Getting the legalities of your new home purchase right

In conversation with Lorraine Richardson and Stu Forsdike from Conveyancing Matters.

Legal advice is an essential part of buying a home. Although The Consumer Code for Home Builders sets requirements that help protect you when you buy a new build home, it is no substitute for legal advice, and you should always have input from a solicitor or licensed conveyancer.

We caught up with solicitor, Lorraine Richardson and licensed conveyancer, Stu Forsdike, for the lowdown on what home buyers need to know about legal support when buying a new home. In addition to supporting clients, Lorraine and Stu run a YouTube channel called Conveyancing Matters to help the industry stay up to date with latest trends and requirements, so they’re ideally placed to offer insight and help explain what support you need, when.

It’s worth noting that there are some differences in how the legal system works in Scotland and Northern Ireland. This post focuses on England and Wales, but we’ve highlighted where different requirements may be in place for other parts of the UK.

Can you explain the difference between a solicitor and a licenced conveyancer? 

A licensed conveyancer is a qualified, professional property lawyer who specialises in the legalities of buying and selling property in England and Wales. Licensed conveyancers can run their own firms and are regulated by the Council for Licensed Conveyancers (a member of the Consumer Code for Home Builders Advisory Forum). Licensed conveyancers do not operate in Scotland or Northern Ireland.

A solicitor is a professional qualification which allows lawyers to work in all areas of practice, but individuals tend to specialise in one area, such as conveyancing. In England and Wales, solicitors and their firms are regulated by the Solicitors Regulation Authority, while Scottish firms are regulated by the Law Society for Scotland and firms in Northern Ireland are regulated by the Law Society for Northern Ireland.

Both solicitors and licensed conveyancers must have professional indemnity insurance in place to protect the public and both must follow professional codes of conduct.

If you are buying or selling a home, you can use either a solicitor or licensed conveyancer (in England and Wales) to do the legal work for you, including dealing with your mortgage lender (if you have one) and to deal with the transfer of title. 

What should home buyers consider when choosing a legal adviser for their home purchase?

It’s understandably tempting to focus solely on the cost of the legal fees. However, home purchases are major, complex, and often emotive purchases and it’s essential that your professional adviser meets the needs of your situation. It’s important to consider:

• Recommendations: Asking a trusted friend or family member to recommend someone they have used previously.
• Location: Whether you are happy dealing with someone mainly over email or would you prefer a local firm you can visit?
• Expertise: If the professional adviser is competent to deal with your type of transaction. Some advisers don’t take on leasehold contracts or new build work so won’t be able to help if you are purchasing a new build flat, for example.
• Availability: Whether your professional adviser has the capacity to deal with your transaction. If they are too busy to return a phone call or email they might not be the best choice.
• Costs: All solicitors and licensed conveyancers in England and Wales are obliged to put their legal fees and costs for conveyancing on their website (it is encouraged in Scotland and not a requirement in Northern Ireland). Aim to speak to more than one professional adviser to clarify exactly what is included in the legal fees and whether there are any hidden extras.

In your experience, what are the most important aspects of a house sale that require legal input?

All of it! There is no such thing as a ‘simple’ conveyancing transaction. In particular, the title to a property can be complex, and it is important to ensure you get proper legal advice.

It is also essential that your legal adviser can deal properly and promptly with any mortgage offer and lender.

Are there any common pitfalls in a house purchase? If so, what can buyers do to avoid them?

Delays are a common problem and are stressful for everyone. You can reduce the likelihood of this by:

• Picking your professional adviser carefully using the advice above. Cheap doesn’t necessarily mean quick.
• Getting your financial paperwork organised. Recent changes mean your professional adviser must complete a lot of checks to comply with money laundering regulations. Your professional adviser will need to see evidence of the source of your funds before they can progress your purchase.

How do purchases of new build homes differ from second hand homes from a legal/process perspective?

One of the main differences is that the home itself is often not complete by the time you commit to purchase. Sometimes there are outstanding planning issues, and you may not have a mortgage in place at the time of exchange. Developers often want to exchange quickly which can add to the time pressure.

Instructing a legal adviser with experience in new build work will help the transaction progress in a timely manner and enable your adviser to protect you in the contract as much as possible.

What should home buyers look out for when it comes to leasehold properties or those with estate management arrangements?

Leasehold arrangements can be complex so it’s important to understand what you are buying and work with a professional adviser that is experienced in these issues. Some properties with cladding are impacted by the Building Safety Act, for example, while the standard of managing agents can also impact the timeframes for buying leasehold properties. Developers may also be reluctant to make changes to an existing lease which is where experience in handling these matters can be crucial.

Freehold properties with shared services, such as play areas, often involve complex arrangements to secure service charge payments. This needs to be understood by your legal adviser so they can advise you properly.

Property lawyers cannot put every problem right – but they can ensure their clients understand the issues and risks by giving proper written advice.

How important would you say codes of practice like the Consumer Code for Home Builders are in protecting consumers during their house purchase?

The Consumer Code for Home Builders is very comprehensive and includes protection against high pressure selling as well as ensuring consumers are given clear information about exchange and anticipated completion dates. 

The independent dispute resolution service to help resolve disputes is particularly valuable, especially for problems that surface after the purchase.

Is there anything from a conveyancing perspective that you would like to see covered by codes of practice which isn’t already in place?

We’d like to see greater awareness of the Code among legal advisers so they can make full use of the requirements in supporting their clients.

Although not directly related to the current scope of the Code, we believe managing agents need to be better regulated and there needs to be effective enforcement. It would be good to see some of the learning from the new homes codes sector, together with expertise from the Code’s Chair, Noel Hunter OBE and his colleagues, applied to this important area.

About Conveyancing Matters*

Lorraine Richardson and Stuart Forsdike are experienced property professionals. Lorraine is a solicitor, legal trainer and has her own company, Adapt Law Limited*. Stuart is a licenced conveyancer and is the Senior Partner of the law firm, PCS Legal*.

Stuart and Lorraine have been publishing a YouTube chat for over 5 years called Conveyancing Matters. The purpose of Conveyancing Matters is to talk about a wide range of property related matters with particular focus on conveyancing practitioners. In addition to talking to guests from the property industry and regular news bulletins, Lorraine and Stuart also include chats on technical conveyancing content together with opinion pieces and discussions on topical issues of relevance to conveyancers.

* This article contains reference and a link to Adapt Law, PCS Legal and Conveyancing Matters because we believe the information may be useful to home buyers. This does not imply endorsement from the Consumer Code for Home Builders of Adapt Law, PCS Legal and Conveyancing Matters or their services. Other providers may offer similar information and services.