Background
England and Wales land law is similar to Irish land law, particularly so after the 2009 modernisation of Irish Land law. Although the respective land laws are broadly similar, conveyancing practice is markedly different. The matters which are emphasised differ considerably.
For example, in England and Wales, it is standard practice to undertake a Local Authority Search which will give a significant amount of information in relation to the property under a whole host of headings. There is no equivalent obligation on Irish Councils to collate and maintain information in the same way, so the practice does not exist here.
Since 1990, title registration has been compulsory in the whole of England and Wales. Because of this, unregistered title based on deeds is almost never encountered. Under the Land Registry system, the State guarantees each person’s ownership. There is a “title” number, equivalent to an Irish Folio. This contains details of owners, mortgages, rights affecting the property and describes each property with reference to a high-quality Ordnance Survey map. The Land Registry website is user-friendly and the information on it (including prices) is public.
Although the detailed procedures are different, the broad steps involved in a conveyancing transaction are quite similar to those in Ireland. There is a “pre-contract” stage during which neither party is bound and either may walk away. After contracts are “exchanged” both parties are bound and completion follows at a stipulated date, usually four to six weeks later.
Step 1
An Energy Performance Certificate is required before most property can be marketed for sale or rent.
When a buyer is secured, a booking deposit may be paid to the Estate Agent. This is almost invariable practice in Ireland but is less common in England and Wales.
The default position is that deposit is refundable on demand prior to exchange of contracts. However, exceptionally the estate agents contract may make other provision.
The Estate Agent will usually issue details of the sale to both the seller, buyer and their solicitors. Neither seller or buyer will be bound until contracts are signed and exchanged through the parties’solicitors.
Step 2
The seller’s solicitor prepares and issues draft sale contracts to the buyer’s solicitor. There is a protocol for domestic conveyancing which is nearly always adopted. The seller’s solicitor pre-empts the standard enquiries by having the seller complete standard questionnaires which are sent to the buyer’s solicitor with contract documents.
There is usually a longer gap than in Ireland before contracts are exchanged. Detailed pre-contract enquiries are often raised and replied to by the seller’s solicitor prior to contract. If the Protocol has been used, this step is reduced or eliminated. If an apartment is involved, a detailed response is often required from the management company.
It is necessary for the buyer’s solicitor to undertake pre-contract enquiries with local Government bodies which took at least two to three weeks.
Step 3
Once searches, enquiries, title, pre-contract replies and other issues are in order and the buyer has a satisfactory building survey and loan finance, it is possible to move to a binding contract. Once this occurs, both the seller and buyer are legally bound to the transaction. Unlike in Ireland, there is almost always instantaneous exchange over the telephone so both buyer and seller are immediately bound.
In contrast, the position in Ireland is that the buyer signs contracts in duplicate and sends them to the seller. The seller may then wait for a week or two before signing e.g. to ensure that he has obtained binding contracts for the purchase of an alternative property in that period.
The practice of instant exchange means that chains of purchasers develop more rapidly in England and Wales. There are particular procedures to deal with chains whereby a purchaser’s solicitor can commit to exchange within a two to four hour period provided he exchanges on the sale of the purchaser’s existing property. The Law Society practice allows conditions whereby a deposit on a sale can be passed on to fund part payment of the deposit on the new purchase.
Step 4
Because of the strong emphasis on Local Authority Searches and pre-contract enquiries in England and Wales, there tend to be fewer issues to deal with between contract stage and completion. Generally, the main issue will be the completion of the loan offer conditions. Issues may also arise in coordinating purchase and sale dates with the seller.
Most lending institutions use a Certificate of Title system by which the buyer’s solicitor also acts for the banks and completes the legal requirements for the mortgage.
Step 5
Most Irish residential investment property purchasers use Irish based lenders who provide England and Wales lending. England and Wales based lenders are also used.
The process of dealing with lending institutions is broadly similar to that in Ireland. The bank advances funds to the buyer’s solicitor on foot of an undertaking to put the mortgage in place.
Upon completion, the purchase monies are paid, and possession of the property is delivered to the buyer. The buyer must put his solicitor in funds for stamp duty. See the separate note in relation to stamp duty and other tax issues arising.
Step 6
Since 2003, the purchase deeds themselves are not stamped. Instead, a detailed return is made to the England and Wales Revenue on-line or by DX/post. Once the stamping certificate is returned the purchase and mortgage deeds are lodged in the Land Registry and registration takes place within about six to eight weeks.
Step 7
The deeds are sent to the buyer’s lending institution where there is a loan. If there is no loan, they are held for the buyer.
