Guide to Purchasing Residential Property

Missives

We shall submit an offer to the selling agents on the terms of your instructions and will provide you with a copy for your own records, as well as the Scottish Standard Clauses which form forms part of the offer.  You will note that the offer has many conditions and therefore the sellers’ solicitors will try to minimise the warranties or guarantees which a seller has to give to a purchaser by issuing a qualified acceptance.  This qualified acceptance will be accepting some of the clauses within the offer whilst deleting others.  It will also incorporate further clauses imposed by the sellers. If you are satisfied with the terms of the qualified acceptance then we will issue a formal letter confirming this consensus.  This is known as concluding the missives (or the bargain).  Alternatively it may well be that we are not satisfied and we will therefore require to submit yet a further formal letter amending their qualified acceptance.

In any case we will inform you as soon as missives have been concluded. Once missives have been concluded both yourself and the seller will have entered into a legally binding contract (otherwise known as the missives). Please note that we will sign these contract letters on your behalf once we have your authority to do so. You will not sign these letters personally.  If you are purchasing as well as selling, then we will always endeavour to conclude the missives for your sale and purchase as simultaneously as possible, although in practice this is not always feasible. The time taken to conclude the missives varies accordingly to the circumstances of each transaction.  It will be that you will not wish missives to be concluded until your mortgage offer has been received by us and, if you are sale dependent, until such times as you have concluded a missive for your own sale transaction.

Joint Instructions

We require to take instructions from our client in relation to every transaction. In joint transactions we appreciate it is not always practical to take individual instructions from each party and we can accept instructions from one party provided both parties are agreeable. Should you not be agreeable to one party providing joint instructions please let us know immediately so we may make the necessary arrangements to obtain instructions from both parties

Seller’s Home Report

There is an obligation upon the seller to accurately and truthfully answer the property questionnaire.  This obligation rests solely with the seller and therefore this firm will accept the property questionnaire at face value and will not investigate the authenticity thereof. It is important to remember that the surveyor is instructed by the seller.  If the home report was conducted more than three months ago, your lender may require another valuation survey as a “refresh”.  Or if the surveyor is not on your lender’s approved panel, you will have to find another lender or instruct a new valuation survey.  Any such request for a refresh or access for a new surveyor should be made directly to the estate agents.

Please do bear in mind that we only check the section marked “conveyancers” section for any comments that the surveyor wishes to bring to our attention.  This is because the condition of a property is very subjective to clients.  If you do however have any queries or concerns within the home report then please do advise and we can perhaps assist, or if not advise of the party who may be able to do so. If the home report makes reference to past alterations then we may require seeking the appropriate Local Authority Consents, or where possible a substitute thereof, before the transaction can be completed.

The Property

Firstly, it is important to bear in mind that when purchasing a property you do not have the same legal rights you have when purchasing goods (i.e a motor vehicle, laptop etc) as consumer laws do not apply.  The missives is the full contact between yourself and the seller, and until a missive is concluded there is no legally binding contract.  We shall provide to you a copy of the title deeds.  If there is anything incorrect thereon (bearing in mind that we have not viewed the property) then please inform us immediately. It is usual for properties to have burdens (which are title conditions) imposed upon them.  For example, the parking of vehicles, keeping pets, altering the property without permission, construction of boundary walls etc.  Further it is common for public utilities like gas, water and electricity companies to have rights on your property for the purpose of maintenance of their pipes and cables.  You may also require insuring and maintaining your home and generally not use it for a purpose which would be a nuisance to neighbours.  The title deeds may also prohibit you from carrying out any trade, business or profession and therefore if it is in fact your intention to use the property for anything other than your main residence or as a rental property then please advise us immediately.

If you are purchasing a flat (this includes a 4-in-a-block property) there will be conditions that all flat owners share certain parts of the building.  These are known as common parts which are usually, but not always, the foundations, outside and division walls, the roof, gutters and down pipes, common entrance, close and stairs, back courts, attic space etc.  It is more common that in older properties no factor has been appointed, and therefore all owners must arrange any repairs on an informal or ad hoc basis among themselves.   In any case please note that if a flat owner fails to pay his/her share the other flat owners or the factor (if applicable) can sue him/her for full payment thereof including all court expenses.

