Residential Newsletter - Spring 2022

Residential Reflections

Each quarter, we ask our experts in the Residential Conveyancing team to reflect on an interesting piece of news, work, or a case within their sector. This edition of the Residential Newsletter focusses on the day of completion.Completing on the sale or purchase of a property is often an exciting time, for example, it may be the first property a client will own, but it can also be extremely stressful. At Freeths, we aim to alleviate this stress as much as possible by proactively preparing for the completion day before it arrives. Here are some examples of the steps our specialists take to improve our client's experience Rebecca Maeers, Director & Head of Residential Property (Nottingham)

“When acting for a buyer with a mortgage, I always ask for the mortgage funds to arrive the working day before completion where a lender permits this. This results in the client paying an additional day of interest on the loan but ensures a much smoother process on the completion day. A lender will only guarantee that funds will arrive by close of business on the day requested so you could be waiting into the afternoon for funds on a busy day - not ideal where a long chain is involved!If I have any completions where I am at the bottom of a long chain or I know that it will be a busy day for completions, I will also send the monies to the Seller's solicitor the working day before completion to be held to my order pending completion the next day. This helps the funds move up the chain as quickly as possible and ensures that all parties can get their keys in good time. Unfortunately, we have no control over the banking system, and the time that it takes for funds to be received once sent, so this can really help on a busy day. Busy days tend to be the day before a bank holiday weekend or Fridays. If possible, it is best to try and avoid these days - particularly where there is a long chain involved.”

 Caroline Wofinden, Director & Head of New Build and Social Housing (Nottingham)

“When acting on plot sales for our house builder clients, we have helped their sales teams to develop a “Completion Day Checklist” which is given to buyers in the run up to the completion day. This includes booking removals as soon as the completion date is known, notifying any relevant authorities or utilities companies of the completion date to ensure services are up and running, checking meter readings on the day of completion, giving the new address to any companies that need it, registering with the local doctor and dentist surgeries and registering to vote, checking where the stopcock and fuse box is located, checking what day the bins are collected and having a “moving day” bag, with loo roll, tea/coffee/ milk/chocolate, phone chargers and other essentials.” 

Sarah Major, Senior Associate (Manchester)

“For transactions in a long chain, it has been helpful to agree a joined up/robust communication process with conveyancers acting for other parties in the chain. When all parties share a common aim in respect of completion dates, proposing all the solicitors communicate when nearing exchange can save the time that is spent passing messages up and down the chain, or via the estate agents as dates are proposed. This can ensure that a swift agreement is reached and that all parts of the chain are aware of certain dates that cannot be agreed to and why.”

Completion... the holy grail!

In residential conveyancing, legal completion is the final stage in the process of transferring the ownership of property from the seller/landlord to the buyerenant. Usually, it is treated as having occurred when the balance of the purchase monies/premium for the property have been received by the seller's/landlord's conveyancer's bank and the transfer documents (e.g. the Form TR1, Form TP1 or lease) are dated by the seller's/landlord's conveyancern.

For most transactions, completion takes place on the contractual date for completion (i.e. the date specified in the contract for completion to take place) but some don't complete on that date. It is very unusual for a completion date to be brought forward. A delay is more common. Reasons for delay include the buyer'senant's conveyancer not receiving the balance of the completion monies from their lender on time or the legal documentation not being executed by all interested parties.From a client's perspective what is often termed “practical completion” is more of a focus. This is when the property in question is empty (if, of course, the sale/purchase is with vacant possession!) and the keys are released/collected.There is no doubt that the anticipated date for completion can be a very stressful day for clients, so a seller (loading up all their worldly goods in removal vans at their current property) or a buyer (unloading the same things at their new abode), many of whom are in a chain!

So, what can make this process less stressful for clients?

Demystifying the conveyancing process from start to finish

Completion is a very small part of a much bigger picture. If clients understand the conveyancing process, as a whole, it can make it less daunting. To help consumers, in May 2019, the Government released guides outlining what consumers should expect at each stage of the home buying and selling process.

• How to buy a home
• How to sell a home

The practices and procedures we follow behind the scenes

The Law Society Conveyancing Protocol (2019) (“the Protocol”) provides a framework for conveyancers to follow when buying and selling properties (save for new build homes) for clients. Paragraphs 28 to 32 (inclusive) of the Protocol deal with completion matters and include, all important, “touchpoints” with clients and estate agents.Reference is made in the Protocol to another important document - The Law Society Code for Completion by Post (2019) (“the Code”). Providing a process to follow when completing a property transfer that does not take place in person, the Code sets out a clear structure for completion, making a conveyancer's obligations clear whether they are acting for a seller/landlord or buyerenant.

Top Tips from our team

The team have shared some of their tips in the Residential Reflections section of this Newsletter. Here are some highlights:

• For transactions in a long chain, it has been helpful to agree a joined up/robust communication process with conveyancers acting for other parties in the chain;
• When acting for a buyer at the start of a chain, especially a very long chain (!), send completion monies to the seller's lawyer the working day before completion to hold to order. This means they can send their monies up the chain as soon as the banking system opens for business on the contractual date for completion;
• Provide buyers with a “Completion Day Checklist”;
• Complete due diligence checks in advance; e.g. Lawyer Checker searches and calls to solicitors and clients to confirm bank details the day before completion.

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The Core Residential Team

If you require further assistance on this, please contact a member of the Residential Team.