EXPLANATION FOR FIRST TIME BUYER



GUIDE TO BUYING YOUR COUNCIL HOME This Guide is intended to try to give you some idea of the procedures involved when buying a house or flat from a local authority or housing association landlord (under the provisions of the Housing Act, “Right to Buy” schemes).PRELIMINARY Whilst the legal position in buying a property under the “Right to Buy” scheme is the same as buying a property privately, the procedures involved are slightly different. One obvious difference is that you would normally be living at the property and have been living there for some time so you would be familiar with the property which means that not all of the searches would be required for your protection (although they may still be required if you are borrowing money from a bank, building society or other lender on a mortgage). Furthermore, the local authority or housing association does not normally submit draft contracts and the matter normally proceeds straight to the completion stage without a preliminary exchange of contracts.In a straightforward purchase with no unusual problems arising, our procedure (briefly) is as follows: - We take your instructions i.e. details of the property to be purchased, etc. We would normally like you at that stage to let us have a copy of any letter which you have received from the landlord, setting out details of the discounted price deal and if possible enclosing a copy of a plan of the property.If you have not already accepted the landlord’s offer to buy the property on those terms, please feel free to bring in the acceptance form to this office so that we can submit it on your behalf (obviously after you have already signed & dated the form).We would then contact the landlord and in due course we will receive from the landlord either a transfer (if it is a freehold property) or a Lease (if it is a leasehold property) document for you to sign and various other supporting documents.If you or your lender instructs us to do so then we send a search to the local authority which is a standard form of document asking various enquiries about roads, drains, planning permissions, etc. Hopefully the result should be available within 1 to 3 weeks but some councils take substantially longer to deal with the search. Many landlords in these cases do not supply any copies of their title documents so if that is the case then we will have to apply to the Land Registry for copies of the title. If anything unusual appears on those documents, then we will send further questions to the landlords. We will let you know as soon as we have received all of the answers which we require and at that stage will send you copies of anything which is particularly relevant or unusual. We receive a copy of your mortgage offer from your lender and we will then contact you at that stage to explain some of the provisions and make sure that the offer is in accordance with your expectations and wishes. Please immediately deal with any correspondence or queries from your Bank, Building Society or other lender since delays at this stage can hold up the whole process of buying. Nowadays a lot of lenders insist upon instructing their own solicitors or conveyancers and we would therefore have to liaise with that firm and satisfy their requirements as well (these requirements may include some of the additional searches mentioned below): our costs in that connection would have been included in any quotation which we had previously given. However, the lenders' solicitors/conveyancers will often charge a separate fee themselves which would not have been included in any such quotation given by us.The above represents the work which we ALWAYS carry out but some additional work can be carried out depending upon the circumstances. For example:If you are buying a new property built on a plot of land which has not previously been developed, then it might be necessary to carry out some additional searches with the relevant County Council to see if there are any rights (such as rights of common) registered against the property. You may also wish us to carry out an additional environmental search to find out what the land may have been used for prior to the development since that should give some guidance as to whether or not there is any significant risk of the land having been contaminated at any point. The search also contains some further information about the risks of coastal or river flooding. If the position is not already known to you or is not made clear in your survey report, you may also want us to carry out a drainage & water services search with the relevant water company to make sure that the property is connected to the mains water supply, sewerage & drainage services. This search will also contain some limited further information about the risk of flooding.Historically, some properties are built upon land which had previously been church land and in those circumstances, there is a risk that the church may have imposed a "tithe" on the land requiring the occupiers of the land to potentially contribute towards the costs of carrying out repairs to the church buildings. Since October 2013 churches are required to register these claims at the Land Registry but if the land which you are buying has not changed hands since then, the Land Registry records may not have contained any warning about any potential "Chancel Repair Liability". A short ChancelCheck search can be carried out to see if there is any such potential liability and a fairly cheap indemnity insurance policy is available if the search proves positive. However, the risks involved are fairly small and the potential contribution is likely to be very small in most circumstances as well.If you are buying a property in a part of the country where there are (or have been) mining works, then some sort of mining search would also be a sensible precaution.We will not automatically carry out any of those searches without prior express instructions from you although in certain circumstances, we may advise you that such searches are desirable (or your lenders' conveyancers may insist upon them). In most cases, the additional costs of those searches would not have been included in any previous quotation given by us.When