Please bear in mind that the only information provided to us as solicitors by the factors is whether there is a common buildings insurance policy (and details thereof) whether there are any outstanding charges due by the seller, and whether there are any major repairs instructed and/or not yet paid for.  If you require any further information then you should contact the factors directly to seek this. With regards to houses within modern estates, ie built post 1970, the maintenance of public access areas are the responsibility of all the house owners.  Therefore you are likely to receive a quarterly or yearly invoice for the maintenance of grass on all open areas within the estate.

Central Heating, Appliances etc.

The missives will contain the details of all moveable items to be included in the price (it is usually condition (First) of our offer and clause 1 of the Scottish Standard Clauses, the formal response from the solicitors may remove/include some items and therefore it is important to read all documentation carefully as no individual list of the moveable items will be provided).  There will most likely be a condition within the missives that you will have a specified period of time (usually five working days) to intimate any defects in the central heating system, electrical appliances and mechanical appliances to the sellers and have the sellers bear the expense of repairing same.  Please note that this merely relates to defects from the date of the offer until the date of entry.  Any defects already in existence prior to the date of entry will not be included.  It is extremely likely that the house has been occupied in the very recent past and therefore you must give due consideration to fair, wear and tear of the aforementioned systems and appliances as well as thought to the age of same.  It is usually advisable to have some available funds to deal with any snagging that may come to light after you take possession of the property.

No maintenance contracts/Guarantees/manuals for anything of a working nature (i.e heating system, cavity wall installation, white goods, windows etc) is obtained from the purchaser.  Instead we ask for the seller to ensure that any such documentation is left for you in the property at the date of entry. Further please note that the sellers do not usually warrant that the central heating or any other compliances comply with current British Safety Standard regulations nor will they warranty that the plumbing, gas and electrical systems conform to current regulations.  Therefore if you have any concerns regarding same we would recommend that you arrange for a tradesman to inspect the property immediately – certainly prior to concluding the missives.  Please do advise us if you wish to do this as the seller’s agreement would require to be sought. It is important to note that the seller does not warrant the condition of the actual dwellinghouse.  Further it is extremely important that you ensure your buildings insurance commences from the morning of the date of entry.

Legal Duties of the seller

The seller will be obligated to provide a valid and marketable title to the property.  It is often the case that the title deeds are not provided until after conclusion of the missives and therefore the missives will be conditional upon our receipt and reasonable satisfaction of same, and indeed your mortgage lender’s satisfaction thereof.  In the event that the title deeds are not to our reasonable satisfaction then we will be entitled to withdraw from the missives without penalty being due by you or the seller.  We will endeavour to have sight of the title deeds as soon as possible however please note that they are provided by the seller’s solicitors and therefore we cannot provide a timescale for receipt of same.

It will also be a condition of the concluded missives that the seller provides to us a Property Enquiry Report (this will disclose any planning permission, Building Warrants etc any Notices (i.e environmental, housing etc) which has been served by the Local Authority or other bodies as well as the status of the roads and footpaths i.e public or private), a Coal Authority Report (this will disclose any mine entries near the property as well as mine workings, whether past, present or possible future) although this is not required for all properties and a Legal Report (this will disclose all securities (otherwise known as mortgages or secured loans) granted over the property and whether any Court decrees have been granted against any titleholders.  We may ask for other reports from the seller’s solicitors throughout a transaction if it is deemed that these are required.   In the event that any of the reports disclose any entry which materially adversely affect the property then we will be entitled to withdraw from the missives within five days from receiving the unsatisfactory report.  The seller will not be entitled to seek any penalty from you in this respect and you will not be entitled to seek penalties from the seller.

Please note that the Legal Report will also disclose any Court decree granted against you.  Examples of the Court decrees which would prevent us from completing the purchase without the prior consent of the creditor are Letters of Inhibition, Trust Deeds, Sequestration etc.  Please note that the Legal Report may not be provided to us until the morning of the date of entry and therefore it is imperative that you advise us of any such Court decrees immediately to enable us to seek the approval of your creditor in time for the date of entry.

