Saturday 16 June 2012

How do I speed up the process of selling my home?

What can you do to sell your home fast once you have received an offer?

Dealing with the legal formalities involved in selling a house should be straightforward and relatively cheap.  The problem is that not many homeowners prepare for the sale sufficiently and unfortunately there are not too many agents around who are willing to help.

Here are my tips and ones guaranteed to speed up the process:

  • Get together for production all of the guarantees and warranties relating to work undertaken to the property.
  • If you have altered or extended the  property find the planning consents and building regulation documents.  This extends to boiler installation and electrical work. 
  • Remember the buyer will also be interested in seeing consents, approvals, completion certificates, guarantees in connection with work carried our before you became owners.   The solicitors who acted for you when you purchased the property may still be holding these. Check with them.
  • If you are not sure whether alteration and other works required planning consent and or building regulation approval check out this site  : www.planningportal.gov.uk/permission/
  • If you know planning consent and or building regulation approval was required but you are unable to find the paperwork contact the council and ask for copies to be sent to you.
  • Complete fully and quickly the property information and fitting and content forms handed to you by your solicitors.    You don’t have to wait to instruct a solicitor to fill these forms in.   You can find a specimen of the property information form here: www.lawsociety.org.uk/documents/.../ta6_formspecimen.pdf
  • The buyer will through your solicitors ask you questions about the property  - make sure that when your receive these questions you answer them quickly.
  •  If there is a mortgage and or loans secured on the property make sure you find out how much is outstanding by seeking up-to-date statements and pass these onto you solicitor.

Unless you are looking to tie in your sale with a purchase the sale should take only around 3 weeks to complete depending of course on whether the person buying your property is not selling and or arranging a mortgage!  Unfortunately in conveyancing you can only go as fast as the slowest person in the chain.

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

Saturday 2 June 2012

Don't buy leasehold property without reading this...

Buying a leasehold property is not as straightforward as you might think.    Nor is it cheap.   You need to make sure the selling agent specializes in this type of property, and you are given all relevant information so you can make an informed decision.  

Look out for the hidden costs. 

Most leasehold properties include common and or shared areas and responsibility along with the cost of maintaining these parts is shared between the tenants.   The expense is called a service charge and this can often be high and burdensome.   

Often responsibility for collecting the service charge rests with a commercial agent or Management Company.  Upon completion of your purchase the agent or Management Company will expect you to pay a fee for lodging notice of your new ownership as well as your mortgage.   They may also require you to enter into an agreement with them direct to make sure you take over responsibility for payment of the service charge.   They may require you to pay an additional fee for lodging this agreement.  You may also be required to acquire a shareholding in the management company for which a further fee might be payable.

The landlord may also be planning to undertake major works such as replacing the roof or external painting.   Sometimes there is money set aside for these extra works.  Often there is not.  If there is no reserve then you could find yourself having to make a contribution towards the cost of these works and this could mean having to pay out thousands of pounds.

Your solicitors will also be looking to charge you more for the work.   This is because there is far more work involved when checking the lease and other legal aspects.

Check the length of the lease and how much of the term of the lease is left to run.   If the remaining term is under or close to 80 years then you should consider carefully with the agent or your solicitor how much is will cost to extend the lease.   It becomes more expensive to extend a lease that is under 80 years.  Keep in mind your lender may not be prepared to lend to you if the remaining part of the lease is under a certain limit.

Beware of rent review clauses.  Plenty of leases contain oppressive review clauses that can result in substantial increases in the level of future rent.

In short make sure you seek expert advice from a solicitor who has experience in this area.

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

Thursday 17 May 2012

Three good reasons for not instructing a solicitor recommended by an estate agent

You might not know it, but you could be paying more for legal services when moving home because of the recommendation received form your estate agent.   The reason for this is that many estate agents have ‘arrangements’ with solicitors under which they receive what is known as a ‘referral fee’  or as it is often described, a ‘kick back’.

Many of the solicitors who operate in this way do not absorb the referral fee in their fee but add the fee on to the fee they quote you.  This means that you could very well be paying as much as £200 more for the service than you would have otherwise paid had you shopped around and gone to a conveyancing solicitor direct.

Is this legal?  Well at present yes providing the estate agent and solicitor tell you about the arrangement before you make the decision to instruct the solicitor.  The question is how many of those involved actually disclose the referral fee.  Sadly I do not believe it is many.