all of the above matters are completed, we will invite you to call in to go through all of the documents. At this stage, we will explain the documentation to you in detail and deal with any further questions which you have at that stage. If everything is correct and approved by you then you would be expected to sign the transfer or lease documents. However, nothing is legally binding at this stage until the completion date. If two or more people are buying together we will advise as to the methods of ownership e.g. Joint Tenants or Tenants in Common (see attached explanation). AFTER SIGNING BUT BEFORE COMPLETION DATEWe will then return the deeds & documents to the landlord. Some landlords will allow us to suggest or even set a completion date but many landlords prefer to set the date themselves (although even then they are often willing to negotiate on the date so that it is mutually acceptable). Once the date has been agreed, most landlords will send us a letter confirming the completion date and will subsequently send us a completion statement. Quite often, the landlords will insist upon the last two or three weeks rent being paid to this firm on completion rather than in the normal way because they are required to make sure that the rent account is up to date before allowing the sale to be completed. If there are any rent arrears from the current tenancy or from any previous tenancy, these will also appear on the completion statement because all outstanding sums must be paid before the landlord will complete the sale.As soon as the completion date has been agreed, we will report generally to and request the mortgage advance moneys from your mortgage lender (if any); they usually require at least five working days’ notice of the completion date. As soon as we have received sufficient information, we will send you a completion statement setting out exactly how much money will be required from you prior to completion. COMPLETION DAY On the completion day provided that we have safely received all of the moneys from your mortgage lender and from you (if necessary) we then instruct our bank to send all of the moneys to the landlords’ bank. As soon as they have received the money (sometimes, for instance on a Friday, it might take several hours for the money to be transferred because the banks are so busy) the purchase is duly completed and the date is inserted on all of the deeds. The landlords will then send us the signed & dated transfer or lease document to enable us to proceed with the final stages. When we have received the documents, we normally write to you to confirm that everything has been duly completed.AFTER COMPLETIONAfter completion, it is first of all necessary to deal with any Stamp Duty Land Tax on your purchase. Since 1st December 2003, the Stamp Duty system has changed considerably: H.M. Revenue & Customs (H.M.R.C.) now requires a six page form to be completed or at least signed by the Buyer personally and the Stamp Duty Land Tax is charged on the transaction itself. The new form of Land Transaction Return has to be completed within thirty (30) days of the purchase completion date. Although H.M.R.C. suggests that the Form should be completed by the Buyer personally, it is necessary to include details of the Seller’s solicitor/agent as well as the details of this firm as your “agent”. Furthermore, specific code numbers have to be inserted so it is not very easy to complete the form without reference to the guidance notes issued by H.M.R.C. (which take the form of a 75 page booklet and which can be ordered from H.M.R.C. or can be read or downloaded from “”. Alternatively, we would be willing to complete the form for you and send it to you for signature but we would have to charge a further ?50 + VAT for the extra work involved. As your agent, we will only be assisting you with the form and any initial correspondence: you will still be signing the form yourself and it is therefore your responsibility to check that all of the information and answers are complete, correct and honest.Subsequently, H.M.R.C. will issue a certificate which we need to complete the registration at the Land Registry to show you as the owner of your new property. We will send the original set of copies of the new Land Registry entries to your Bank, Building Society or other mortgage lender, but will also send you some copies for your own reference at the same time. Unfortunately, the Land Registry plan of your property which is normally included in the official Land Registry documents is itself based upon the ordnance survey plan and is therefore subject to the Ordnance Survey copyright. We have obtained a licence ourselves and can supply official photocopies with the appropriate copyright data for a nominal charge of ?6 plus VAT. If there are any older copies of the Land Registry plan available, we could send those to you since we would not have photocopied them ourselves or alternatively, if you require an official up to date office copy from the Land Registry of the filed plan, we could obtain that for you upon payment of the Land Registry fee in that connection (currently ?8.00).This is a short summary of our work and we hope it helps you to understand what we are doing for you. If you require any other information, please call us during office hours. If the call can wait until 10.30 a.m. this will give us time to deal with all the mail we receive that day (including yours). If you are unable to speak to the solicitor, then the solicitor's secretary may well be able to help you. Otherwise, please leave a message explaining the nature of your enquiry which will make it easier for the solicitor to have a complete answer for you when he returns your call. Obviously, it always helps us if you can remember to quote your file reference (which should appear on all of our letters to you) when you contact us. To avoid disappointment please telephone for an appointment before calling in to see us in person.SWABY CLARKE & NORRISSolicitorsJhumat House160 London RoadBARKING Essex IG11 8BBDX 8507 BARKINGTel: (020) 8507 1882Fax: (020) 8507 1891Authorised & regulated by the Solicitors Regulation Authority (SRA number 366705) ................
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