conveyancing. Although people tend understand the basic concept of the process involved, the legal procedures tend to raise many questions.

Inability to understand what conveyancing really is, how long it takes, what the costs involved are and what the process consists of, tends to cause a lot of uncertainty and confusion for people.

conveyancing guide

This guide will provide you with all the necessary information you need to know in relation to conveyancing.

What is conveyancing?

Conveyancing is the  legal process that transfers ownership of a property from the existing owner to a new owner. Conveyancing lawyers – conveyancers - also  assist with remortgaging and the negotiation of leases.

Conveyancing involves a creation of a contract between a seller and a purchaser, whereby the ownership of the property is transferred from one person to another. This is done through the  completion of the missives – the technical term for the contract. The missives are formed by an exchange of letters between solicitors representing the sellers and purchasers.

Whilst the exchange of letters might seem simple and very straightforward, there are a number of factors, which affect the process. For instance, the purchaser’s offer may be subject to searches and checks directly affecting the property. This process is in place in order to ensure that both parties have a complete understanding of what is included in the price of the purchase as well as what the factors that affect the subjects of the sale are. In addition to this, it is crucial to allow a solicitor to carry out the necessary checks to establish whether there are any matters that the purchaser needs to be made aware of.

Such matter vary but can include outstanding communal repairs, compliance with local regulation in relation to the fabric of the building and even relevant paperwork and permissions in a situation where alterations to the property have been made.

Thorough checks ensure that a purchaser does not end up in a situation where they are confronted with additional costs having already purchased the property. This also ensures that they have a good knowledge of what they have purchased.

How long is the process of conveyancing in Scotland?

Timescales involved in the process of either buying or selling properties varies on the complexity of the sale. Normally, the process can be completed within a very reasonable period of time and that is between 4 to 9 weeks from the moment of offer being made to completion.

That being said however, the majority of the time, there are a number of parties involved in the transaction and therefore in certain scenarios it can take longer. Your solicitor will generally give you an estimate of how long the process will take after your initial meeting but it is always good to be prepared that there may be some delays and complications along the way.

Choosing the right solicitor

In order to enter into the conveyancing process of either buying or selling a property, it is necessary to find a property solicitor who will be in a position to carry out the legal work. There are many law firms in Scotland and many of them offer such services. That being said however, it is crucial to find a firm that will ensure that the legal work is carried out properly and smoothly.

If either selling or purchasing a property, it is crucial that an offer comes from a solicitor and therefore it is always a good idea to undertake research, find the right solicitor for you in plenty of time, before you decide to instruct them to act on your behalf.

When choosing a solicitor to carry out the legal work in respect of conveyancing, it is crucial to remember that it is a very important transaction and therefore paying a little extra will ensure peace of mind. More experienced solicitors charge more for their legal fees and therefore it might be slightly more costly.

In addition to this, very often, solicitors advertising a low cost can carry hidden extra fees, which might end up costing you more for the full transaction in the end. It is therefore best practice to find a solicitor who will carry out the legal work for a fixed fee rather than based on work carried out in process. This will afford security, ensuring that costs do not increase drastically throughout the process of transaction.

When considering various solicitors and law firms, it is popular to hold the view that you should instruct someone local to carry out the conveyancing. This however is not always necessary. Although it might be easier to hand in documents and attend appointments at a local firm, it is important to instruct someone who is very efficient and reputable to undertake the work. A solicitor, whom will communicate with you throughout the process, is much more desirable than one that is simply local. In addition, the use of information technology services allows, documents to be posted out, emailed or faxed. Therefore transactions can run smoothly even if the solicitor is not local to you.

Experienced solicitors will ensure that you have one point of contact throughout your transaction. This will afford you peace of mind throughout the full process, reducing the level of stress involved.

 Offer/Acceptance stage

When looking to purchase, once you find a property for which you wish to make an offer, your solicitor will put together an offer after confirming with you specific details. Your offer will include the purchase price of the property, a proposed date of entry as well as what exactly is included in the purchase price - for example any fixtures and fittings. This offer will then be sent over to the estate agency, following which you will find out whether you were successful or unsuccessful.

On the other hand, if you are selling a property, your solicitor will be in a position to assist you with the process of reviewing the offers. This will then allow you to make a decision on which offer best meets your criteria before accepting one.

Negotiation stages

In conveyancing, a contract between the buyer and the seller is concluded through missives, which as explained above are essentially letters exchanged between each parties solicitors.

Missives will include conditions of the sale, specifying the details of the purchase price, the date of entry as well as various other factors.

Prior to concluding the missives, your solicitor will have to ensure that the legal aspects of the sale and purchase are in order. Initially, the legal ownership will be checked to ensure the seller has the ability to enter into such transaction. Following which, your solicitor will review the title burdens and servitudes within the Title Sheet and point out exactly what they state and whether there are any restrictions on the property that may affect your purchase and your freedom to use the property. For example, if you have to allow a neighbour access over your driveway to reach the road.

