Buying a house with loft conversion without building regulations

It is not uncommon for people to only become aware that the houses they are buying come with loft conversions without building regulations when obtaining the local authority search. This often comes up during the process of conveyancing. This may cause primarily three issues:

buying house with loft conversion

  • The loft conversion might be inhabitable.
  • The property’s worth my not match the matching price, more so if this loft conversion is inclusive of a bedroom.
  • You may not get a mortgage offer from a mortgage lender in case you want to get a mortgage.

In most cases, sellers create illegal loft conversions for purposes of value addition to the property while creating more living space. However, if the loft conversion does not meet the building regulations and doesn’t have a completion certificate, a seller and an agent don’t have the authority to market it as a bedroom.

If you buy a house with an illegal loft conversion will often pose a serious issue when buying a property with a mortgage. Before a mortgage lender signs off on a mortgage, it is required that they carry out a mortgage valuation. Sometimes the valuer may not accurately assess whether the sign-off on the loft conversion is correct, especially if they only believe the word of the estate agent and choose not to carry out any further assessments. It is during a legal enquiries stage that a buyer may discover that the mortgage valuation is technically inaccurate. This technicality often arises because the valuer overvalued the loft conversion as an extra bedroom.

However, if a mortgage lender becomes conscious of the fact that a buyer wishes to purchase a house with an unapproved loft conversion, the lender must persist that the purchaser either finds a building indemnity insurance or a regularisation letter. Furthermore, the lender can also instruct a structural engineer to survey the building to decipher if they it is safe. It is not atypical for a lender to abrogate a mortgage offer. This is done until they get an update on the mortgage valuation basing it on the market price. This priced is obtained from valuing a house that has an accountable number of bedrooms and an unauthorised conversion.

Cash buyers have the option of buying the property and choose not to take any action concerning the authorised works because the law allows it. In this case, the problem will be transferred to the new buyer when they look to sell it. In future, however, they may disprove any insurance of the buildings that they may claim on. Consequently, if the work is not safe, they easily risk possible disaster if the building collapses. The risk will possibly be uninsured too.

Is it possible to build a loft conversion into a habitable bedroom without getting a building control sign-off and informing the local authority?

 

A building regulations consent is necessary for the conversion of an attic or loft into a habitable space. Some of the issues the regulations cover are:

  • Safe fire escape.
  • Sufficiency of the new floor’s structural strength.
  • Rational sound insulation between the rooms below and the conversion.
  • The structure’s stability is not jeopardized (including the roof).
  • The new stairs to the floor are designed safely.

Non-compliance with your local authority’s building regulations may result in the local authority ordering for the taking down the conversion. If you refuse, they will alter the works and do it themselves and transfer the charge to you. They have the right to use this authority up to one year after the completion of the works.

Consequently, the contractor responsible for the installations will be liable for a fine. A local authority is vested with this power for up to 2 years after the completion of the work.

Is it possible to sell a loft conversion with no appropriate building control sign-off?

It is possible. However, it may work the whole process difficult, mostly if the buyer uses a mortgage because

  • A lender naturally downgrades the much they are willing to lend on the property when they discover if a significant portion of the building doesn’t have a building control sign-off. It easily causes a shortfall.
  • The lender might need a structural engineer to investigate the building if they suspect any sign the that the work is either dangerous or defective. This cost automatically falls on the buyer but. However, this buyer will expect you to reimburse part or all of the amount.
  • You are technically misselling if you don’t describe the conversion as a bedroom that is yet to receive a building control sign-off. At some point, this discrepancy will be noticed, if not by the estate agent or mortgage valuation, then by the local authority.

