Frequently Asked Questions

Prior to exchange of contract either party can withdraw from the transaction. Once contracts are exchanged both seller and buyer are legally committed. The buyer will usually pay a deposit to the seller’s solicitor on exchange of contracts (usually 10% of the purchase price). If the buyer then pulls out of the transaction the deposit could be forfeited.

A property chain is made up of the people involved in the buying and selling of properties. For example, if you are trying to buy a new home you will usually want to sell your old home first. So you are reliant on someone buying your property. The person buying your property is probably also reliant on selling theirs. The more people there are who are reliant on another person buying/selling their property, the longer the chain. Generally the shorter the chain the better but chains of 7 or more are not uncommon. Not all purchases involve a chain - buying a brand new house, buying at a discount from the local authority, or not having a property to sell yourself (first time buyers) are all ways of reducing/avoiding a chain.

Usually you will not receive the keys to your new property until the seller's solicitor has received all of the monies due. Often the transfer of money is done by Bank Telegraphic Transfer and therefore the timing of this is entirely down to the banks. However it would be fair to say that in the vast majority of cases the transfer of funds takes place within minutes rather than hours.

When couples split up, there are various options open. One option is for one partner to 'buy-out' the other partner's share. Another option is that the property can be sold outright and the proceeds divided appropriately. And a third option is that, if there are children, one party can be granted the rights to habitate at the property until, for example, the youngest child turns 18.

A Freehold title gives you complete ownership of the land and property. This makes the property more desirable and therefore worth more. A Leasehold title gives you the legal right to occupy the property for the duration of the lease. After expiry of the lease the right reverts to the freeholder. The leaseholder owns everything within the property whilst the freeholder owns the physical building and the land which it is built on.

In short, Gazumping is when a seller accepts a higher offer from a different buyer having already accepted your offer. You can be gazumped at any time until your contracts are actually exchanged. One way to avoid gazumping is to ask the seller to take the property off the market once they have agreed a sale.

Searches cover quite a few different things. A local authority search, which uncovers information about road ownership, building information and potential planning issues and applications specific to the property you are buying. An environmental search pertaining specifically to the environment surrounding your property - Subsidence, contaminated land, etc. Searches can also be done against the title of the property to discover if there are any outstanding charges against it and a search can be undertaken to see if the seller is bankrupt or not. Usually a Water and Drainage search is made with the local Water Authority to make sure the property you are buying is connected to the Mains Water Supply and Sewage systems.

A Contract is a written agreement between the buyer and seller. Usually the Seller’s solicitor will draw up the contract with one copy being produced for the seller and one for the buyer. The Contract is a legally binding document.

As of the 3rd of September 2008, the following is a list of the current stamp duty bands:

• 0% - purchase price up to £175,000 (until 31 December 2009 inclusive)
• 1% - purchase price of £175,001 - £250000
• 2% - purchase price of £250,001 - £500000
• 3% - purchase price over £500000

'Sold subject to contract' (STC) means that the seller has accepted an offer but the paperwork has not been completed. This does not necessarily mean that the property is unavailable, and sometimes it might be worth asking the estate agent exactly what stage the negotiations are at, as there is no legal obligation on buyer or seller to complete the sale until contracts have been exchanged.

A flying freehold applies when part of the building in a freehold ownership is above another part of the same building which is in a different freehold ownership. The flying element does not need to be in the air, it can be over someone else’s freehold or over a communal area such as a passageway.

The reason why flying freehold’s concern solicitors is that one property owner cannot enforce obligations on their neighbour to keep their building in good repair. If they do not keep their own building in disrepair this can affect the structure of the flying freehold property and the flying freehold owner could not bring action to compel them to repair their own building.

Picture a flying freehold over an alleyway that adjoins the neighbouring property on first floor level only with an alleyway underneath. A Victorian terrace is a good example. If the neighbouring property wanted to they could demolish their own property which would mean the other property (that had the flying freehold) would collapse. One would hope that in reality neighbours would look after their own properties but the problems are real nonetheless.

The problem however often comes to light on the sale of the property when the lawyers roll up their sleeves and discover the legal difficulties. Some mortgage lenders will not lend at all on a flying freehold whatsoever. Some of them will providing only a small part of the property is “flying”. The problem will be if you have waited for some months to find a buyer only to be disappointed if the lender that your buyer has chosen refuses to grant a mortgage over the property because of the flying freehold.

It is possible to obtain indemnity insurance which some lenders will accept which would normally be paid for by the seller. The indemnity insurance will go some way to financially compensating you for any loss caused directly by the flying freehold but it will not remove the defect and would not of course diminish the stress caused by a dispute with your neighbour over the flying freehold or the fact that the property will still be defective even if insurance is in place.

Alternatively the deeds can be amended to accurately reflect the position but this needs careful deliberation.

You should discuss with your surveyor the potential affect this will have regarding the future saleability of the property in the future

As your solicitor I can give you all the information for you to be able to make an informed decision as to how you wish to proceed