At this stage, the solicitor will also review any development plans that could affect the property in question and your desire to purchase it. If there were any works carried out to the property, the solicitor will ensure that relevant paperwork and permissions was obtained prior to this from the local authority, ensuring you will not be affected by any additional costs after the transaction has been settled.

Lastly your solicitor will prepare both a deed for a transfer of ownership of the property you decided to purchase to ensure it will be in your name and a standard security for the mortgage.

The standard security is a document that is registered with the Registers of Scotland. The document gives your mortgage lender security over the property and allows them to repossess the property if you fail to keep up with  repayments towards your mortgage.

Once the missives have concluded, a binding contract will be in place. It is important to remember that your solicitor will sign the contract on your behalf and therefore you do not have to sign this personally. That being said however, once missives are concluded the terms of the contact are legally binding upon you.  

There are a couple of documents which you will need to personally sign and your solicitor will arrange for a signature to be obtained, once the documents are prepared.

Settlement

 Settlement takes place on the date of entry and it is at this stage that solicitors will exchange the final paper work. Transfer of the purchase funds will also be completed and payment for any other outstanding fees will be made. Once all is settled, keys will be made available for the property that was sold.

Your solicitor will then proceed to make payment for Land and Building Transaction Tax (mentioned below) if there was any payable, following which the relevant documents will be sent to the Registers of Scotland for registration. This procedure is to ensure that standard security is placed on the title, if you have one, and that change of ownership has been registered.

Conveyancing fees

When planning on moving home or buying a property it is crucial to take into account the additional conveyancing fees that come along with the transaction. It is always best to plan ahead and think about these when budgeting. Your solicitor will always give you a breakdown of the costs involved, specifying exactly what their fees are and what the cost of the taxes and other outlays will be.

Below you will find a guide of what the conveyancing fees are. You should be aware that these will differ depending on individual circumstances and your solicitor will calculate everything to provide you with an account of expenses accordingly.

Advance Notice

The fee for registering an advance notice is £20 and this is payable to the Registers of Scotland. Solicitors register advance notices on both sale and purchase transaction in order to ensure that your rights to either the property you are selling or purchasing is protected. This process also affords protection to the lenders right if you are taking out a mortgage to conclude the transaction.

Solicitor fees

Solicitor fees will vary depending on the work involved in either the purchase or the sale. Your solicitor will provide you with a quotation of how much the transaction will cost, once they have had an opportunity to examine what will be involved in your individual property transaction. Generally fees will fall within the estimates of £500 to £2,500. As reinforced previously, it is important to remember that finding the cheapest option is not always the best approach to take when entering into property transaction. It is therefore worthwhile spending a little extra on solicitor fees, in order to ensure a professional and attentive service throughout the process.

Registration fees

Registration fees just like advance notice payments are payable to the Registers of Scotland. The fees are payable for registering the deeds in the Land Register and all vary depending on the price of the transaction. It is important to note that the registration fees start at £60 and can go up to £7,500. Solicitors will provide a breakdown of the fees in order to ensure you have a full understanding of costs involved.

Searches

In order to ensure you have a full understanding of what exactly you are buying, your solicitor will carry out all necessary searches on the property in question as well as the area. This process allows determining whether there are any issues or anything you should be notified of prior to the purchase. Solicitors also make checks on the buyer and the seller of the property to ensure smooth transactions without any complications. Prices for searches are estimated between £100 and £200 but each individual transaction is different and consequently, a solicitor will specify the exact cost to you.

Lands and Building Transaction Tax

Lands and Building Transaction Tax is a Scottish government tax. This applies to properties above the value of £145,000 and it is how much is payable is determined on each portion of the property’s sale price.

The table below will provide you with the percentage of tax payable, according to the sale price.

Up to £145,000                                                                                                           0%

Between £145,000 - £250,000                                                                                   2%

Between £250,001 - £325,000                                                                                   5%

Between £325,001- £750,000                                                                                   10%

£750,000 or more                                                                                                      12%

If for instance you wished to purchase a property with the sale price below the sum of £145,000, you will not be exposed to the cost of LBTT. If however, you wished to purchase a property with the sale price of £360,000, you would then have to pay £9,350 in LBTT.

You can easily calculate this online and your solicitor will be in a position to let you know exactly how much will be payable but to provide you with some details, it is calculated as follows:

There is no LBTT on the first £145,000. 2% is the chargeable on the amount between £145,001 and £250,000 as per the table above. This amounts to the sum of £2100. There is an increase to 5% between the amount of £250,000 and £325,000, which adds to £3,750. Lastly, 10% is charged for the portion above £325,000, adding up to £3,500.

Telegraphic-transfer fee

Your mortgage lender will charge you a fee, which will range between £25 and £50 for the transfer of mortgage funds to the seller. This fee is normally paid on the date of entry but it can be added to your mortgage, allowing you to pay it off monthly.

Conveyancing fees and the circumstances around it vary depending on the individual aspects of transactions. Speaking to a property solicitor ahead of time will ensure they can address any specific aspects you may wish to have a better understanding of, how much the transaction will cost you, as well as the procedure involved.

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