Buying
your Council Home - What Happens?
This guide contains some very important information about the procedures and implications of buying a property. Please read it carefully.
THE MECHANICS - There are two stages:
Stage One "Going through Paperwork": I will receive various papers to do with the property and also a mortgage offer. I have to read through all papers received and submit the necessary searches. Stage Two "Completion" the day when the property becomes yours.
STAGE ONE
Before I can go to Stage Three I must do the following:
1. Paperwork
It is the Council’s solicitors who prepare the bundle of legal papers. Until these are received I cannot commence my work. Once received I must make sure that all the paperwork is in order.
I will check to see if there are any restrictions or matters affecting the property and let you know about them.
2. Searches
1. I must undertake a Local Search and check the result is clear. This will show up obligations of a public nature which are enforceable against home owners, eg road widening schemes, compulsory purchase orders, tree preservation orders, breaches of planning law etc. This Local Search only relates to the property you are buying and not to any adjoining or neighbouring properties, so if you have any queries about this aspect of your purchase, you should contact the local authority directly. Neighbours' planning applications, for example, will not be revealed in the Local Search. Occasionally these factors can affect the value of the property and you are well advised to make these enquiries, as it does not form part of my normal work.
2. I may have to undertake a Water Search to check the drainage arrangements of the property in areas where the Local Search does not contain this information or there is a doubt that the property is connected to mains drainage and sewers. If you have any doubts please let me know.
3. Environmental Searches
We must warn you of the potential hazard of buying a property built on contaminated
land. We can undertake an Environmental Search (for £23.50 inc VAT)
and can offer added protection of insurance. See our enclosed information
sheet for more information.
A negative response to the standard local authority enquiries from the local authority may merely mean the site has not been inspected. It does not necessarily mean there is no problem. Compliance can be costly, and may result in expenditure which would exceed the value of the property.
3. Planning
It is unlikely that I will have the opportunity to actually view the property. Please let me know if the property has, to your knowledge, ever been altered or extended. I can then check that planning permissions and building regulations were obtained and ensure no breach of any restriction has occurred.
If you intend to extend, alter, develop or redevelop please let me know.
I shall assume that you intend to use the property as a private residence for your own occupation. If you have any other use in mind please let me know.
4. Mortgage Offer
I must make sure you have a mortgage offer and check that it does not contain any unacceptable conditions.
You will receive a written offer directly from your building society or bank. I must also receive written instructions from your lender before you are able to complete.
You must, of course, make sure you have enough money over and above your mortgage to buy the property and allow for legal fees, VAT, stamp duty and Land Registry fees.
5. Survey
You should have a survey undertaken.
You may wonder what the difference is between (i) a Valuation, (ii) a Valuation and Survey and (iii) A Building Survey (once called a structural survey):
1. A Valuation
This is a very simple inspection of the property and is a minimum requirement to obtain a mortgage. It will give a very limited inspection of the property and is not in any sense of the word a survey. It will confirm to the lender that the property is worth sufficient to cover their mortgage.
2. A Valuation and Survey
This is usually known as a RICS Housebuyers Report and Valuation and will advise on value as well as giving you a more detailed report on the condition and state of repair of the property. Minor items of disrepair which do not materially affect the value will not be reported.
3. A Building Survey
This is a very comprehensive survey of all parts of the property, going into much more detail than the ordinary survey. It does not normally include advice on price. This type of survey may be more appropriate for a larger, older property or non standard buildings or buildings of a commercial nature. It costs more than a simple survey.
It is of course, up to you which option you choose to take but you should
remember that the risk is entirely yours when buying a property and that
if it does have any defects, you will be unlikely to have any come back
against the seller. In view of this you are strongly recommended to have
a valuation and survey (option number (ii) above) undertaken at the very
least. Your lender's
surveyor can be used, and you will need to tell the lender of your requirements.
You can of course instruct your own surveyor and sometimes this is preferable.
You will however, still have to pay the lender's valuation. The advantage
of an independent survey, not linked to your mortgage, is that the result
will not affect your mortgage offer. Any defects revealed may be rectified
by you as and when you choose. Where however the surveyor instructed by
your lender finds defects, inevitably it will become a condition of your
mortgage offer that you rectify these defects quickly. Sometimes they may
even retain monies from your loan until the works have been done.
I can give further advice on this and you should feel free to discuss it with me, if you are in any doubt what to do.
You should also be aware that it is up to you to check such matters, as the working of the central heating system, the plumbing, the wiring etc, since you have to foot the bill if you discover problems after completion. Services are not usually tested as part of the valuation and survey. Also, bear in mind that using your lender’s surveyor may limit your rights to in negligence if something is missed. The law may take the view that only the lender can sue - as technically they instructed the surveyor (even though you paid the fee). An independent surveyor appointed by you can be sued directly for negligence.
6. Buildings Insurance
You must insure the property you are going to buy at completion If you are having a mortgage and your lender is arranging your insurance you need not worry about this. Also with most leasehold properties the landlord takes out insurance. If however, you have no mortgage, or you are arranging your own insurance, you should give me full details of the policy at an early stage. It will be left to you to start the insurance, unless you instruct me otherwise.
7. Life Assurance
If you are obtaining an endowment mortgage, you will need to make sure that your life policy is capable of starting as soon as possible. You should give me full details of the life policy well before completion. You should make sure that you have "Acceptance Details" from the life company at an early stage. This often causes delays and is something I advise you to pay particular attention to early on.
8. Signing the Papers
I will ask you to come into the office to go through the paperwork and sign the papers.
9. Other Occupants
You must let me know if anyone else will be living at the property with you since your lender will need notifying and a Form of Consent will need signing, before completion. The occupier may need to see another solicitor for independent advice. I will let you know if this applies.
10. Identity
These days the lending institutions insist that I verify your identity
and address.
Please bring with you at our meeting your passport and some bills bearing
your name and home address. Often a driving license is not sufficient for
identity purposes it should be something bearing a photograph.
11. Completion Date
This is the date:
* You pay the balance of the purchase money
* The house is legally yours.
The Council may only complete on a certain day, eg Cambridge City Council only complete on Mondays.
You must your rent up to the date of completion. If you have a rent book this must be handed to us before completion.
You should bear in mind that I will usually need at least two weeks between Stage One and Stage Two, to complete the paperwork, do further searches, get documents signed and obtain your mortgage monies etc. It is important to check with your lender before agreeing a date, since sometimes it is better to complete at the end of a month to avoid extra mortgage repayments in the first month. Some lenders for example ask for a mortgage payment straight away after your completion date.
You should also ensure that your balance (including fees) is available for the agreed date. I will need cleared funds so allow time for this.
Completion cannot take place at weekends or bank holidays, since the banks are not open then (and neither are we!).
STAGE TWO
This will inevitably follow after Stage One. I will tell you what else you need to do at that stage.
GENERAL INFORMATION
Wills
Now is a very good time to consider making a Will if you do not already have one. You will come into the office to sign the contract anyway so why not make a back to back appointment with Louis Browne and kill two birds with one stone! You will find our fees very competitive.
Joint Ownership
If you are buying the property with one or more people you will find a separate sheet enclosed telling you the options open to you as to legal ownership. This can have significant consequences so please read this carefully.
AND finally, remember I am here to help you and should always keep you well informed. If at any time you feel you are not receiving a quality service please let me know immediately.