What actually happens with raising & resolving enquiries can seem long, slow & confusing. So, here's a simplified guide to what they mean & what happens in order for the purchase of a property to go ahead!
Legal enquiries are the last phase of the conveyancing process, taken care of by the buyer’s solicitor before an exchange date is agreed.
To raise enquiries, a buyer's solicitor will need:
- Draft contracts from the seller’s solicitor
- Mortgage offer (from the buyer)
- Property searches (ordered by the buyer)
- Leasehold information pack - if it's a leasehold property (from the seller)
The buyer's solicitor will need to make sure the property being purchased is both mortgageable & sellable on the open market. To do this, they'll review all the above info & documents, looking for any potential issues or red flags.
Any issues or red flags can be raised by the buyer or buyer's solicitor and can be resolved by the seller and seller's solicitor. This entire part of the conveyancing process can cause delays depending on the property & the speed of the solicitors involved.
Different types of legal enquiries
- Checking the local authority searches to review any planning permissions, building control sign offs and rights of way
- Reviewing restrictive covenants
- Checking for any charges registered over the property title
- Reviewing the mortgage offer and checking for any requirements the lender may have
- Reviewing at the boiler maintenance and gas safety checks
- Checking the environmental report for any issues such as contamination
- Pinpointing restrictions within the title deeds, e.g. building development limitations
As you might have guessed, this means that the buyer's solicitor has given the green light. They'll present the buyer with 'the report on title'. This report shows all the information the solicitor has had to review, highlighting any issues found.
Along with the report (which can be sent via post or email) will be the legal documents that need signing to permit the exchange of contracts. A completion date will need to be agreed by the buyer & seller, only then can the contracts be exchanged & the sale becomes legally binding.
Annoyingly, there are often situations where the buyer's solicitor is unable to satisfy a legal enquiry. For example, if the seller completed building work which required building control sign-off and they failed to get it - that could be an issue. To resolve it, they'd have to arrange a retrospective building control sign-off.
Unresolved issues & enquiries can block the purchase happening because the buyer's lender is unlikely to approve the mortgage until all issues are resolved or an indemnity policy is created to protect the buyer from future liabilities.
Once enquiries are sorted, here's what the buyer must do to reach contracts exchange:
- Return signed contract to their solicitor
- Transfer deposit (usually 10% of the purchase price) to their solicitor the day before exchange (if they are selling & buying, the sale deposit is normally enough to fund the purchase deposit, but they should confirm that with their solicitor)
- Return their signed mortgage deed to their solicitor (not applicable for cash buyers)
- Return their signed transfer document (TR1)
- Show evidence of building insurance cover (from the point of exchange, it’s the buyer’s responsibility to insure freehold properties)
- Give their solicitor confirmation (verbal, written or via email) that they're happy to exchange
Then hey presto, you’re set for completion!