It also raises the question whether instructing a solicitor recommended by a ‘tied’ estate agent will ensure you receive the best service available.  My experience is that where such arrangements exist the solicitors instructed are normally part of some ‘factory’ operation and in the main the service levels of those firms is very poor.  This could mean you will find yourself having to constantly chase and inevitably the move will take longer.

Instructing an agent with a ‘pet’ solicitor may also impair the solicitor’s ability to offer independent advice. The agent will have a vested interest in the sale completing. Once an agent has agreed a sale, they will want it completed so they will put pressure on the connected solicitor to complete without regard to your best interests. If your solicitor discovers a problem and considers he should advise you to withdraw, will he be prepared to do so if the agents on whom he relies for work tell him not to?

My advice is not to rely on your agent’s recommendation.  Shop around, visit websites, read the reviews on the service offered and do not be tempted by deals offered by some agents to ‘wrap’ your legal fees in with the agent’s fee.  Perhaps even choose your solicitor before you put your house on the market because many solicitors like us know which are the 'good' and 'not so good' agents.    And before you ask, no we do not get a ‘kick back’ for recommending an agent!

Wednesday 2 May 2012

The fallacy behind mortgage fraud

Steps by some of the main lenders to push home owners down the route of only using certain solicitors has caused concern within the legal sector and has also led to increased expense for the consumer.  The main reason for this action seems to be the aim of the lender to reduce mortgage fraud.
Lenders take the view that by reducing the panel of solicitors undertaking mortgage work, and thereby monitoring those solicitors more closely, this will help to reduce the risk of mortgage fraud.
The suggestion is that sole cause of  fraud lies with solicitors who handle residential transactions.  I accept there have cases of fraud involving lawyers and other professionals and I also acknowledge that lawyers have access to large sums of money in handling this type of work.  The question is however can all of the incidents of fraud costing the industry over £1bn be attributed to the criminal activity of a small number of lawyers.  Is it also fair to use mortgage fraud as an excuse to restrict mortgage work to a limited amount of property lawyers at the expense of higher moving costs and a decline in conveyancing services?
In looking at these questions one must begin to understand from where the bulk of the fraud originates.  Surprisingly (or perhaps not), the majority of fraud stems not from crooked lawyers, but from individuals misrepresenting their personal circumstances. In fact over 90 per cent of attempted mortgage fraud in 201l was down to this failing.
Experian Identity & Fraud has revealed that fraudulent applications for mortgages increased by eight per cent in 2011, marking the fifth consecutive year in which the rate of mortgage fraud has increased.
Experian explain:
‘Around 34 in every 10,000 applications for mortgages were found to be fraudulent in 2011, compared to just 15 in every 10,000 in 2006. . Typically, these first party frauds involved falsifying employment status or financial information, and, most commonly, attempting to hide an adverse credit history’.
This would clearly suggest that, although I accept solicitors acting for lenders needs to be vetted and monitored, lenders should be doing more to stamp out the fraud which happens at the beginning of the process when the application is completed and often submitted by the applicant's independent financial adviser.

In a recent press release from the Council of Mortgage Lenders talk of a new scheme designed with this very aim in mind.  The CML explains:
 “….. the launch of a new mortgage verification scheme in September was the culmination of many months of carefully co-ordinated work we under took with HM.Under the scheme, lenders receiving mortgage applications that are not supported by adequate evidence of the declared income, or where fraud is suspected, can submit details via a secure link to HMRC. The tax authorities check the details that have been supplied to the lender against their own income tax and employment returns, helping to expose applications based on bogus claims about earnings or working history’.
The indicators are that some of these measures are working and as the CML reports mortgage fraud is now on the decline though I suspect that not much of this can actually be tied in with the rather inexplicable decision of lenders to arbitrarily restrict mortgage work to the exclusion of a large  number of honest and hardworking property lawyers.  

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

Wednesday 18 April 2012

Why moving home with a mortgage will cost more and take longer

Why do some mortgage companies insist you go to one solicitor for your mortgage and a different one for your purchase?

For many years one solicitor would act for both you and the lender because in the main your respective interests would be the similar.    You both wish to purchase a property without any adverse legal consequences.   This is known as a “joint representation” transaction.

