Jameson & Mackay Solicitors Perthshire, Scotland

Legal Services | Selling Your House

Selling Your House

A guide to the legal process - from finding a buyer to handing over the keys.

Searches, land registration, mortgage redemption, P16s, closing dates, offers, warranties, missives, insurance, property certificates ............ and no latin!

What follows is a brief guide to the main legal elements involved in selling a domestic property. Obviously as such it cannot cover all the things that might arise, but we hope it will be useful in understanding the steps involved.

The marketing or estate agency side of the transaction is covered in our section on Selling your property.

Searches, land registration, mortgage redemption, P16s, closing dates, offers, warranties, missives, insurance, property certificates ............ and no latin!

The marketing or estate agency side of the transaction is covered in our section on Selling your property.

Closing dates

If more than one party wants to offer for your house a closing date will often be set. This means that all interested parties will be invited to submit their offer at a set time (usually 12.00 noon) on a set day. Even if an offer has been made previously the details of any such offers or prior discussions will not be divulged by us to another person. Each person offering therefore should have no inside knowledge about what any other person may be intending to bid. Just because a closing date is fixed it does not follow that one of the offers must be accepted.

Similarly there is no obligation to accept the highest price; any or none of the offers may be accepted. However, a closing date generally produces the best offer available at the time and in the vast majority of cases the highest offer is accepted. If none of the offers is accepted at the closing date The Law Society lays down strict guidelines as to how matters should then proceed.

The offer

Most offers these days are several pages long. A number of clauses are of a purely technical nature and may not require to be discussed in great detail with you. Some practical points are, however, common to most transactions.

Moveables - Care has to be taken to ensure that the offer does not include any moveable items which you are intending to remove.

Repairs - If you have instructed any repairs to the property which are not completed, or are completed but not paid for, then you will remain responsible for these. It may be appropriate to refer to these in the acceptance.

Local Authority Notices - If the local authority has served any notices on the property for repairs or the like then again these will generally remain your responsibility and should be referred to in the acceptance.

Warranties - Most offers will require you to warrant that the central heating and other appliances, and in some cases the whole electrical, gas or plumbing systems, will be in good working order at settlement. If you are aware of any problems with any of these you should let us know.

Alterations - A warranty is also usually sought to the effect that all alterations to the property have the necessary local authority consents and any consents needed under the title deeds; we would be expected to produce these. The local authority consents needed would be building warrant and completion certificate, and sometimes planning consent. The title deeds sometimes provide for further consents being needed. If there are alterations to the property it is best for us to know as soon as possible to enable us to check the documentation. If alterations have been carried out without local authority consent this can generally be resolved by applying for either a retrospective building warrant or a "Letter of Comfort".

The Acceptance

In almost all cases the acceptance issued will be a qualified acceptance. This means the acceptance will contain some additional conditions to be incorporated into the contract. The bargain is not concluded, and is therefore not binding, until there are no further qualifications from either side and the last set of qualifications has been accepted in writing. Up to that point either party can withdraw from the deal without penalty. The letters forming the contract are also referred to as the missives.

Until recently letters forming the contract had to comply with certain rules to be valid. Recent changes in the law now mean that any signed letter can form part of the contract. You should be careful therefore not to commit any prior discussions in writing to either the buyer or the buyer's agents as that could end up being accepted and forming the basis of the contract.

The Matrimonial Homes (Family Protection) (Scotland) Act

This Act provides that even if the title to a matrimonial home is in the name of one spouse only, the property cannot be sold without the consent of the other spouse. Single people have to sign an affidavit confirming the house is not a matrimonial home.

What happens next?

Under the Scottish system the aim is to tie up the deal as soon as possible so that it is binding on each party. The contract is concluded subject to various items being completed to each side's satisfaction.

Once the bargain is concluded much of the subsequent work involved in the transaction will be carried out between the buyers solicitors and ourselves - indeed if the transaction proceeds smoothly there can often be little of substance to report until nearer the settlement date. Although many problems can arise the main points on which we must satisfy the purchaser are:-

Title

Before settlement we must exhibit your title to the buyer's solicitor and deal with any queries which may arise. We also approve the draft deed to be granted to the buyer (the disposition) and arrange to have the disposition and any other relevant documents signed by you.

Property enquiry certificate

This also has to be obtained by us and exhibited to the buyer's solicitor. This certificate is issued by the local authority and confirms whether there are any notices affecting the property, whether there are mains services and various other related matters.

Searches

The searches over the property have to be continued under instructions agreed with the buyer's solicitor. The searches confirm whether there are any impediments to the sale.

The Land Register and P16 Reports

This report will be instructed at the earliest possible stage. Title deeds are now registered in The Land Register, a change introduced in Perthshire and a number of other counties in 1999. Following this change the purchaser will now receive a Land Certificate once the title is registered. The Land Certificate is based on the current Ordnance Survey map and is a title which is guaranteed by the State. However, it is necessary to ensure that the boundaries as shown in the existing title deeds match the Ordnance Survey map. This is done by the seller by instructing a P16 report, sometimes referred to as a property definition report. This report will disclose any discrepancies between the boundaries as shown in the title and the OS map. In some circumstances where discrepancies do occur it may be necessary to obtain a corrective deed from a neighbour to resolve matters.

The Mortgage

On completion of the sale the existing mortgage has to be paid off. We will obtain a redemption figure from your lender and redeem the loan from the sale proceeds. Often we will not get a redemption figure until after the contract has been concluded and you are committed to the deal. If you think there may not be sufficient funds from the sale price to pay off the loan you should alert us as soon as possible as the transaction cannot settle unless we can pay off the loan in full. If it is an endowment loan any life policies held by your lender will be released to you after the loan is repaid. Sometimes this will be attended to by us. Sometimes the lender will deal with this direct. Some lenders no longer hold life policies at all.

Insurance

The buildings insurance cover should generally be continued until the sale is completed. If the buildings insurance was arranged through the lender then the lender will cancel the insurance once the mortgage is paid off. If you do not have a mortage you should remember to cancel the buildings insurance from the settlement date. Depending on the payment arrangements there may be a refund due to you of part of the premium.

Settlement

On the date of entry the purchaser has to pay over the agreed price in exchange for the title documents and the keys. There is no time (unless specified by the contract) by which this must be done but in most cases the purchaser will wish to settle by Mid-day. It is helpful if you can let us know as soon as possible when you will be able to hand in the keys to us. To save time on the actual settlement date you may wish to hand in one set of keys to us a day or so early and then leave the rest of the keys in the house when you move out. If there are any problems which are likely to delay settlement you will have been made aware of this in advance. On the day of settlement any mortgage will be repaid and we will advise the Council tax authority of the change of owners. Where there are sufficient funds to do so we will deduct our fees and outlays and then promptly remit the balance to you.