Buying or selling a property can be both very exciting and stressful at the same time. The legal process to acquire title to a property is known as conveyancing. Although people tend understand the basic concept of the process involved, the legal procedures tend to raise many questions.
Inability to understand what conveyancing really is, how long it takes, what the costs involved are and what the process consists of, tends to cause a lot of uncertainty and confusion for people.
This guide will provide you with all the necessary information you need to know in relation to conveyancing
Table Of Contents
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The Conveyancing Process In Scotland
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The Missives
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Finding The Right Conveyancing Solicitor
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Making An Offer
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Receiving An Offer
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Deed Of Transfer
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Settlement
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Land & Buildings Transaction Tax
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Conveyancing Fees In Scotland
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Land & Building Transactions Tax Fees
The Conveyancing Process In Scotland
Conveyancing is the legal process that transfers ownership of a property from the existing owner to a new owner. – conveyancers – also assist with remortgaging and the negotiation of leases.
Conveyancing involves a creation of a contract between a seller and a purchaser, whereby the ownership of the property is transferred from one person to another. This is done through the completion of the missives – the technical term for the contract. The missives are formed by an exchange of letters between solicitors representing the sellers and purchasers.
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The Missives
Whilst the exchange of letters might seem simple and straightforward, there are a number of factors that can affect the process. For instance, the purchaser’s offer may be subject to searches and checks directly affecting the property.
This process is in place to ensure that both parties have a complete understanding of what is included in the purchase price as well as the factors that affect the subjects of the sale. In addition, it is crucial to allow a solicitor to carry out the necessary checks to establish whether there are any matters the purchaser needs to be made aware of.
Such matters vary but can include outstanding communal repairs, compliance with local regulations regarding the fabric of the building, and relevant paperwork and permissions where alterations to the property have been made.
Thorough checks ensure that a purchaser does not end up in a situation where they are confronted with additional costs after completing the purchase. This also ensures they have a full understanding of what they have bought.
Timescales for buying or selling property vary depending on the complexity of the sale. Normally, the process can be completed within a reasonable period, typically between four and nine weeks from the moment the offer is made to completion.
That being said, in most cases there are multiple parties involved in the transaction, and in certain scenarios it can take longer. Your solicitor will usually give you an estimate of how long the process will take after your initial meeting, but it is always wise to be prepared for potential delays or complications.
Finding The Right Conveyancing Solicitor
To begin the conveyancing process of buying or selling a property, you will need to find a property solicitor who can carry out the legal work. There are many law firms in Scotland that offer such services, but it is crucial to find one that will ensure the process is handled properly and smoothly.
Whether selling or purchasing a property, your offer must come from a solicitor. For this reason, it is wise to research and select the right solicitor well in advance before instructing them to act on your behalf.
Conveyancing is a significant transaction, and paying a little extra can give you peace of mind. More experienced solicitors may charge higher legal fees, but the added expertise is often worth the cost.
Be cautious of solicitors advertising low fees, as there may be hidden charges that ultimately make the transaction more expensive. It is best practice to choose a solicitor who offers a fixed fee rather than billing based on work completed, as this provides cost certainty and prevents unexpected increases.
While some believe it is best to use a local solicitor, this is not always necessary. Although proximity can make it easier to hand in documents or attend appointments, efficiency and reputation are far more important. A solicitor who communicates well throughout the process is more valuable than one who is simply nearby. With modern technology, documents can be posted, emailed, or even faxed, allowing transactions to run smoothly regardless of location.
An experienced solicitor will provide you with a single point of contact throughout your transaction, offering peace of mind and helping to reduce the stress involved.
Making An Offer
When looking to purchase, once you find a property for which you wish to make an offer, your solicitor will put together an offer after confirming with you specific details. Your offer will include the purchase price of the property, a proposed date of entry as well as what exactly is included in the purchase price – for example any fixtures and fittings. This offer will then be sent over to the estate agency, following which you will find out whether you were successful or unsuccessful.
Receiving An Offer
On the other hand, if you are selling a property, your solicitor will be in a position to assist you with the process of reviewing the offers. This will then allow you to make a decision on which offer best meets your criteria before accepting one.
In conveyancing, a contract between the buyer and the seller is concluded through missives, which as explained above are essentially letters exchanged between each parties solicitors.
Missives will include conditions of the sale, specifying the details of the purchase price, the date of entry as well as various other factors.
Prior to concluding the missives, your solicitor will have to ensure that the legal aspects of the sale and purchase are in order. Initially, the legal ownership will be checked to ensure the seller has the ability to enter into such transaction. Following which, your solicitor will review the title burdens and servitudes within the Title Sheet and point out exactly what they state and whether there are any restrictions on the property that may affect your purchase and your freedom to use the property. For example, if you have to allow a neighbour access over your driveway to reach the road.
At this stage, the solicitor will also review any development plans that could affect the property in question and your desire to purchase it. If there were any works carried out to the property, the solicitor will ensure that relevant paperwork and permissions was obtained prior to this from the local authority, ensuring you will not be affected by any additional costs after the transaction has been settled.