The benefit of this is that providing your solicitor was on the lender’s general panel one overall fee would be charged.

However, some mortgage lenders in response to increasing concerns with levels of mortgage fraud and poor conveyancing practice have decided to limit the number of firms that can act on their behalf.

This “separate representation” approach means the lender will appoint a solicitor to act on their behalf and you are able to instruct your own solicitor.   Generally there is no restriction on which firm you choose providing they are on the lender’s general conveyancing panel.  

However there is one lender namely HSBC which has through charging extra legal fees made it very difficult for you to exercise a free choice.  

If you are involved in a transaction where you have two firms of solicitors acting this can often cause delay because your solicitor will not be able to exchange contracts on your behalf until the lender’s solicitor has confirmed approval.

The likelihood is that separate representation is likely to figure more in the future with the consequence of  adding extra expense and time to the  already slow and stressful process of moving home.  

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

Friday 13 April 2012

New energy rules for those selling and buying homes

The rules on the display of energy ratings (Energy Performance Certificates (EPC)) for homes have changed.

Those advertising property such as estate agents must now (as from the 6th April) :

  • Include the 1st page of the EPC for all sales and lettings properties in printed and electronic property particulars.

  • Have ordered an EPC prior to marketing and to produce  it within 7 days of marketing
If you are looking to market or let your property it is important for you to make sure your agent is complying with these requirements. 

Your agent must include a copy of the entire front page of the EPC document and not just the EPC graph as has currently been the case.  This includes any literature containing particulars of the property to be marketed including electronic communications such as emails.

Property particulars are defined as including at least two of the following elements:

  • a photograph of the building or any room in the building,
  • a floor plan of the building,
  • the size of the rooms in the building,
  • the measured area of the building, or,
  • the proposed rent in relation to a building being rented out,.
This may therefore (depending on how the new rules are interpreted) extend to the pictures and particulars of your home that appear in the agent’s window or in the local paper.  As for rentals the new rules seem must clearer and there seems no getting away from the requirement to display in any advertisement the front page of the EPC.

Almost all lettings adverts will include a property photo and the rental price, and thus it will be hard to avoid this.

The size of the EPC extract shown in the particulars must be sufficient for the details to be read – don’t allow the agent to print it very small nor to try and circumvent the rules by simply adding a link to the EPC.

Interestingly the first page of the EPC contains the full address of the property.   Agents do not normally like to display the full address in literature as this provides marketing opportunities for competitors.   Unfortunately there now seems no way around it and the address must remain within the published first page of the EPC.

What about properties appearing on agent’s websites?  Arguably as there is a picture of the property and often other particulars such as room sizes etc the first page of the EPC ought to be reproduced possibly in full rather than through clicking on a link.  

Rightmove it is reported recently emailed all of its agent clients and made the claim as quoted below:

"Rightmove is a property advertising website and the information displayed on Rightmove by all our member agents takes the form of property adverts and not property particulars. This is clearly stated at the bottom of every page on Rightmove that displays the details which have been provided to us by the agent about a specific property and will continue to do so.

It is our view that the new regulations do not place any additional obligations on Rightmove, although you may wish to consider separately how the new regulations might affect your own company website. We do, however, understand that some of our member agents may wish to display the EPC as part of the property advert on Rightmove. Rightmove does provide the functionality for you to do this if you so wish."

I do not necessarily agree that is correct; looking at the new rules and the elements that must exist for the publication of the EPC it is difficult to see how one can in this way distinguish ‘adverts’ from publication of property particulars.  Rightmove publishes pictures and particulars of property and this is no different from details published in newspapers or in an agent’s window.

Let’s not forget the purpose that lies behind the rules, and that is those looking for a property to buy should be able when searching to have immediate access to the energy rating for that property.

The problem is that as with the fated Home Information Pack some agents are reluctant to go to the expense of ordering and paying for an EPC until they know a buyer has been found for the property.  They view these requirements as an unnecessary hurdle to the marketing of the property.

My advice to those selling and renting is to always ensure that any agreement reached with an agent to sell or rent you home includes a clause that the agent orders and pays for the EPC. If you are buying always insist on seeing the EPC before viewing a property and if the EPC’s first page does not appear in the particulars of sale wherever these might appear always ask for an explanation.

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

Featured post

If it's not broken don't fix it