Conveyancing
Home »
What is Conveyancing?
To put it simply, the term “conveyancing” is the legal process involved in the transfer of ownership of property. This covers the legal and administrative parts of the process.
To transfer ownership of land, a title deed (usually in the form of a Disposition) must be drafted, signed by the current owner of the land, and granted in favour of the new owner. This deed must then be registered in the Land Register of Scotland. Once the registration process of the deed has been completed, the new owner has title to the property and has a ‘real right’ of ownership.
There are key elements of the conveyancing transaction. All these parts of the process are dealt with by a conveyancing solicitor:-
- Note of Interest & offer;
- Negotiating the contract (the missives);
- Checking the title deeds, survey & search reports.
- Paying the purchase price & completion
- Registering the title deeds in the Land Register of Scotland.
Why do I need a Solicitor?
It is the law in Scotland that only a qualified person can draft any writ relating to heritable or moveable estate:-
“any unqualified person, including a body corporate who draws or prepares … any writ relating to heritable or moveable estate … shall be guilty of an offence.”
This means that only qualified solicitors can prepare and finalise the drafting of title deeds and missives in relation to a sale or purchase. Accordingly, anyone who wishes to purchase or sell a property in Scotland must instruct a solicitor to do this on their behalf.
If you have a mortgage it is also usually a requirement of the mortgage lender that the transaction is dealt with by a firm of solicitors. The solicitors handle the money involved in the transaction. Where there is a mortgage for a sale the solicitors deal with the repayment of the loan. Where there is a mortgage for a purchase drawdown of the loan funds and payment of the purchase price is dealt with by the seller’s solicitors. The funds are held in the firm’s designated client deposit account and all funds are held in trust on behalf of the client.
Solicitors in Scotland are regulated by the Law Society of Scotland. Solicitors are bound by professional ethics & a code of conduct. This offers clients a lot of protection as these standards have a high bar. Clients are also protected by professional indemnity insurance which is compulsory for solicitors to have in place when dealing with any kind of legal work.
What is the difference between a lawyer and a solicitor?
A lawyer is someone who practices law, which includes solicitors.
Remortgaging
Given the present uncertainty surrounding mortgage interest rates, we appreciate that many clients will be keen to find a new mortgage deal when their fixed rate term comes to an end, rather than moving over indefinitely to the unpredictability of the standard variable rate. We have seen a number of lenders recently withdrawing their “fees free” deals for remortgages and perhaps offering a cashback facility to new customers which can be put towards their legal fees and outlays when remortgaging.
We are happy to offer a package which will minimise the legal costs to clients who are looking to remortgage and which will also enable their transaction to be completed quickly and therefore also reduce the time spent on their present lenders’ standard variable rate.
If you are coming to the end of your fixed rate term and are not sure how to proceed we would be happy to put you in touch with mortgage brokers who will be able to give you independent advice on the latest and best deals available to you in an ever-changing mortgage market.
How do you buy a house in Scotland?
The Offer
The conveyancing transaction starts with the acceptance of an offer. The formal offer will be in a standard form and will detail (1) the agreed purchase price, (2) the address of the property being sold, (3) name and address of the purchaser, and (4) any special conditions. Offers in Scotland will usually incorporate the Scottish Standard Clauses which are the standard terms of conditions used in a conveyancing contract in Scotland.
Acceptance of the Offer
The accepted offer will be passed to the seller’s solicitor to progress the conveyancing. The seller’s solicitor will take detailed instructions on the offer and will issue to the buyer’s solicitor a qualified acceptance letter. This will adjust the terms of the contract in more favourable terms for the seller and will remove any suspensive conditions from the offer. At this stage, the solicitor will also negotiate a suitable date of entry.
Once the qualified acceptance has been issued to the buyer’s solicitors, this puts the ball back in their court to progress or finalise the contract. This part of the process is commonly referred to as negotiating ‘the missives.’ The conveyancing contract is not binding on either party until the missives are concluded.
Funding
The buyer’s solicitor will not conclude the contract until the buyer’s funding is in place, whether the funds are coming from a mortgage, the sale of a property, or a combination of both. Where there is a mortgage, the buyer’s solicitor will need a valid mortgage offer from their client’s mortgage lender. They will also have to be satisfied with any special conditions that are in the offer of loan.
The source of funds for the deposit will be checked by the solicitor, in line with the anti-money laundering regulations. If the buyer is also selling their property and their deposit is coming from their sale proceeds, the missives will have to be concluded for their sale before the missives can be concluded for the purchase.
Examination of Title & Title Observations
As essential part of the process is the due diligence and checking of the title deeds and associated documents. This is one of the most skilled jobs that the solicitors deal with in the process and is essential to protect the client’s rights of ownership and the interests of the mortgage lender.
The title must be ‘good & marketable.’ The buyer’s solicitor will carry out an examination of the title. The title deeds can take various forms – it might be condensed in one title sheet, or the title will be made of up of a bundle of historic deeds. The title plan, legal description and title conditions will be examined and the buyer’s solicitor will prepare a report on title to send to their client. If there are any discrepancies or observations, these will be raised with the seller’s solicitor. Observations on the title are a standard part of the conveyancing process. The observations will depend on the buyer’s solicitor’s findings and any comments or questions from their client. If there is a mortgage lender, the title will also have to be certified and signed off by the solicitor to the bank. This is a requirement before the loan funds will be released.
Another part of the due diligence process is the buyer’s solicitor checking the property search reports. For a standard conveyancing transaction, a legal report and a property enquiry report will be provided by the seller to the purchaser. If the property falls within a former coal mining area, a Coal Authority report will also have to be exhibited. The provision of the searches is a condition of the missives. The buyer’s solicitor must check the searches carefully and identify any potential issues. Until the buyer’s solicitor is satisfied further enquiries might be raised and additional documents requested.
If the property is factored, the seller is also obliged to provide a letter from their factor. This is in a standard form and must be exhibited before the date of entry.
If the home report has identified issues that are to be dealt with by the conveyancer, this will also be raised by the buyer’s solicitor. Where a property has been altered, or specialist treatment work carried out, the appropriate documentation should be provided by the seller to the purchaser. Again, these documents will have to be to the satisfaction of the buyer and their solicitor.
A typical conveyancing transaction will take 6-8 weeks from acceptance of the offer to completion. This will depend on all the above elements falling into place by the agreed date of entry.
Completion
On the date of entry, the buyer’s solicitor will pay the purchase price to the seller’s solicitor. In exchange, the seller’s solicitor will deliver a signed disposition which is the title deed that transfers ownership of the property from the seller to the buyer. At settlement, the keys for the property will also be given to the purchaser.
There are a few items to be dealt with by the solicitor post-settlement. The seller’s solicitor will have to redeem any mortgage over the property and have the lenders’ security discharged from the title. The buyer’s solicitor will have to send the application for registration to the Land Register of Scotland and submit a Land and Buildings Transaction Tax return to Revenue Scotland. The updated title will be issued by Registers of Scotland by email and is electronic. It is only once the title has completed registration that the conveyancing file can be closed.
Please note the above noted content is for information purposes and cannot be relied on or constituted as legal advice by Delaney Graham Ltd.
Get Your Free Conveyancing Quote
