The process of buying a flat is slightly different to that of buying a house. This factsheet outlines the process so you have some idea of what to expect.
When you are buying a Flat, you will be buying a Lease. This is because a Landlord or Freeholder will usually own the Land and Building in which the Flat is situated. You should check with the selling Agent how long is remaining on the Lease term. Most Lenders require there to be more than 55 years left on the Lease. If there is less, you may have difficulties selling the property in the future. Before you proceed, you should always discuss with us.
You should also check with the selling Agent how much ‘ground rent’ the Seller is paying to the Landlord/Freeholder and whether this is likely to increase. You should also check to see how the Building itself is maintained and whether there is a ‘service charge’ or ‘maintenance fee’ paid and what items of expenditure the charge or fee covers. We can check these specific matters for you but you need to make sure you can afford to pay these extra payments before you put in your offer. There are a number of ‘hidden’ charges when you purchase a Flat and we will be happy to discuss these with you and provide you with a written quotation.
If you have made an offer through a selling Agent, they may request from you a "holding deposit" to evidence your goodwill. However there is no legally binding agreement on you or the Seller at this stage and paying this deposit does not mean that the Seller will not withdraw or consider other offers on the Property. If you pay this you should make sure you obtain a receipt that is marked "subject to contract". This will mean that, if the Seller or you withdraw from the transaction, you will be entitled to a refund of this deposit.
Check the property - and the area
There are a number of matters you need to address at this stage. If you are obtaining a mortgage, the Lender will only normally obtain a valuation respect of the property and you should consider whether or not you require a full survey to be obtained. See Valuation, Inspection or Survey? for more information. Any valuation report obtained by the Lender will only inform the Lender that the property is good for the amount of your loan and does not provide you with any protection in relation to the physical condition of the property. Whether or not you have a survey carried out, you will be deemed to have fully inspected the property and accept it in the condition it is in. Accordingly, if any subsequent defects are discovered, you will have no recourse against the Seller. This also includes any fixtures and fittings included in the purchase price or purchased as a separate agreement with the Seller.
If you are not already aware of the locality in which you are purchasing, we also suggest that you make enquiries or visit the area to satisfy yourself regarding the proximity of any public houses, schools, commercial property, etc. The searches and enquires made by us do not include the surrounding area.
Preparing the paperwork
The next stage is that we receive paperwork from the Sellers solicitors including a form of contract, proof of the Sellers title and forms regarding the property and any items of fixtures and fittings. We will then raise any enquiries which we may have, or which you raise with us, with the Sellers solicitors, including enquiries of the Landlord/Freeholder. We implement a local authority search, a drainage enquiry and, in mining areas, a coal authority search. We do not normally undertake any additional searches (including environmental searches) unless you particularly ask us to do so or we contact you to inform you that additional searches are considered necessary in view of the location or type of property you are purchasing.
Once we are satisfied with the legal aspect of the transaction and we have received results of all of the searches, including a satisfactory mortgage offer if you are obtaining mortgage finance, we will then need to see you to discuss all of these aspects with you, and make sure you fully understand the terms of the Lease. This is so that we can be sure you understand the paperwork and are entirely satisfied. If it is not possible for you to call into the office for any reason, we can deal with this through the post and send you a full written report but, as this is likely to be lengthy, we would prefer to see you personally if possible.
Generally, throughout this stage of the transaction, we aim to contact you on a regular basis to keep you fully informed of progress. Please note that this process is likely to take approximately 6-8 weeks, depending on the circumstances of your purchase. It is important to us therefore, that you feel relaxed about getting in touch with us at any time to discuss any problems or concerns which you have regarding the property or if you want to know what is happening.
Agreeing a completion date
Before contracts can be exchanged, a completion date will need to be discussed and agreed with all parties involved in your particular "chain" of transactions. Do not try to arrange your completion date too quickly as this only leads to disappointment if there are any unexpected delays or if a party in the chain cannot meet such date. Also, in view of the fact that contracts are not legally binding, it is possible for a "link" in the chain to withdraw or fall through before contracts are exchanged. Because of this we do not recommend that you serve notice on your Landlord, if you are renting, or make any removal arrangements until you hear from us that everyone in the "chain" has agreed a completion date.
Paying the deposit
As Buyer, you will need to pay a deposit at exchange of contracts. This is normally 10% of the purchase price (less any deposit you may have paid to the Estate Agents). It is sometimes possible for us to agree a reduced deposit where you are having a mortgage of more than 90% but this is subject to the Seller’s agreement. We do need to know at an early stage if your mortgage is more than 90% of the purchase price. We will normally ask you to bring your deposit with you at the same time as signing the contract paperwork. However, please note that these funds must be cleared through the bank system before contracts can be exchanged and if you need to use the deposit immediately, a building society cheque, bankers draft, or telegraphic transfer will be required. Please do not hesitate to contact us to discuss this point further or see our terms of business regarding clearance times and our Bank details.
Also, at the time you sign the contract, you are still not legally bound by the terms of it until contracts have been formally exchanged between respective solicitors. At this time, a completion date will need to have been agreed by all parties and your cleared deposit monies will need to be available.
After exchange of contracts
Once contracts have been exchanged, we will prepare the necessary transfer and mortgage documentation and arrange for your signature of this. We will need to carry out final searches against the property and will need to apply to any Lender for your mortgage advance. We will also need to receive from you any balance of the purchase price, together with any fees and other expenses which are payable by you. You will be responsible for paying the Ground rent and any service charge or maintenance fee from the date of completion. We will endeavour to provide you with a completion statement at an early stage.
Completion
You will now need to make your final arrangements to move in, to confirm any removal requirements and arrange for the collection of keys. We cannot guarantee what time of day completion is likely to take place, especially if you have a linked sale and the sale monies are awaited before we can proceed with your purchase.
We would suggest, as a rule of thumb, that completion is likely to take place in the early afternoon. We will, of course, keep you informed of progress generally on the completion day and you should contact us if you have any concerns.
We suggest that you make arrangements to read all of the meters at the property, to inform the relevant authorities that you are the new owner and you should consider changing the locks at the property for your own security and peace of mind. We will conclude the transaction by paying the purchase price to the Sellers solicitors and, in return, will receive the formal documentation and Title Deeds for your new property. Although, at this point, the house is now yours, we will still need to carry out additional administrative work including payment of any Land Tax and registration of your title. Once the property is registered in your name, we would normally send a copy of your Title Deeds to you for your information or they can be retained by us for safekeeping.