Your Mortgage

Once you receive your mortgage offer (and not the mortgage approval in principal) please do read over this carefully as mortgage lenders do occasionally get the figures wrong and it is best to ensure that they are correct before the mortgage funds are drawn down as they cannot be changed afterwards. You should ensure that your mortgage offer is issued and received by us no later than fourteen working days before the date of entry to avoid any delays in the date of entry as there is now an average ten day cooling off period for mortgages.  Further, it is because most mortgage lenders will seek a minimum period to release the mortgage funds (it varies from lender to lender but can be as many as seven working days). As well as acting on your behalf in the purchase we will also be acting for your mortgage lender in the creation of the mortgage and therefore occasionally we require reporting matters to them, for example, any gift deposit/incentives/discounts/cashbacks being offered to you by the sellers.  Therefore it is essential that you ensure that any such incentives etc will not affect the amount of loan you will be borrowing.  Further if any issues arise with the title deeds or reports received from the sellers then we may require to obtain your lenders consent prior to proceeding.

Signing of documentation

You will require signing a Standard Security in favour of your lender if you are obtaining a mortgage (as well as any other documentation the lender provides to us).  You will also require to sign a Land and Building Transaction Tax Form even if no LBTT (stamp duty) is payable.  With regards to the security, please note that this deed will give the lender the power to repossess the house without your consent if you fail to meet the mortgage payments or should you breach the mortgage conditions.  We cannot complete the purchase until we are in possession of the signed Security.  It is essential therefore that you are contactable so that the Security can be signed.  In the event that you will not be available prior to the date of entry then you must give us sufficient notice so that a possible alternative arrangement can be made.

Your Deposit and our Money Laundering Requirements

We will provide you with a Cash Account as soon as practicable.  This will incorporate our fees and outlays.  Please note that until we have the mortgage instructions from your lender we cannot confirm the exact amount of your deposit. We require requesting in due course a copy of the bank statement for the account(s) from which the funds are being remitted from showing the funds are available in the account(s).  If these funds are being sourced from a third party then please inform me immediately.  I shall exhibit a letter in due course about this but would advise at this stage that the bank statement must show the full deposit funds held in your bank account.  This statement must be dated within the past thirty days and show the full receipts and disbursements within your account for the past thirty daysThe statement should state your name and address.  Unfortunately if there has been any payments to your account within that period then we may require asking for further documentation/statements/clarification.  You can provide a screenshot of your online banking if this is more suitable, but again please ensure that this includes all receipts and disbursements for the past thirty days and includes your name and address.

If your deposit will be sourced from a third party (for example being gifted from a relative, or is held in the account of a third party on your behalf) then please inform me immediately as I shall require completing the same ID checks etc on that party as well as notify your mortgage lender in due course.  This also applies if your deposit is held in an account that is not in your name

Keys

Shortly before the date of entry the seller’s solicitor will advise us of an approximate time for the keys being released on the date and where they can be collected. There cannot be any guarantee that the keys will be available at a certain time on the date of entry, although they are usually available by lunchtime.  Please be aware however that there can be delays due to sellers having removal problems particularly if they are attempting to buy and sell on the same day.  If you are hiring a van or removal firm it is advisable to do so for the full day and not for a half day or for a  specific time given that the time you receive the keys cannot be guaranteed.

Land and Building Transaction Tax and Capital Gains Tax

If you will own any other property at the time of completion of this purchase then please inform us immediately.  We would explain that as from 1st April 2016 a government surcharge on the purchase of second and subsequent properties such as second homes and buy to let investments came into effect, even if they are owned in the sole name of a spouse or civil partner.  With some limited exceptions such transactions will attract an additional tax of 3% of the full purchase price and therefore if this is relevant to you we can provide you with the balance payable as this will require being paid upon completion of this purchase.  Failure to make payment of this tax may result in criminal charges. If this property is not intended to be your main residence then you should contact your Accountant in order to discuss the potential Capital Gains Tax implications which may be brought about when you decide to sell the property.

Solicitors, Estate Agents, Lenders etc.

It is appreciated that the purchasing of a home is a financial and emotional investment and all parties are usually keen to progress to completion as soon as possible.  It is worth bearing in mind though that often we are relying upon other parties (i.e solicitors, mortgage lenders, estate agents etc) to act timeously in providing correspondence/documentation etc and therefore whilst it may be frustrating at times, a reasonable amount of time should be afforded to other parties to deal with us.  We will always endeavour to act progress matters as quickly as we can on your behalf.  It is also important that you ensure you provide to us any requested information/documentation as soon as possible and ensure that the information provided is accurate and up to date.