Buying a House in Scotland
Alan Livingstone explains what happens ‘under the bonnet’ when you engage Hastings Legal as solicitors to act for you when buying a house in Scotland.
OFFER OF PURCHASE
The missives are the starting point of your purchase and the contract between you and the seller for buying your house and are made up of formal letters passing between the two sets of solicitors. They normally comprise an offer by ourselves on your behalf identifying the property, the price and a date of entry, which is the date on which you will get the keys to your new home.
“If you are buying a house in Scotland you will need a Scottish solicitor. We are here for you.”Legal Lab
The style of offer which we use also refers to what we call the “Standard Clauses” which is a set of clauses designed to apply to most transactions and to bring to attention any oddities about the property at an early stage. When we submit an offer we will copy this to you along with a copy of the Standard Clauses.
Settling the finer points
We would then expect to receive a qualified acceptance from the seller’s solicitors. This may contain a number of qualifications to the offer.
We will discuss these with you and decide whether or not the qualifications are acceptable or whether we need to modify them. In fact, you can often have several letters going back and forward between the solicitors adjusting the terms of the missives.
The critical point is reached when one or the other of the two sets of solicitors says in the course of one of the missive letters “We now hold the bargain as concluded” or similar wording to that effect. At that point the full terms of the missives have been agreed and the deal has become final and binding on both parties. It is not binding until we get to that stage and until then either party can walk away from the transaction.
It does not often happen that a party walks away but there can be delays in tying up the missives while we wait on receiving an offer of loan from the lender or try to tie up the missives for the sale of your current house. We will do our best to conclude the missives as soon as we can but we will only do so once we know any concurrent sale is secure and that your funding is in place.
Once Missives have been concluded
The seller’s solicitors will send us title deeds to the property. We will check through the title deeds to make sure that that the title which you are going to get to the property is “valid and marketable” (i.e. good). We also check to make sure that any necessary rights of access or for drainage etc are in place.
We will also normally copy the relevant Land Certificate or main title deed to you for your information.
We check to ensure that all the appropriate local authority permissions exist for any alterations to the property. We then draw up the deed conveying the property to you, along with drafts of the forms required for submitting this deed to Register House and the necessary Stamp Duty Land Tax Return.
The seller’s solicitors will check our draft deed and forms and then return them to us and deal with any queries which we may have raised. We then send them the principal deed in your favour for signature by the seller.
The seller’s solicitors will exhibit to us a Property Enquiry Certificate for the property which details whether or not the property is connected to the usual mains services, whether there are any outstanding Building Warrants or Planning Applications affecting the property, whether the roadway is taken over and maintained by the Local Authority or affected by any Planning Notices or Listings.
If you are having a mortgage over the property
we will also have to draw up the appropriate deed for that (called a Standard Security) and have that signed and we need to send confirmation to the lender that the title to the property is safe for them to lend against and also asking for the loan funds for the date of entry.
We will send you a State for Settlement indicating how much money we require from you to settle the transaction, including our fees, Vat, Stamp Duty Land Tax and registration costs. We need to have cleared funds from you by the date of entry; this can be by cheque at least a week in advance to allow time for it to clear or by bank transfer the day before.
Please note that there is a daily limit to the amount you can transfer through internet banking.
The current Law Society guideline
for buying a house is that solicitors should settle most conveyancing transactions by cheque, rather than a telegraphic transfer of funds. Quite often we do not receive a client’s mortgage funds until the day of settlement. If we are relying on funds coming from a sale to fund a purchase, settlement by bank transfer is not easy.
The glitch in the system
Once a bank transfer is instructed all the bank guarantees is that the funds will hit the recipient’s account at some point during that day, i.e., at any time up until 5pm. However, if we are waiting on those funds arriving to then transfer out, there is a cut-off time for instructing transfers of about 3pm so the situation can arise where there is a need to transfer funds out before funds have come in and that is simply not possible.
Avoiding the glitch
If transactions are settled by cheque, although we may ask the other solicitors to hold as undelivered until we confirm that either we have received your loan funds or settled a sale transaction, then a telephone call can be made and the cashing of the cheque authorised. This avoids a potential delay of several hours in the banking system which can occur with telegraphic transfers.
In exchange for the price we will receive the signed deed transferring the property to you, the remainder of the other title papers for the property and you will get the keys!
We then submit the Stamp Duty Land Tax form and pay any tax due and send the deed transferring the title to Register House in Edinburgh to register the transfer of title. This may only take a few weeks. When an updated Land Certificate is issued we will copy this to you and either put the original in our fireproof safe for safekeeping or send it to your lender if they require.
This is only a brief synopsis of what we do for you when buying a house. No two transactions are the same, however, and we quite often have to deal with other issues that arise; but that’s what we are here for!
They say that moving home is one of life’s more stressful experiences. We hope that from a legal point of view we try to make buying a house as stress free as possible.”