This note is prepared to provide guidance to clients who are purchasing shared ownership properties with our assistance. It is intended to be a guide not as to the legal aspects, on which we will report during the transaction, but as an outline of the procedure. We stress that it is only a guide and there can be significant differences on particular transactions.

We are normally informed of a transaction by the client but sometimes we receive this information from the housing association. If that is the case and we have not heard from the client we will contact you before taking any action on your behalf. At the time instructions are confirmed we will give you an estimate of the costs, VAT and disbursements that will be payable. This estimate is a guide and if a transaction is unusually complicated or there is an abortive purchase our fees will be higher than the estimate. As and when this becomes apparent we will give you a revised estimate. We will charge for abortive work on the basis of the time spent. Hourly rates are given in our firm information sheet. The costs and other disbursements are payable at completion except for the local authority search fee which is paid to us when you want us to submit it.

When you have confirmed instructions we will write to the seller’s solicitors to ask them to provide us with a draft contract and supporting papers. When we have received supporting papers it is customary to carry out a search with the local authority to make sure that there are no adverse entries in respect of the property. Save in exceptional circumstances this search does not give any information regarding the area or adjoining properties. For example it will not reveal whether an application has been made for planning permission to re-develop a nearby open space. If any such factors are important please discuss them with us and you may be able to obtain further information from the planning or other department of the local authority. A separate search has to be made with the water company to obtain information regarding the water supply, drainage and sewerage. In built up areas it may not be necessary to make such search. If you require one please let us know and there will be an additional fee payable.

The solicitors for the sellers will provide us with a draft contract, evidence of the title, a copy of the lease and property information, fixtures and fittings forms and information regarding service charges. We will review the documentation, make any additional enquiries that you or ourselves consider are necessary, and then report to you on the legal aspects of the transaction.

This process should be completed within four weeks of receiving the initial instructions. However this does depend on factors outside our control, for example how quickly papers are provided by the seller’s solicitors and how long it takes the local authority to process the search. If you are obtaining a mortgage offer, this needs to be approved by the landlord before the transaction can proceed. If you do not wish us to do any work on the transaction before you have obtained a mortgage offer please let us know.

When you instruct us to proceed we will require from you the signed contract and a cheque or bankers draft in our favour for the deposit that is payable on exchange. Normally this is 10% of the purchase price but a lower figure can be agreed. We will approve the contract, which is sent to us in duplicate, and return one part to the seller’s solicitors. They will arrange for it to be signed by their client. The exchange of contracts is agreed between ourselves and the seller’s solicitors on the telephone. When you are ready to proceed we recommend that you discuss with the sellers, either directly or through us, the date on which it will be convenient to complete the transaction. The actual completion date is agreed when we exchange contracts. Once you have authorised us to exchange and we have either exchanged or released the contract to the seller’s solicitors you cannot withdraw from the transaction. If you do not complete the purchase on the agreed date you will have to pay interest at 4% above base rate from the agreed date until the date of actual completion. If you fail to complete within 10 working days of service of a notice to complete by the seller’s solicitors the deposit will be forfeited and you will have to pay damages to compensate for any loss that the seller suffers as a result of your breach of contract. It is, therefore, of fundamental importance that contracts are not exchanged unless you are certain that you are in a position to complete the contract.

Please note we are required to obtain evidence of your identity before we can proceed to draw down a mortgage advance and we will ask you to bring with you such evidence with you when you sign the mortgage papers. Normally a valid passport will be sufficient.

After exchange has taken place we will draft the transfer for approval by the seller’s solicitors and signature by their client, carry out pre-completion searches, report to the lender to obtain the mortgage advance and prepare mortgage documents for your signature. You should make arrangements with the gas, electricity and telephone companies for the supplies to be changed into your name on completion and notify the local and water authorities when your completion has taken place so that the council tax and water charge will be transferred to you. Some of the bills such as ground rent and service may have been paid in advance by the seller and if that is the case you will have to refund the appropriate proportion so that the amount required on completion may be slightly more than the purchase price. As soon as we have been given the exact figure by the seller’s solicitors we will prepare a completion statement showing the amount required to complete the purchase, inclusive of our costs and disbursements, and giving credit for the mortgage advance and deposit. If you intend to let us have the balance by a personal cheque it is essential that we receive it at least seven days before completion so that we have time to clear it. This is not because we doubt the cheque will be met but because we must have cleared funds in our client account before drawing on it to complete the matter. If completion is delayed through no fault of the sellers you will be liable to pay interest.

If two or more people are purchasing a property it is possible for the legal ownership to be taken by one or more of them and what is called the beneficial ownership can be shared in the same or a different way. In particular, they can be either joint beneficial tenants or beneficial tenants in common. There is a vital distinction between the two in that on the death of a joint beneficial tenant his or her interest passes automatically to the other tenant(s) whereas the interest of a beneficial tenant in common passes in accordance with his or her will or on intestacy. In the case of tenants in common the transfer should state in what proportion the tenants hold the beneficial ownership which does not have to be in equal shares. In the case of a joint purchase we need instructions as to how you wish to own the property.

On the completion date the money will be paid to the sellers solicitor’s and you will not be involved in that aspect of the transaction. The money is generally sent to them through the bank transfer system and it can take several hours for the money to pass from one bank to another. The seller’s solicitors will not authorise the release of the keys until their bank has actually received the money and you should not, therefore plan to arrive at the house too early in the day unless we have checked with the seller’s solicitors that you and your removers will be allowed access. The keys will normally be held by the seller and will be handed over in person at the premises. In some cases the keys will be held by the seller's solicitor or by us and will be collected by you after completion has been confirmed.

After completion has taken place we will stamp the transfer and register the purchase and mortgage at the Land Registry. That normally takes two months to complete and once it has been done the title deeds will be sent to your lender. Copies will be sent to you.

If you have not already done so, you should seriously consider making a will to ensure that your property and other assets pass to those whom you wish to benefit. We shall be pleased to advise and provide an estimate of the cost.

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