The Key Elements and Structure of a Freehold Property Transaction
• Conveyancing: The process of transferring the ownership of a property.
• Two stages in conveyancing: Exchange of contract and completion.
• Caveat Emptor: Buyer beware. The seller is not obliged to disclose information
about the property, other than about limited matters of title, and would not be liable
for any defects in the property which later come to light.
Pre-Contract Stage
Both Solicitors:
• Check for conflicts of interest.
• Obtain client signature to the contract.
Seller’s Solicitor:
• Take instructions from the seller client.
• Investigate title and produce evidence of title (deuce title) to the buyer.
• Check whether there are any encumbrances that will prevent the buyer from
using the property as they intend.
• Reply to the buyer’s pre-contract enquiries.
o Any incorrect information provided by the seller can give rise to
misrepresentation.
• Draft the contract.
Buyer’s Solicitor:
• Take instructions from the buyer client.
• Investigate title.
• Raise pre-contract searches and enquiries and check buyer client has
commissioned survey.
o Solicitor may want to carry out additional enquiries e.g., boundaries, access,
disputes, outgoings and previous work carried out at the property.
o Solicitor will also carry out pre-contract searches of statutory, public and
private bodies to obtain more information about the property.
,• Approve draft contract.
• Prepare pre-exchange report to client.
• It is important that buyer’s solicitor is satisfied with the title before exchange of
contract, once exchanged, the buyer usually cannot raiser further enquiries on
the title if ‘requisitions’ provision is included.
Exchange of Contract
• Exchange of contracts is not compulsory, but it fixes the completion date and
gives the buyer time between exchange and completion to make their final
preparations.
• The contracts record the agreed terms. Parties are not bound to the transaction
until contracts are exchanged.
• Exchange of contracts and completion can take place simultaneously.
• Buyer will usually pay a deposit. Typically, 10% of the purchase price.
Pre-Completion Stage
• The time in between exchange and completion.
• Time to make sure that all the correct documentation and completion money is
available on the completion date.
• Transfer deed will need to be prepared and executed
Seller’s solicitors:
• Approve the draft transfer deed.
• Reply to the buyer’s pre-completion enquiries, including giving an undertaking to
discharge seller’s mortgage.
Buyer’s solicitors:
• Draft the transfer deed and mortgage deed, if acting for the lender and obtain
client execution of mortgage deed.
• Raise pre-completion searches and enquiries, e.g., check whether information
obtained at pre-contract stage remains valid and there will be no problems
registering the buyer’s title at the Land Registry. If also acting for lender, check
buyer’s solvency.
• Submit report on title or certificate of title to lender and request mortgage
advance.
Completion
Completion is the stage when the bulk of the purchase money is paid to the seller
and the transfer deed is completed to transfer the property to the buyer.
Post-Completion
Seller’s solicitor:
• Ensure that any mortgage the seller had is paid off and removed from the title.
Buyer’s solicitor:
,• Buyer’s solicitor must ensure that Stamp Duty Land Tax (England) or Land
Transaction Tax (Wales) is paid on the transfer.
• Buyer’s solicitor must register their client as the new owner of the property and
register any new mortgage over the land.
Both sides must finalise the administrative matters.
The Law Society Conveyancing Protocol
Purpose:
• A set of standardised procedures for residential conveyancing (buying and
selling homes).
• Aims to ensure consistency and efficiency across firms.
Scope: Residential conveyancing only (not commercial).
Content:
• Gives step-by-step guidance to solicitors on how to conduct a residential sale
and purchase.
• Accompanied by standard forms issued under the TransAction brand e.g., TA6
Property Information Form which is standard pre-contract enquiries form for
freehold properties.
Connection to the Conveyancing Quality Scheme (CQS)
• Law Society’s CQS requires firms to follow the Protocol.
• CQS membership is essential for firms to act for major mortgage lenders.
• Also involves a Client Service Charter and mandatory training.
Professional Conduct
Acting for Seller and Buyer
Acting for buyer and seller is governed by paragraph 6.2 in The Code of Conduct.
• Subject to certain exceptions, a solicitor cannot act for both parties if there is a
conflict of interest or a significant risk of such a conflict.
• There is a high risk where the land is being transferred for value.
• Exception:
o Where the parties have a substantially common interest in relation to the
matter. But a common interest does not apply to a property purchase.
o Clients are competing for the same objective. Solicitor could act for two
buyers who are competing against each other to buy a property but does
not for a seller and buyer situation.
