Austin Lafferty’s Guide to Buying a House in Scotland
Before the purchase of a property can be settled, missives must be signed and then title deeds must be transferred into the name of the purchaser. The missives are constituted by a written, signed offer by your purchasing solicitor, an acceptance (in writing) of that offer, and any further missives designed to iron out disputed legal clauses.
In our guide to buying a house in Scotland, we take a look at the terms of the missives you need to be aware of and everything else you need to know about the process.
Offer and Acceptance (Including Qualified Acceptance)
The offer and acceptance (known as a qualified acceptance as it contains qualifications or amendments to the terms of the offer) contain numerous legal clauses and conditions. Each clause has been designed to protect the interests of both parties involved in the sale. It’s not uncommon for the clauses to vary from transaction to transaction depending on the property and the needs of both clients. You must realise that once a written offer goes in, you have not yet formed a binding contract to buy the property. You are neither bound to buy it at that point nor can you insist on buying it. The seller is required, through their solicitor, to issue the qualified acceptance. You then as the purchaser are able to instruct your solicitor to respond to any conditions in the qualified acceptance that you don’t agree, your solicitor will do this in writing, resulting in a further missive. In order to complete the contract, the seller’s solicitor needs to write back to your solicitor confirming the additional clauses or changes are agreed upon. Once all clauses are agreed then a binding contract exists and neither party can back out without the other’s agreement.
Conclusion of Missives, Conveyancing, Date of Entry and Mortgages
When missives are concluded the conveyancing proceeds and when the date of entry comes around, it is legally binding on the purchaser to pay over the full sum. It is the responsibility of the purchaser, and their lenders/mortgage brokers, to ensure there are no delays in their mortgage being made available. Solicitors are not mortgage brokers and do not have any involvement in the issuing of loan papers nor the timing of an offer of loan. Only when they receive loan papers from the lenders, are solicitors able to process the paperwork and indent for the money. Solicitors cannot guarantee to receive the money if they are sent the loan papers any later than 14 days before the agreed entry/completion date. Your solicitor should always try their best to overcome any difficulties arising out of late issues of loan papers, but they can only do so much. Solicitors do not know what demands an individual lender will make to see or receive paperwork or information, until loan papers are issued.
As you will see from your solicitors’ letter of engagement, the money laundering regulations apply very strictly to all clients and solicitors. If you are providing money for a deposit or to purchase outright then your solicitors are entitled, indeed obliged, by law to inquire into the origin of the funds, the length of time you have had them and the bank in which they have been held. Therefore please do not be offended if they ask questions. Failure to do so would cause your solicitor to commit a criminal offence.
Title Deeds, Searches, Alterations and other Property Enquiries
As part of the conveyancing process, solicitors will check on the title deeds, searches of the title and personal registers, property enquiry matters (such as whether any local authority or public orders are affecting the property) a mining report and whether alterations, authorised or unauthorised, have been carried out to the property. On the question of alterations, solicitors are dependent on information from you as the client and from the surveyor as to whether there have been alterations. They shall assume there have not been, unless your solicitors’ attention is drawn specifically to them. If there have been such alterations your solicitor shall endeavour to ensure that the sellers produce either the appropriate paperwork from them or, if that paperwork is lacking, that remedial satisfactory paperwork be obtained in its place.
Completion of the Transaction and Payment
As you approach the completion of the transaction, your solicitor will advise you of the funds that are required. Please note that Law Society regulations do not allow your solicitor to accept personal cheques unless they are received more than 7 days before the completion date so that they have time to clear. Solicitors prefer payment by bank draft or by direct transfer from your bank to theirs and they can provide their bank details in plenty of time for this to be done.
Title Deeds Post Completion and Stamp Duty
Following completion of the transaction, the seller’s solicitor will send your solicitor the fresh title deed in your name. They will arrange a stamp duty return form to be sent to HMRC and thereafter your deeds and documents are registered in your name at the Land Register of Scotland. This process can take anything from a few weeks to a few months, but once the registration is complete, your solicitor will send your title deeds to your mortgage lender or, if there is no mortgage, to you. As an alternative to the latter, solicitors may be happy to store deeds on behalf of clients at no charge.
Other Property Considerations
If the property has working heating and other systems, it is common for the buyer to include in the offer a clause allowing them to have the seller pay for any repairs in defective systems or equipment as long as such defects are reported in writing within a certain number of days after the purchaser takes possession. Please be aware of this, and immediately on taking entry to the property, check all systems and equipment, and let your solicitor know if a written notice has to be sent to the seller’s solicitor within the set time limit, as the seller will then be liable for the cost of repair or replacement. These clauses do not apply to the general fabric of the building, the purchaser takes this as they find it, and usually, a survey will be carried out beforehand.
Solicitors do not arrange building insurance for clients’ properties unless instructed to do so. If insurance is by common policy for a flat or some other group policy, your solicitor shall advise you as soon as they know this from the seller’s solicitor, but you should assume that you require to arrange your own insurance and do so in time for the date of entry. Once you buy and take over the property, the responsibility for its safety and upkeep is yours alone.
Purchasing for Couples - Joint Names or Survivor
Most commonly when purchasing for couples, solicitors will take the title in your joint names or survivor. In the event of a death, the property would pass to the survivor. If you do not wish the title deed drawn in this way, please advise your solicitor otherwise.
Unmarried Couples Buying Property in Joint Names
For unmarried couples buying property in joint names: during the transaction your solicitors will be drafting the Disposition. This is the deed which passes ownership of the property from the seller to both of you. Often when partners are buying a home together, a survivorship clause is inserted in the Disposition so that if one partner passes away, that share passes automatically to the other without the need for any further paperwork. The alternative is not to put this clause in, which means that if one of you were to pass away, the other half does not automatically transfer to the other. Rather, the half share would be distributed according to the provisions of the Will.
Contact our Property & Conveyancing Solicitors
For a free initial consultation, get in touch with our expert team of conveyancing solicitors today.