OVERVIEW OF CONVEYANCING PROCEDURE IN ENGLAND AND WALES

There are many processes in a conveyancing transaction but there are two fundamental stages where legal entity changes.  These are (i) exchange of contracts and (ii) completion.

When an exchange of contracts occurs, that is the point when the buyer becomes legally bound to buy the property and the seller becomes legally bound to sell it on the completion date set out in the contract.  Where the property is new property, the Seller (Developer) also becomes legally bound to build a property to a certain specification.  In most contracts, the completion date is a fixed date.  With new property, the completion date occurs when notice of practical completion is served by the developer’s solicitors stating that the property has been built.  The legal completion date is usually then 10 working days after that notice.

Before exchange of contracts, the Buyer's solicitor carries out a due diligence process consisting of checking the title, the searches, the draft contract and the client's mortgage offer.  The Buyer's solicitors then raise preliminary enquiries with the Sellers solicitors and later check the answers when they are received.  The Seller's solicitor must do whatever he can to answer any enquiries and take any other measure necessary to satisfy the Buyer's solicitors that the title is marketable and safe.

Before buyer's solicitors begin the process of exchange of contracts, the following must be in place:

• they must have received copies of the title documents and they are satisfactory
• they must have received the results of pre contract searches and they are satisfactory
• they must have received a copy of your mortgage offer and the terms of it are satisfactory.  An exception to this is when a buyer is buying a new property from a developer where the completion date is a long way off (see below)
• they must have received a draft contract and the terms of it must be satisfactory

Some of the information in those bullet points may be satisfied by the documents produced with the Home Information Pack.  Exchange of contracts may very well be very swift after the price negotiation if the buyer does not need a mortgage offer. 

Between exchange of contracts and completion, both sides prepare for completion.  This is as follows

• The Buyer drafts the purchase deed which he sends to the Seller's solicitor for approval.  Where acting for a lender he prepares the mortgage deed.
• The Buyer sends requisitions on title to the Seller's solicitor which the Seller's solicitor then answers
• Final searches are carried out.  Usually, this is just a land registry search and a bankruptcy search
• Where the Buyer's solicitor acts for a lender, he makes a report on title to the lender and a request for funds.
• The Buyer's solicitor prepares a statement of account for his client
• The Seller's solicitor obtains a redemption statement of the existing mortgage on the property (if applicable)
• Deeds drawn up and approved are signed
• The Buyer's solicitor receives money from his client (and where applicable mortgage money from the lender)

Completion is the actual buy-and-sell transaction.  On the completion date, the buyer’s solicitors hand over an amount which is usually equal to the price minus any deposit already paid.  At the same time, the Seller releases possession of the property and the deeds to the Buyer.

Following completion, the Seller discharges the existing mortgage and pays the Estate Agent's commission.  He then accounts to his client for the net sale proceeds.  The buyer's solicitor files the stamp duty land tax return and follows that with registration at the land registry.  After registration, the Buyer's solicitor reports to his client or (if there is a mortgage) to the Lenders and sends to them the appropriate documents.

Related topics

Our job when acting for a buyer (England and Wales)
Our job when acting for a Seller (England and Wales)