Acting for Joint Buyers
, • Usually acceptable to act for joint buyers, as long as comply with paragraph 6.2
of the Code of Conduct.
• It may be necessary to advise residential buyers separately about how they want
to hold the equitable interest.
Acting for Borrower and Lender
• Acting for a lender and borrower is possible, unless there is a conflict of interest
or significant risk of such a conflict (paragraph 6.2)
• Risk is high if:
o The mortgage is not a standard mortgage of property to be used as the
borrower’s private residence.
o The mortgage is a standard mortgage, but you do not use the approved
certificate of title.
• Paragraph 6.2(a) substantially common interest exception applies:
o Both clients have given their informed written consent.
o Effective safeguards have been put in place to protect any client confidential
information.
o The solicitor is satisfied that it is reasonable for them to act for both clients.
• Paragraph 6.3 Duty of confidentiality to one client might conflict with the duty
of disclosure to another client.
Acting for Joint Borrowers
• It is usually acceptable to act for joint borrowers, provided no conflict of interest
exists or likely to arise (paragraph 6.2).
• There may be a problem where a matrimonial home is owned jointly by a married
couple and one of them agrees to mortgage it as security for a business loan. If
the business fail, the spouse may then try to have it set aside on the basis of
undue influence.
Etridge guidelines for solicitors acting in these circumstances.
The lender should, with the borrower’s consent, provide the solicitor with the
following information:
a) The purpose for which the loan is being made available.
b) The current amount of the borrower’s indebtedness.
c) The amount of the current overdraft facility.
d) The amount and terms of the new loan.
e) A copy of any written application made by the husband for the loan.
The solicitor should then:
a) Explain to the spouse the purpose for which the solicitor has become involved.
b) Explain that the lender will rely on the solicitor’s involvement to counter any
suggestion that the spouse had been unduly influenced or has not fully
understood the nature of the transaction.
c) Obtain confirmation from the spouse that they wish the solicitor to act for her in
the transaction.
d) Advise them on the legal and practical implications of the transaction.
e) The solicitor should then provide an explanation of the nature of the documents,
the practical consequences for signing them and warning of the risks involved.
• Conveyancing: The process of transferring the ownership of a property.
• Two stages in conveyancing: Exchange of contract and completion.
• Caveat Emptor: Buyer beware. The seller is not obliged to disclose information
about the property, other than about limited matters of title, and would not be liable
for any defects in the property which later come to light.
Pre-Contract Stage
Both Solicitors:
• Check for conflicts of interest.
• Obtain client signature to the contract.
Seller’s Solicitor:
• Take instructions from the seller client.
• Investigate title and produce evidence of title (deuce title) to the buyer.
• Check whether there are any encumbrances that will prevent the buyer from
using the property as they intend.
• Reply to the buyer’s pre-contract enquiries.
o Any incorrect information provided by the seller can give rise to
misrepresentation.
• Draft the contract.
Buyer’s Solicitor:
• Take instructions from the buyer client.
• Investigate title.
• Raise pre-contract searches and enquiries and check buyer client has
commissioned survey.
o Solicitor may want to carry out additional enquiries e.g., boundaries, access,
disputes, outgoings and previous work carried out at the property.
o Solicitor will also carry out pre-contract searches of statutory, public and
private bodies to obtain more information about the property.
,• Approve draft contract.
• Prepare pre-exchange report to client.
• It is important that buyer’s solicitor is satisfied with the title before exchange of
contract, once exchanged, the buyer usually cannot raiser further enquiries on
the title if ‘requisitions’ provision is included.
Exchange of Contract
• Exchange of contracts is not compulsory, but it fixes the completion date and
gives the buyer time between exchange and completion to make their final
preparations.
• The contracts record the agreed terms. Parties are not bound to the transaction
until contracts are exchanged.
• Exchange of contracts and completion can take place simultaneously.
• Buyer will usually pay a deposit. Typically, 10% of the purchase price.
Pre-Completion Stage
• The time in between exchange and completion.
• Time to make sure that all the correct documentation and completion money is
available on the completion date.
• Transfer deed will need to be prepared and executed
Seller’s solicitors:
• Approve the draft transfer deed.
• Reply to the buyer’s pre-completion enquiries, including giving an undertaking to
discharge seller’s mortgage.
