Buying and selling a property in England or Wales should carry a “Health Warning”

The legal system used to convey a property from one person to another has not changed since 1925 and as it currently stands as a Seller or Buyer each time you enter a transaction you are running the risk of sustaining a financial loss.

In a world where the focus is on consumer protection there are no safeguards offering protection when a transaction breaks down before contracts of sale are exchanged.

If you are selling a property or buying a property either party in that transaction can, as the law currently stands, pull out of the sale/purchase at any time up to the exchange of the contract of sale.

This means that the seller who had accepted an offer by a buyer, who has instructed a Solicitor, and invested time and emotion into the progression of a transaction could after months of marketing the property, find that the buyer has, at the last moment, decided to pull out.

During that period it is probable that the property has come off the market meaning the seller has lost numerous opportunities to find a serious purchaser.  This could, in a market where in certain parts of the Country, falling prices are still, result in a loss to the seller.

The loss to a buyer is often a lot worse when a buyer puts an offer in, it is accepted, Solicitors are instructed, a survey is arranged, only to then find later in the process that that the seller has  decided to pull out of the transaction. The buyer has no recourse against the seller, the fees incurred up until that point, often ranging between £1,000.00 and £1,500.00, are lost. There may be exposure to additional loss, if as in certain parts of the country, house prices are increasing.

I often come across incidences such as this and I share a couple of my experiences:-

“I paid for a survey costing £500.00. It came back disclosing faults. I tried to re-negotiate the offer price but the seller did not want to know. I had to walk away without my £500.00 and without a house”.

“I paid £850.00 for a survey on a different house. It came back with clear findings. After several weeks of phoning the Agent and the Vendor asking for a Contract and other related documents I was informed that he seller simply changed his mind and did not want to sell. I was left having to meet the cost of the survey and Solicitors charges of £400.00”.

So what can you do to try and avoid having to meet the cost of an abortive transaction?

If you are a seller it is advisable to ask the selling agent to find out whether the buyer has a mortgage, whether the buyer needs to sell another property before the purchase can complete, and whether the buyer is willing to pay to lodge with the agent a deposit to enable the property to be taken off the market and the transaction to proceed to exchange within a set period of time. This latter arrangement is quite prevalent in areas where house prices are continuing to rise.

I have come across other transactions where the seller has said to the buyer that if the transaction does not complete within a certain period of time the price of the property will increase.

If you are a buyer it might be worth speaking with the selling agent to find out how long the property has been on the market, whether there has been any prior transactions and if there have to try and ascertain the reason for their collapse. The Agent may be reluctant to give this information but you should push for it. It is also advisable to find out whether the seller has a property to purchase since this might also delay the transaction and give greater scope for failure.

There is need for the current and archaic system to be re-formed.

Then use of deposits by both the seller and the purchaser would be a way of securing some degree of commitment to the transaction before major expense is incurred. Alternatively, perhaps the time has come to look at how the selling and buying process works in Scotland and adopting this as a model.

Finally on this subject I share with you an experience that I recently came across where a seller decided that he was not prepared to sell his property to my client because he lived at the property for many years and was not happy that my client was intending to let the property out rather than use it as a ‘home’. It is regrettable that the seller did not disclose this to my client before a survey was undertaken, legal costs incurred and we were on the verge of exchanging contracts of sale! 

 Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Read this before moving home

Moving house is ranked as one of the Top Ten most stressful experiences in life. 

Charlotte Ribbons, Trainee Solicitor with MJP Conveyancing  examines the ups and downs of moving home 

Moving house is ranked as one of the Top Ten most stressful experiences in life. Having moved house myself last weekend I can strongly agree that uprooting a life’s worth of possessions, daily debates with my partner over whether it is really necessary to take my childhood memoirs and having spent a week wading through boxes to find basic items I can vouch that a divorce may have been slightly less traumatic.

I believe the highlight of my day was loading my cherished super-king sized bed into the van, driving it all the way to our new home, spending a good hour manoeuvring it up and down the stairs in a vague attempt to make it fit, standing outside debating whether going through the window might work and then eventually with tears in my eyes admitting defeat, loading it back in the van and saying goodbye to it at the tip. I can safely say a little pre-planning may not have gone a miss.

So before picking up the key from the estate agent with the Cheshire Cat smile (which will remain on their face all the way to the bank!) you may want to digest the following.

Before moving day take the opportunity to have a spring clean. I can assure you, that beloved box of treasures which you cannot live without suddenly becomes less appealing when in your new home you realise there is simply no way one more box will fit in the cupboard.

At least one week before moving contact your gas, electricity, water, internet and telephone suppliers and make the necessary arrangements for your final account. Use this as your chance to shop around make the most of those cash-back deals your friends keep raving about.

Run down the freezer….yes this does mean it is totally acceptable to eat a whole tub of Ben & Jerry’s for breakfast, after all the Trade Associations advise against moving freezers in full or frozen state. Little tip, if you overlooked this getting a hair dryer on it will speed up the defrost time. Prop open the doors to avoid having to clean mould out later on, you do not want to add another cleaning job to the list.

Decide whether you need a professional moving firm or not. If you’re thinking of moving yourself, look into the costs involved. Several journeys over long distances can quickly add up, it may well be worth hiring the professionals. Not to mention saving your blood pressure hitting dangerous levels when your mirror slips out of your brother-in-law’s hands and smashes on the floor! Check with your home and contents insurer to see if you are covered during the move.

Your best-friend on this day will be the baby/dog sitter… tripping over the dog, hearing your child ask where the lego is for the tenth time and standing on Biro will have you crying blue murder.  If this is a luxury you cannot stretch to then make sure you keep some essential favourite toys at hand to set up a make shift playroom at the other end.

Hindsight has now taught me on my next move I shall pack a ‘survival kit’ consisting of tea bags, coffee, snacks, lightbulbs, screwdrivers, tape, hammer, cash, phone charger, toilet roll, chocolate and wine (believe me the last two are essential!).

Boxes - small ones for the heavy items, big ones for the lighter items. For pictures and mirrors select a box large enough to cover it, then instead of making the box up, keep it flat, seal one end with tape and slide the picture/mirror in and then seal the top. (Advice my brother-in-law did not follow!)

Before you rush off to your new home check your old property for any items left behind, and don’t forget outdoor plant pots. Take gas, water and electricity meter readings. This should be the first thing you do at your new house too. If your old property will not be re-inhabited turn off gas, electricity and water supplies as the mains. Check windows and doors are fastened securely.  

On arrival at your new home make sure all items, fixtures and fittings that were included in the sale are present and correct. If anything is missing contact your solicitor as soon as possible.

Get your mail redirected to your new address. Knocking on your on the door of your previous residence to ask for your NEXT catalogue is a little awkward. Also cancel deliveries of newspapers milk etc.

Before you snuggle down in front of the TV make sure you have notified TV Licensing of your new address as your TV license does not automatically transfer to your home. Risking prosecution and a fine of up to £1,000 is not the ideal moving in present.  (www.tvlicensing.co.uk)

It is a legal requirement to notify the DVLA of your new address. You will need to renew your driving licence and vehicle registration. Don’t forgot to update insurance providers, credit card, pensions, investments and loyalty cards. You will need to let your children’s schools know that you are moving. Do be aware that your children might have to change schools if you are moving out of the catchment area. 

This one maybe for the slightly over cautious but change the locks on your new home… you never know who might have a key!

Finally…take a deep breath, relax, and crack open the champagne. Believe me you will have earnt it!