1. Title deeds.
2. Local Authority Search
3. About New Leases
4. About the Purchaser
5. Payslip
6. Preliminary Enquiries
7. Fixtures & Fittings List
8. Mortgage
9. Survey
10. Exchanging Contracts
11. The Deposit
12. Completion Date
13. Form TR1
14. Land Registry fees
15. Stamp Duty
16. Notes on Stamp Duty Land Tax
17. SDLT1 Form
18. Due Diligence
credits

1. Title deeds.
These are nowadays nearly always a computerized record of the property retained at the Land Registry and for a freehold property it is usually only the Land Registry document that is required. Until recently there was what was known as a Land Certificate or a Charge Certificate. Since December 2003 these are no longer required. For leasehold properties, however, the possession of the original Lease is vital and you should investigate its whereabouts and if you have the Lease you should keep it safely.
top

2. Local Authority Search
Your solicitor will apply to the local council for what is known as a local authority search, which answers basic questions about the property and warns you if your particular property is going to be affected by major works, such as new roads, or if the property is subject to planning consent. However, be warned. It will not tell you that there are to be developments to the property next door, or behind and you may be advised to further investigate this possibility. [SWP to add his standard warning about local searches i.e. motorways etc
top

3. About New Leases
THIS IS COMPLEX AND WE WILL COMPLETE WHEN REQUIRED
· Box 31 – NLPG UPRN
This is the National Land and Property Gazette Unique Property Reference Number. Please enter it if you know it, IGNORE BOX if you do not
· Box 33 – Is a plan attached?
No plan is needed where there is a full address for the property.
top

4 – About the Purchaser
· Purchaser (1) will not be responsible for anything more than any other purchasers It simply means the first named purchaser on the transfer document.
· Box 50 – National Insurance Number, if you have one.
This is now required. Only the Client will have this. If the purchaser is employed the number can be found on the latest payslip. The Revenue realise that not everyone will have one.
· Box 59 – “I authorise my agent to handle correspondence on my behalf”
In almost all cases this Box will be completed. The return has to be signed by ALL CLIENTS but Solicitors acting on their behalf will complete most of the return and will deal with queries and will receive the Certificate of Payment SO THE CLIENT MUST SIGN the completed return. As Purchasers and Lenders will want and expect Solicitors to deal with issues arising from the Return, without the Agent Authority Box completed the Revenue cannot send copies of correspondence to Solicitors
· Box 71 – Declaration
As stated above, the return must be signed by the purchasers.
top

5. PAYSLIP
N.B.1 We will lodge the return with the Revenue
N.B.2 We must have a completed SDLT1 by the Completion Date. We must send it to the Revenue within 28 days, must get the certificate back and lodge the Revenue Certificate with the TR1 within the H.M.L.R priority period. The best idea seems to be to get the SDLT1 completed with the Mortgage Deed and keep the two together ready for completion.
N.B.3 Each SDLT1 Form is UNIQUE as it carries a Tax Code Number attributable to ONLY A SINGLE TRANSACTION. We must use ORIGINALS . COPIES CANNOT BE USED.
top

6. Preliminary Enquiries
These can be handled in one of the number of standard forms. These are effectively a Question and Answer format, which must be answered truthfully by all parties. Misleading and untruthful answers can prove to be very expensive as there have been a number of cases where Sellers glossed over problems with neighbours or problems with rights of way which are inevitably discovered after the purchase has been completed and expensive claims have been made against the Seller for being less than accurate in providing information about the house or flat that is being sold.
top

7. Fixtures & Fittings List
This is a printed form list in which you will be invited to list all items that you are taking, those which you are leaving and those which you might be willing to sell if the Buyer were willing to pay towards them.

top

8. Mortgage
Most people borrow money from a bank or building society to help them buy their house. This is usually quite a substantial sum and the mortgage will be registered against the title of the property. If there are persons over the age of 18 years including your children living at the property who are not owners, they will need to sign a form of consent to the mortgage. They may need independent solicitors advice before they sign this form. They will need to sign that form before the mortgage is taken up by your Solicitor. You will also need to sign the mortgage deed, preferably in your Solicitor’s presence so that the terms of the mortgage can be explained to you and you understand the obligations that you are accepting by taking the mortgage.
top

9. Survey
This is usually carried out by a surveyor who you have instructed. Your bank or mortgage lender will carry out a valuation on their behalf to ensure that they are getting a property which equates to the value of the loan. However, this provides you with no information or security. If you are buying a property you are advised to obtain your own survey. Most lenders will provide, at your expense, either a valuation survey which really is for their benefit, or a full survey, at a higher cost, which is your survey. We urge you to have a full survey. This serves three purposes:

(a) It will tell you if there are any defects in the building which you should know about.
(b) It gives you ammunition to negotiate price if there were hidden defects that you could not have seen when you first made your offer of purchase.
(c) If there are hidden defects which have been spotted by your surveyor but which you could not have known about then since you are entitled to rely upon your surveyor=s expertise in preparing a survey you might have a negligence claim if such defects should appear and prove to be expensive.
top

10. Exchanging Contracts
In the last century when the parties agreed to be bound to buy or sell a property the solicitors would meet and literally pass over a desk an agreement that each client had signed so that they, at that time, exchanged contracts and handed over the deposit. Nowadays, sadly, the two Solicitors almost never meet. Exchange of contracts is effected by telephone and each solicitor promises to deliver to the other the contract which his client has signed and the Buyer's Solicitor also promises to deliver the deposit to the Seller's Solicitor.
top