Buyer’s solicitors:
• Draft the transfer deed and mortgage deed, if acting for the lender and obtain
client execution of mortgage deed.
• Raise pre-completion searches and enquiries, e.g., check whether information
obtained at pre-contract stage remains valid and there will be no problems
registering the buyer’s title at the Land Registry. If also acting for lender, check
buyer’s solvency.
• Submit report on title or certificate of title to lender and request mortgage
advance.
Completion
Completion is the stage when the bulk of the purchase money is paid to the seller
and the transfer deed is completed to transfer the property to the buyer.
Post-Completion
Seller’s solicitor:
• Ensure that any mortgage the seller had is paid off and removed from the title.
Buyer’s solicitor:
,• Buyer’s solicitor must ensure that Stamp Duty Land Tax (England) or Land
Transaction Tax (Wales) is paid on the transfer.
• Buyer’s solicitor must register their client as the new owner of the property and
register any new mortgage over the land.
Both sides must finalise the administrative matters.
The Law Society Conveyancing Protocol
Purpose:
• A set of standardised procedures for residential conveyancing (buying and
selling homes).
• Aims to ensure consistency and efficiency across firms.
Scope: Residential conveyancing only (not commercial).
Content:
• Gives step-by-step guidance to solicitors on how to conduct a residential sale
and purchase.
• Accompanied by standard forms issued under the TransAction brand e.g., TA6
Property Information Form which is standard pre-contract enquiries form for
freehold properties.
Connection to the Conveyancing Quality Scheme (CQS)
• Law Society’s CQS requires firms to follow the Protocol.
• CQS membership is essential for firms to act for major mortgage lenders.
• Also involves a Client Service Charter and mandatory training.
Professional Conduct
Acting for Seller and Buyer
Acting for buyer and seller is governed by paragraph 6.2 in The Code of Conduct.
• Subject to certain exceptions, a solicitor cannot act for both parties if there is a
conflict of interest or a significant risk of such a conflict.
• There is a high risk where the land is being transferred for value.
• Exception:
o Where the parties have a substantially common interest in relation to the
matter. But a common interest does not apply to a property purchase.
o Clients are competing for the same objective. Solicitor could act for two
buyers who are competing against each other to buy a property but does
not for a seller and buyer situation.
Acting for Joint Buyers
, • Usually acceptable to act for joint buyers, as long as comply with paragraph 6.2
of the Code of Conduct.
• It may be necessary to advise residential buyers separately about how they want
to hold the equitable interest.
Acting for Borrower and Lender
• Acting for a lender and borrower is possible, unless there is a conflict of interest
or significant risk of such a conflict (paragraph 6.2)
• Risk is high if:
o The mortgage is not a standard mortgage of property to be used as the
borrower’s private residence.
o The mortgage is a standard mortgage, but you do not use the approved
certificate of title.
• Paragraph 6.2(a) substantially common interest exception applies:
o Both clients have given their informed written consent.
o Effective safeguards have been put in place to protect any client confidential
information.
o The solicitor is satisfied that it is reasonable for them to act for both clients.
• Paragraph 6.3 Duty of confidentiality to one client might conflict with the duty
of disclosure to another client.
Acting for Joint Borrowers
• It is usually acceptable to act for joint borrowers, provided no conflict of interest
exists or likely to arise (paragraph 6.2).
• There may be a problem where a matrimonial home is owned jointly by a married
couple and one of them agrees to mortgage it as security for a business loan. If
the business fail, the spouse may then try to have it set aside on the basis of
undue influence.
Etridge guidelines for solicitors acting in these circumstances.
The lender should, with the borrower’s consent, provide the solicitor with the
following information:
a) The purpose for which the loan is being made available.
b) The current amount of the borrower’s indebtedness.
c) The amount of the current overdraft facility.
d) The amount and terms of the new loan.
e) A copy of any written application made by the husband for the loan.
The solicitor should then:
a) Explain to the spouse the purpose for which the solicitor has become involved.
b) Explain that the lender will rely on the solicitor’s involvement to counter any
suggestion that the spouse had been unduly influenced or has not fully
understood the nature of the transaction.
c) Obtain confirmation from the spouse that they wish the solicitor to act for her in
the transaction.
d) Advise them on the legal and practical implications of the transaction.
e) The solicitor should then provide an explanation of the nature of the documents,
the practical consequences for signing them and warning of the risks involved.
