Conveyancing
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Conveyancing is the act of transferring the ownership of a property from one person to another. The buyer needs to ensure that he or she gets good 'title' to the land; i.e., that the person selling the house actually has the right to sell it. The system of conveyancing is designed to ensure that the buyer gets the land together with all the rights that go with it, and knows about any restrictions in advance.
A typical conveyancing transaction, whether a sale or purchase, contains two major 'landmarks', which are exchange of contracts and completion, plus the three stages: before contract, before completion and after completion.
United Kingdom
In England and Wales this is usually done by a solicitor or a licensed conveyancer. It is also possible for someone to do their own conveyancing to save on costs. Under English law agreements are not legally binding until contracts are exchanged. The normal practice is for the buyer to negotiate an agreed price with the seller then organise a survey and have the solicitor (or conveyancer) carry out their searches and prepare the contract. It takes on average 10-12 weeks to get the deeds to the property, and during this period either party can pull out at any time. This gives rise to a risk of gazumping.
The position in Scotland under Scots law is that an offer for property purchase is legally binding. This results in a system of conveyancing where buyers get their survey done before making a bid through their solicitor to the seller's solicitor. Sellers normally set a closing date for offers, then provide written acceptance of the best bid. The buyer's solicitor then carries out searches and prepares the contract, and while adjustments can be negotiated for unanticipated findings, both parties are bound by acceptance of the offer. This makes the problem of gazumping a rarity. The disadvantage for the buyer is that is that they have to bear the cost of the survey for unsuccessful bids, and trials have been made of a system where the seller arranges for one survey available to all bidders, but the quicker progress to a binding agreement can considerably reduce stress.
United States
The conveyancing process in the United States varies from state to state depending on local legal requirements and historical practice. In most situations, three attorneys will be involved in the process: one each to represent the buyer, seller, and mortgage holder; frequently all three will sit around a table with the buyer and seller and literally "pass papers" to effect the transaction. (Some states do not require all parties to be present simultaneously.) In order to protect themselves from defects in the title, buyers will frequently purchase title insurance at this time. In most states, a prospective buyer's offer to purchase is made in the form of a written contract and bound with a deposit on the purchase price; the offer will set out conditions (such as appraisal, title clearance, inspection, and financing) under which the buyer may withdraw the offer without forfeiting the deposit.
External link
- Council for Licensed Conveyancers (UK) (http://www.conveyancer.org.uk/)
- E-Conveyancing (UK) (http://www.landreg.gov.uk/e-conveyancing/)
- National Land Information Service (UK) (http://www.nlis.org.uk/)
- DIY Conveyancing (UK) (http://www.conveyancing-uk.com/)