11. The Deposit
Usually 10% of the purchase price, which will be held by your solicitor in a stakeholder client account, and it can be used by you in the purchase of another property at the same time as payment of, or part payment of, your deposit. If your seller agrees to accept a deposit of less than 10% you must be warned that if you fail to complete the contract will contain an obligation for you to pay the full 10% which will be recoverable from you by legal action if, having failed to complete, you have not paid a full 10% deposit. The Contract will also provide for the Seller to be able to make other claims against you in the event of your delaying completion or failing to complete. The Seller will be entitled to be compensated for expenses and losses that the Seller has suffered if you have not fulfilled your obligation under the Contract.
top

13. Form TR1
This is the form that you will be asked to sign which, when selling, transfers the property to your Buyer and when buying transfers the property to you. The TR1 must always be signed by a Seller but frequently must also be signed by a Buyer when the Buyer is giving assurances to the Seller that the Buyer will in future fulfill the obligations imposed by the ownership of the property.
top

14. Land Registry fees
These are fees on a standard scale, which are charged by the Land Registry for registering your title in its computerised records of all properties registered in the UK.

top

15. Stamp Duty
Now known as Stamp Duty Land Tax. "SDLT"
This is now a major factor that you must take into account when you buy a property. Stamp duty is the most expensive element of house purchasing over and above the purchase price. The stamp duty scales at the present time are:
,0 - ,60,000:- 0%
,60,001 to ,250,000:- 1%
,250,001 to ,500,000:- 3%
Above ,500,000:- 4%
You will need to pay stamp duty to your solicitor before completion as your solicitor if acting on behalf of a mortgage lender must be able to guarantee that stamp duty will be paid because without the payment of stamp duty the property cannot be registered.

top

16. Notes on Stamp Duty Land Tax (“SDLT”): CLIENT MEMO
1. SDLT is a new tax effective from December 1st 2003 to replace Stamp Duty and is chargeable on all transactions for Sale of Land.

2. In theory the Tax Return SDLT 1 it is to be completed by The Client (the Tax Payer) who MUST SIGN a Declaration like any other Tax return. In practice we as Solicitors must complete most of it. WHY? Because we are answerable to Mortgage Lenders and we have a duty to ensure Registration of Title and cannot be left with a situation where the Return is not completed, the Tax not paid, the Tax Paid Certificate is not returned by the Revenue and we cannot register your title and the Mortgage.

3. Here are some practical points about completion of the return.

1. The boxes must be completed in black ink in capital letters.
2. If a box doesn’t apply leave it blank. Do not strike through or put N/A.
3. Do not write outside the boxes – there is no ‘white space’.
4. A separate return must be completed in respect of each separate transaction.

IN THE FORM WE OR THE CLIENT NEED TO COMPLETE THE FOLLOWING INFORMATION

1 – About the transaction
· Box 2 – Description of transaction
This is identified by a series of Codes which we will complete.
· Box 4 – Effective Date
Almost certainly The Date of Completion as shown on the TR1

2 - About the tax calculation
· Box 9 – Tax Relief ???
Not much used by us mainly the Designated Disadvantaged Area Relief
· Box 10 – What is the total consideration?
For a straightforward property purchase, just the full purchase price. .
· Box 12 – What form does the consideration take?
Normally cash.
· Box 13 – Is this transaction linked to any other(s)?
Usually NOT
Total amount of tax due?
The rates of tax are just as they were for stamp duty i.e. 0% (-£60K), 1% (£60K-£250K), 3% (£250K-£500K) or 4% (£500K+).

3. About New Leases
THIS IS COMPLEX AND WE WILL COMPLETE WHEN REQUIRED

4. Miscellaneous
· Box 31 – NLPG UPRN
This is the National Land and Property Gazette Unique Property Reference Number. Please enter it if you know it, IGNORE BOX if you do not
· Box 33 – Is a plan attached?
No plan is needed where there is a full address for the property.
top

17. SDLT1 Form
This is a new form imposed by the Land Registry. Before December 2003 your solicitor prepared a short form, which was lodged at the Inland Revenue and recorded the address of the property and its value for stamp duty purposes. Since 2003 a form must now be lodged comprising 71 questions, which is effectively a tax return. Furthermore it must be signed by you, the Buyer. It cannot be signed by your solicitor save where you have given a formal Power of Attorney to your solicitor to sign all other documents. At WPFggs we will assist you in completing the bulk of the form but it must be completed by you, signed and returned by us promptly as the form and stamp duty payable must reach the Inland Revenue within 28 days of completion otherwise penalties and interest are charged. [see above]
top

18. Due Diligence
Until recently the relationship between the solicitor and client was a pleasant and informal one. Since the introduction of the government's money laundering regulations, whilst Solicitors hope it will still be pleasant, it has to be more formal and we, as solicitors, have to keep on our file, for a minimum of 5 years, evidence of your identity comprising a photocopy of the photo page of your passport having seen the original and a recent form of evidence of your name and address such as a domestic or mobile telephone bill.
top

Partner Jonathan Gerber LL.B and consultant Martin Farmer LL.B are also property law specialists, with a particular expertise in commercial property and bank mortgage work.

see also housing law