New Year Sales

Following hard on the heels of Christmas, Neeru Sembi, Partner at Gawor & Co Solicitors gives you ten helpful tips to assist if you decide to put your property up for sale in the New Year.

1. Finding a Buyer – Once you have found a buyer, try and stay in contact with them directly. You may wish to exchange telephone numbers and/or email addresses. No matter how good the intentions are of your Estate Agents, and indeed your Solicitor, you may feel that you do not have any control of your own sale. Your Solicitor cannot speak directly to your Buyer but only communicate via their solicitor or your own estate agent and therefore a simple direct call to your buyer can clear away any confusion and deal with non-legal matters swiftly.

2. Is your property leasehold? – If so, where is your lease? Now that deeds have “dematerialised”, the Bank that you have a mortgage with may not retain your deeds, which means that either your deeds were sent directly to you following your purchase or the solicitors that acted for you when you bought your home should have them. In addition if your property is leasehold, you may also need to locate documents such as a share certificate in the freehold or management company, NHBC insurance papers, and any guarantees or warranties that may have been transferred to you when you originally bought. Your Seller will need all of these documents as well a “sales pack” or “management pack” from the managing agents for which the agents will charge you a fee.

3. Have you carried out any alterations to your flat? – This could be anything from moving an internal door or non-structural wall, converting additional loft storage space to installing wooden floors. Anything like this may very well need the freeholders or the management company’s consent and possibly planning permission and/or building regulations approval from the local council, especially if the property is listed. If you haven’t got your consent already or are unsure as to whether or not it is required, it is best to advise your Solicitors at the outset. That way, they can advise upon the appropriate steps to regularise the position rather than wait for the purchasers solicitor to pick this up from his/her client’s survey and examination of the title documents at which point the transaction is likely to be advanced, and any retrospective consent is likely to take time, add costs and delay your sale.

4. Mortgages – Apply for an up to date redemption statement from your mortgage company and familiarise yourself with any early repayment penalties and their expiry dates. Your solicitor will of course obtain one of these for you just before you exchange on your sale, but mortgage redemption departments are not renowned for their efficacy and if you request one at the outset this can be passed to your solicitor who will have your full account details to contact them to ensure they can act on the bank’s behalf in the sale, and request any deeds that they may still have.

5. Fixtures – Take care when completing your fixtures and contents form. Most arguments that arise during and after a sale are not technical or legal but revolve around what people have or haven’t left behind. Ensure both you and your buyer have agreed this form well before exchange of contracts.

6. Installations – Have you had new windows, central heating or electrics installed recently? If so, legislation dictates that you should have certificates for all of these, which will be transferred to the new owner on completion of a sale. Again, to save any unnecessary delays, you should ensure that the originals of all of these certificates and other such documentation that relates to modernising your property is passed to your solicitors at the outset.

7. Instructions – Be careful who you use to do your conveyancing. The term “lawyer” is a generic term, which can cover not only solicitors, but also licensed conveyancers and non-qualified paralegals. If you feel more comfortable knowing that a Solicitor will be dealing with your sale, double check that firm’s website carefully before going ahead with the instruction and make sure that the firm is registered with the Solicitors Regulation Authority and has the CQS accreditation.

8. Fees – When comparing quotes from law firms, look for the hidden costs. Some firms may quote substantially lower than others at the outset in order to secure you as a Client. However, further costs are then added on during the transaction as a matter of course, for dealing with standard unavoidable pre-contract steps to include for example, writing to your management company for service charge information to actually seeing you in their office for a meeting. If you obtain a low quote at the outset there is usually a reason for it. Also consider the location of the practice. Is the firm located near the property that you are selling? If so, the Solicitor may be familiar with the particulars of the development, have good relations with the agents and any third parties that will need to be contacted during the transaction, all of which will help to expedite your sale.

9. Completion – The day of completion itself can be stressful enough as it is. Therefore, you should make sure that you are totally packed and ready to leave, at least the day before your sale completes. Contractually, you will usually be obliged to hand over keys by midday. This may sound obvious but if I had a pound for every completion held up due to last minute packing problems with bored removal men sitting outside watching their charges go up by the hour I would be a wealthy man.

10. Please be nice to your Solicitor – It might not seem like it at all times, but we love our Clients really.

Happy New Year

Fixtures or Fittings – What is the difference ?

It is often the “non” legal matters that can cause the biggest delays and upset in the conveyancing process. The Buyers and Sellers of a property cannot agree on what should and should not be included in the purchase price and on what basis offers to buy the property were made and exchange of contracts is consequently delayed whilst the wrangling over fridge freezers and the like is resolved. Worse still, on the day of completion the purchasers move in only to discover items that they thought were being taken have been left behind (often because of the pure difficulty of removal) or vice versa.

When viewing a property it is not always clear what it is to be included and often the first time the matter is addressed is when the fixtures and fittings form completed by the Sellers is supplied as part of the conveyancing process. By this time most people are focusing on kitchen appliances and the bigger picture generally and inclusion of other items can be overlooked. It is only then that the importance of the distinction between a “fixture” and a “fitting” becomes apparent as their classification directly relates to their inclusion or exclusion from the sale and consequently the redress if any, available to the aggrieved party.

In the absence of express agreement, there are legal presumptions that provide guidance as to the distinction between fixtures and fittings and this focus on the degree and purpose of annexation. “Fixtures” are generally items which are attached to and form part of the property, ie boilers, radiators, fitted units etc and therefore are included as part of the property unless expressly excluded. Alternatively a “fitting” or “chattel” does not form part of the property, for example carpets and free standing furniture and these are not generally included unless expressly agreed. Unfortunately in the absence of agreement between the parties, whilst these legal presumptions exist, their application in practice is far from clear cut and case law has been required to settle disputes over items such as kitchen appliances, wood flooring, garden ornaments and greenhouses to name but a few and the cost of resolving an issue relating to such matters quite often proves more costly than the subject matter of the dispute!

Another related issue relates to the apportionment of price between “fixtures” and “fittings” and the contractual purchase price of the property. The sale of fittings does not attract stamp duty land tax and therefore the apportionment issues raises it head when the price of a property is close to one of the current stamp duty thresholds. It has been known for buyers and sellers to produce lists of “fittings “ with part of the purchase price being apportioned to them It is essential that any such list is representative of fittings only and that these are not artificially inflated. Any overvaluation of the chattels is a fraud on the revenue and as such ultimately the contract could be rendered void on the grounds of public policy.

Once buyers and sellers have agreed the chattels included in a sale, it is important to remember that the contract for the same takes effect as a contract for the sale of goods and as such ownership passes on completion and the items must be transferred in the same condition as they were at exchange i.e. if they were working /undamaged on exchange then they should be working/undamaged on completion. Secondly, that the seller must make good any damage caused to the property following removal of an excluded item. In order to alleviate some of these difficulties a fixtures fittings and contents form should always be completed and annexed to the Contract. This is not a very substantive form and is best completed on an inspection of the property including the garden, rather than from memory, so as to ensure that any additional items are referred to where appropriate. If you are unsure as to whether an item is deemed to be included or excluded then please speak to your Solicitor for advice and ensure that the item is accounted for – it will save an awful lot of time, aggravation and cost in the long run!

Rebecca Bozier – Gawor & Co Solicitors