Deed Of Transfer
Lastly your solicitor will prepare both a deed for a transfer of ownership of the property you decided to purchase to ensure it will be in your name and a standard security for the mortgage.
The standard security is a document that is registered with the Registers of Scotland. The document gives your mortgage lender security over the property and allows them to repossess the property if you fail to keep up with repayments towards your mortgage.
Once the missives have concluded, a binding contract will be in place. It is important to remember that your solicitor will sign the contract on your behalf and therefore you do not have to sign this personally. That being said however, once missives are concluded the terms of the contact are legally binding upon you.
There are a couple of documents which you will need to personally sign and your solicitor will arrange for a signature to be obtained, once the documents are prepared.
Settlement takes place on the date of entry and it is at this stage that solicitors will exchange the final paper work. Transfer of the purchase funds will also be completed and payment for any other outstanding fees will be made. Once all is settled, keys will be made available for the property that was sold.
Land & Buildings Transaction Tax
Your solicitor will then proceed to make payment for Land and Building Transaction Tax (mentioned below) if there was any payable, following which the relevant documents will be sent to the Registers of Scotland for registration. This procedure is to ensure that standard security is placed on the title, if you have one, and that change of ownership has been registered.
Conveyancing Fees In Scotland
When planning on moving home or buying a property it is crucial to take into account the additional conveyancing fees that come along with the transaction. It is always best to plan ahead and think about these when budgeting. Your solicitor will always give you a breakdown of the costs involved, specifying exactly what their fees are and what the cost of the taxes and other outlays will be.
Below you will find a guide of what the conveyancing fees are. You should be aware that these will differ depending on individual circumstances and your solicitor will calculate everything to provide you with an account of expenses accordingly.
The fee for registering an advance notice is £20 and this is payable to the Registers of Scotland. Solicitors register advance notices on both sale and purchase transaction in order to ensure that your rights to either the property you are selling or purchasing is protected. This process also affords protection to the lenders right if you are taking out a mortgage to conclude the transaction.
Solicitor fees will vary depending on the work involved in either the purchase or the sale. Your solicitor will provide you with a quotation of how much the transaction will cost, once they have had an opportunity to examine what will be involved in your individual property transaction. Generally fees will fall within the estimates of £500 to £2,500. As reinforced previously, it is important to remember that finding the cheapest option is not always the best approach to take when entering into property transaction. It is therefore worthwhile spending a little extra on solicitor fees, in order to ensure a professional and attentive service throughout the process.
Registering Fees
Registration fees just like advance notice payments are payable to the Registers of Scotland. The fees are payable for registering the deeds in the Land Register and all vary depending on the price of the transaction. It is important to note that the registration fees start at £60 and can go up to £7,500. Solicitors will provide a breakdown of the fees in order to ensure you have a full understanding of costs involved.
In order to ensure you have a full understanding of what exactly you are buying, your solicitor will carry out all necessary searches on the property in question as well as the area. This process allows determining whether there are any issues or anything you should be notified of prior to the purchase. Solicitors also make checks on the buyer and the seller of the property to ensure smooth transactions without any complications. Prices for searches are estimated between £100 and £200 but each individual transaction is different and consequently, a solicitor will specify the exact cost to you.
Conveyancing Scotland | Land & Building Transactions Tax Fees
Lands and Building Transaction Tax is a Scottish government tax. This applies to properties above the value of £145,000 and it is how much is payable is determined on each portion of the property’s sale price.
The table below will provide you with the percentage of tax payable, according to the sale price.
| Income Bracket | Tax Rate |
|---|---|
| Up to £145,000 | 0% |
| Between £145,000 – £250,000 | 2% |
| Between £250,001 – £325,000 | 5% |
| Between £325,001 – £750,000 | 10% |
| £750,000 or more | 12% |
If for instance you wished to purchase a property with the sale price below the sum of £145,000, you will not be exposed to the cost of LBTT. If however, you wished to purchase a property with the sale price of £360,000, you would then have to pay £9,350 in LBTT.
You can easily calculate this online and your solicitor will be in a position to let you know exactly how much will be payable but to provide you with some details, it is calculated as follows:
There is no LBTT on the first £145,000. 2% is the chargeable on the amount between £145,001 and £250,000 as per the table above. This amounts to the sum of £2100. There is an increase to 5% between the amount of £250,000 and £325,000, which adds to £3,750. Lastly, 10% is charged for the portion above £325,000, adding up to £3,500.
Your mortgage lender will charge you a fee, which will range between £25 and £50 for the transfer of mortgage funds to the seller. This fee is normally paid on the date of entry but it can be added to your mortgage, allowing you to pay it off monthly.
And the circumstances around it vary depending on the individual aspects of transactions. Speaking to a property solicitor ahead of time will ensure they can address any specific aspects you may wish to have a better understanding of, how much the transaction will cost you, as well as the procedure involved.
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Please note: This article is for general information purposes only and does not constitute legal advice. It should not be relied upon as a substitute for professional legal advice tailored to your specific circumstances. If you need advice on a legal matter, get in touch with our team.
