...The
Legal Process Continued
To
avoid delay, expense and uncertainty, it is far better to spell out what exactly
can be taken and what cannot. With the increase in Stamp Duty, especially at
the stepped rates, it is now common for the asking price to exclude “fixtures
and fittings” to avoid falling into the higher duty band. A separate contract
and price is then concluded for these excluded items, additional to the purchase
price of the property. Just be certain, at the very beginning, as to what is,
and what is not, included.
When all is agreed in principle, the seller‘s solicitor will prepare a draft
contract to send to the purchaser‘s solicitor for approval or suggested
amendments. This is because only the seller knows what title he can give; whether
freehold or leasehold and including any documents or events, such as the death
of the original owner and probate of the will vesting ownership in the seller
plus any encumbrances (easements) against the title, such as rights of way. The
best evidence of title is, of course, the title deeds or lease and these may
be handed to your conveyancer or, if the property is mortgaged, obtained from
the lending source. The last statement from your mortgage provider will be a
great help. If the title is registered, your conveyancer will need to know the
title number so s/he can obtain all the necessary information from the Land Registry.
At this stage, when the sale or purchase is still going through the initial preparatory
procedure, either side may withdraw without liability and can do so right up
until contracts are exchanged. Often, with rising prices and the inherent delay
built in to the system, “gazumping” may occur. This happens when the seller
accepts a higher offer than the one already agreed. Note that the seller has previously
agreed a sale verbally and then reneges on that agreement enticed by the higher
amount. The word “gazump” derives from the Yiddish word “to cheat”.
It does not mean that the seller is unable to cast around for the best bid; it
only occurs when he has already agreed to sell at a definite price, but “subject
to contract”. There is little that can be effectively done to stop the practice,
as the seller is legally entitled to proceed with the best offer. The purchaser
can, when the offer is accepted, ask the seller to agree, in writing, to treat
with him alone for a specific period, to allow the purchaser to conclude his
enquiries and exchange contracts. But the seller will rarely agree to disadvantage
himself, especially when the purchaser may still pull out with no liability whatsoever.
After receiving the draft contract from the “sellers” solicitor, the
“purchasers” conveyancer will send a long list of printed preliminary
enquiries in return covering virtually everything that needs to be known about
the property, including insurance, guarantees, disputes, any unusual charges
and, if not already agreed, whether the seller intends to remove those fixtures,
fittings, plants, aerial, burglar alarm, telephone, etc. He will also send off
an official search, with a printed list of further enquiries, to the local authority
to see, for example, if the property is subject to any local land charge or any
adverse entries; how drainage is connected, what building or other development
has been granted, proposed roads, compulsory purchase or mining activities past,
present or future.
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