As a homebuyer, your interest in the legal formalities is likely to diminish after completion and this is entirely understandable. Nevertheless, the post-completion stages of conveyancing are important too, as they help to prevent problems arising in the future when you might wish to sell and move again.
Here are the key tasks which happen after completion, and why they are important.
Dealing with any mortgages
If your seller has a mortgage, your conveyancer must ensure it is discharged. However, the seller may need the sale proceeds to pay it off. On completion your conveyancer will usually obtain an undertaking from the seller’s conveyancer, which is a binding promise, that any existing changes will be paid off from the sale proceeds. Sometimes this happens instantly, for example if the seller’s lender sends an electronic discharge direct to the Land Registry. Sometimes your conveyancer will need to obtain a paper release from the seller’s conveyancer.
It is vital your conveyancer ensures the discharge is with the Land Registry. Failure to do so could mean the seller’s mortgage is still attached to your property. This would adversely affect your title, breach the terms of your mortgage, and cause problems when you come to sell or remortgage.
If you are taking out a mortgage, then your conveyancer will also usually be acting for your lender. They will date your lender’s charge at the same time as the transfer to you and send both to the Land Registry.
Paying stamp duty land tax
Your conveyancer will have told you how much stamp duty land tax (SDLT) is payable before completion, and should have ensured there are sufficient funds in place. They must then complete the SDLT return and pay HMRC within 14 days of completion. Failure to do this could result in you having to pay a fine and interest to HMRC.
In addition, your conveyancer will need a certificate of compliance from HMRC to send to the Land Registry. Without this certificate, the Land Registry will not register you as the new owner.
Registering your property at HM Land Registry
Your conveyancer must register the transfer to you, and any mortgage, at the Land Registry.
It is the entry of your name in the register, rather than the handing over of the keys, which is evidence of your ownership, and failure to register would have serious repercussions. It could, for example, prevent you from selling your home in the future. Any buyer will need to know they are dealing with the legal owner, and registration of title is the requisite proof of this.
In theory, registration should be a straightforward and mechanical process. In practice though, this is not always so. Some applications may involve more than a simple transfer of ownership. For example, the creation of new rights, such as a right of way. The register should include these rights, and your conveyancer should carefully check it accurately reflects the documentation submitted. Sometimes, the Land Registry may also ask questions or request clarification before completing the registration. These are called requisitions, and your conveyancer must respond promptly to them to avoid the Land Registry cancelling the application.
Currently, the Land Registry has a significant backlog and often takes over a year to register a transfer. Unfortunately, this can cause complications if you want to sell or remortgage in the meantime. Submitting an application that is in perfect order, and dealing with any requisitions quickly, should help ensure it registers you as the owner as soon as possible.
Dealing with any title restrictions
A common reason for delay arises because the Land Registry raises a requisition about a restriction on the seller's title. The application cannot proceed until this is resolved. Typically, a restriction will prevent the registration of a transfer unless the applicant complies with its terms. For example, it may require the consent of a named person or a certificate that the terms of a certain document have been complied with.
Your conveyancer should ensure the terms of any restriction can be complied with before completion, and that evidence of compliance accompanies their application. Occasionally, though, issues can arise after completion. For example, a restriction may be obsolete, and it is no longer possible to comply with it. In this case, your conveyancer may have to request its cancellation to allow registration of the transfer to you to proceed.
The Land Registry will cancel some types of restrictions automatically. For example, it should remove a restriction in favour of your seller’s lender at the same time it cancels its charge. However, your conveyancer should check the register carefully after the Land Registry has completed the application. It is much better to address any errors or omissions then, rather than to discover them much later when you are in the middle of trying to sell or remortgage your property.
Leasehold properties and other issues
Just as each property transaction is unique, so are the issues which can arise after completion. For example, if the property has the benefit of a guarantee or warranty, your conveyancer may need to give notice of the transfer. Similarly, if there is an existing title insurance policy, they will need to ensure the protection continues, or that a new policy is in place.
Leasehold properties will usually require additional attention. There may, for example, be service charge apportionments to finalise. In most cases, your conveyancer will need to give the landlord notice of the transfer. They may also need to provide a deed in which you promise to comply with the lease terms. It is prudent to obtain a written acknowledgement from the landlord to avoid any disputes in the future.
How we can help
Choosing the right conveyancer is important not only to ensure your purchase progresses smoothly but for reassurance all the relevant formalities have been correctly completed. As well as having vigorous processes in place, we pride ourselves on our personal approach and our diligence. Helping you move into your new home is our number one priority, but we will never lose sight of your long-term interests.
For further information, please contact a member of the conveyancing team on 01905 721600 or via email worcester@parkinsonwright.co.uk
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.