Conveyancing In 2020 – What Unwelcome Surprises Might I Face?
Conveyancing In 2020
When you buy a property, whether it be your first or just one of many, there are a number of issues that may arise surrounding the conveyancing process that throw a spanner in the works. To make you aware of the nasty surprises that could be lurking around the corner, we have put together a list of potential hiccups that buyers and sellers face during property transactions. We aim to illustrate how important it is to compare conveyancers and to choose one who will avoid the issues listed below. Getting a conveyancing quote could not be easier.
A rentcharge is a legal interest in land. They are historic and usually mean payment of a small fee. Rent charges should be registered at the Land Registry with their own title and noted against the title affected (LRA 2002, s.3). Once registered it is binding on all future owners of the land.
Although the Rentcharges Act 1977 prohibited the creation of new rent charges, there are thousands of historic rentcharges still circulating. These will continue until 2037after which they will cease to exist. It is possible under the Act for the owners of land subject to a rentcharge to compulsorily require the rent owner to ‘redeem’ the rentcharge, in other words, finish it upon payment of a sum calculated according to a legal formula.
A second type of rentcharge called an ‘estate rentcharge’ which is designed to make positive covenants in freehold land binding on successive owners. These are allowed and will remain enforceable after 2037. Although the sums are small (sometimes just a few pounds), payments must be made or else the property/land can be seized. Although rare and the majority will become extinct by 2037 anyway as the Rent charges Act 1977 has failed to deal appropriately with estate rent charges.
People have been charged hundreds for failing to pay estate rent charges. Remember to factor this in and ask the appropriate questions when you compare solicitors quotes.
Restrictive covenants are conditions written into a property’s deeds or a contract by the seller. They are binding on what a homeowner can or cannot do with their property or land, under particular circumstances. They are very common and can prohibit certain uses and/or limit particular alterations or developments. They can prevent buildings or other substantial structures from being erected on a section of land or prevent trades or businesses from operating there.
Restrictive Covenants must be flagged by conveyancing solicitors so that their clients are aware and do not breach them. Also, conveyancing solicitors should consider any recent developments made and confirm that restrictive covenants were not breached previously. If this is not done, huge costs can be incurred.
Sometimes, covenants are created to uphold certain standards for local/neighbouring residents. Housing developers and property management companies often add restrictive covenants on the transfer deeds to prevent owners undertaking work or conducting other practices which could impact negatively on the neighbourhood. This includes actions which undermine a desired level of ‘uniformity’ and/or maintenance.
This can mean anything from prohibiting the erection of a conservatory or elaborate fascias to the front of the house to parking a caravan or mobile structure in the front garden, keeping fowl or allowing a garden to become unruly and unkempt.
An important thing to remember about restrictive covenants is that they ‘run with the land’ which means that they apply to all future purchasers, not just the first to whom encounters it. If you are buying a house, it is imperative that your conveyancing solicitors examine the property deeds thoroughly and flag any covenants before you continue with the transaction.
If you breach a restrictive covenant, knowingly or otherwise, you could be forced to undo any work (such as an extension!) and/or pay a fee (often running into thousands of pounds) facing possible legal action. If a property owner has breached a covenant for over 12 and subsequently decides to sell the property, they should get restrictive covenant insurance to protect what they have done.
Conveyancing solicitors are responsible for highlighting covenants. If they miss one you can complain to the Legal Ombudsman and they could be forced to pay compensation but only up to £50,000. Depending on the covenant breached, you could owe much more than this.
If you think the property you wish to buy might involve restrictive covenants, mention it when you compare conveyancers and see what they say.
Chancel repair liability is an antiquated requirement for certain homeowners to contribute towards the cost of repairs to a nearby church. This can often be expensive. Conveyancing solicitors must check whether the local parish includes a church where such a liability may apply as repair bills can run into hundreds of thousands of pounds. Buyers will want to make sure the property they are buying is not affected.
The basis for this liability rests on law dating back as far as Henry VIII, though the courts have recently decided that churches do still have the right to enforce payment from the owners of affected homes, even if no demands have been made for many years.
Conveyancing Solicitors should carry our chancel repair liability searches as a matter of course. When you compare solicitors quotes, remember to ask about chancel repair and ask if searches will be made as a matter of course.
Community Infrastructure Levy or ‘CIL’
CIL is a levy recovered by the planning authority. It was first introduced as a planning charge under Part 11 of the Planning Act 2008 and applies to the creation of new floor spaces exceeding 100 square metres of net internal area at fixed rates.
The value of the CIL payment charged depends on the type (residential or commercial) and the location of the development. It is charged by the authorities who prepare local development plans. Before CIL can be applied to development plans, a charging authority must first have issued a charging schedule to lay out the applicable rates of CIL and outline the possible exemptions and relief programmes from the CIL.
It is governed by a complicated set of regulations and where planning permission is granted, liability for payment of CIL can be triggered. CIL can be a significant fee though not all local planning authorities seek to recover CIL. That said, the majority do. For the majority of homeowners however, CIL will not be an issue. If you think CIL may apply to a property purchase you intend to make, bring it up when you ask your law practitioner for a conveyancing quote.
In order to avoid falling into any of the numerous pitfalls when buying a property, you should compare solicitors quotes before deciding on a practitioner. We advise you compare conveyancers from several legal firms and compare several solicitors quotes before making a decision on who to use. You can get a conveyancing quote by using our online conveyancing solicitors comparison tool.