How to find out a loft conversion’s building control certification is lacking

 

This issue easily arises from any of these situations in chronological order:

  • If you wish to purchase a property but you notice something amiss with the loft conversion, particularly if it is designated as a bedroom, you can make enquiries to the local authority.
  • It can arise from a survey as a result of mortgage valuation and is present in a report after research by a surveyor.
  • A home buyers survey by a RICS surveyor may also pick up suspicions on the lack of a sign-off as they carry out their inspections.
  • The lack of supporting evidence or finding evidence by a buyer’s conveyancing solicitor in the local authority as they carry out investigations during legal enquiries.

How a letter of regularisation for may help you

This involves contacting the building authority that will arrange for an inspection to help you get the correct sign-off. The inspections can be intrusive. The sign-off is subject to making in modifications that you will be instructed to carry out.

Advantages of the letter

This helps you get the stamp of approval, which is a measure of ‘gold-standard’. This means that you now describe this conversion as a bedroom when you choose to sell. This also gives you peace of mind knowing that the conversion meets the fire safety standards.

Disadvantages

The process can prove to be expensive and may take a long time thus can collapse or disrupt your sale.

 

 How the buildings regulations indemnity insurance can help you

 

The insurance can cover the purchaser and mortgage lender against any possible financial losses in case any enforcement action is taken against them in future. In most properties, the premium is around £180 and £500 and it is usually a one-off payment done by a seller. In theory, a seller can refuse to make this payment, but it will only delay the sale.

Mortgage lenders often advice buyers to take out this insurance to cushion them if they notice that a house has an unauthorised conversion. The insurance cushions the buyer if the local authority chooses to carry out enforcement action.

However, there are certain things you should bear in mind:

  • This insurance doesn’t cushion you against the collapse of a loft conversion.
  • It only covers you against the enforcement action costs of the local authority. The authority has only a year to after completion to serve an enforcement notice (Section 36) and 4 years for a new property.
  • It is only granted if a survey is carried out by a RICS surveyor or structural engineer.
  • You will not be eligible for receiving this insurance if the local building authority already refused the offending works.
  • You can only receive the insurance if the house has been in use for at least a year.
  • You should not inform a third party of you move to take out this insurance because it will be invalidated.
  • You should get permission from the insurer in case you want to do any building works because the local authority will have to inspect your works. If it is unauthorised, consent may not be granted.
  • You won’t be insured if you already made enquiries from the local authority concerning the building sign-off.

One significant advantage of this insurance is that it will be cheaper than most other remedies and quicker to get. You can go on with your sale faster and the costs will be slightly lower too. A major disadvantage is that your conversion won’t be insured from collapsing.

How to get Building Regulations Indemnity Insurance

Your acting solicitor would normally arrange the indemnity insurance for you.

If you are buying a property with a loft conversion without building regulation approval, we would recommend that you get a home buyers survey as the RICS surveyor can raise suspicions if they think the conversion does not comply with building regulations.

How to Avoid Stamp Duty on Second Home

Since April 2016, owners of second homes in England and Northern Ireland will have to pay an additional rate of stamp duty. The rate applies to both leasehold and freehold properties, particularly those costing over £40,000. This is applicable whether you are purchasing the property outright or with a mortgage. You will also be required to pay the new Stamp duty rate even if the property in question is abroad. This extra rate of stamp duty also applies to individuals who only own a share in a second home. This article highlights everything that you should know about stamp duty on second homes, including who it affects and how it can be avoided.

Stamp Duty Second Homes

The Cost of Stamp Duty for Second Homes

The extra rate on stamp duty is a flat 3% levied on top of the current rates of all the properties worth more than £40,000. For example, if you are purchasing a second home selling at £200,000, then you will pay the 2% normal stamp duty charge plus the extra 3%. However, this rate does not affect the purchase of mobile homes, caravans, or houseboats. Here is a guide on the cost estimates of the stamp duty rates for purchasing second homes.

 

Property Value

 

Normal Stamp Duty Rate

 

Total Stamp Duty Rate after the Extra Rate

 

£1.5M and above

 

12%

 

15%

 

£925,000 to £1.5 M

 

10%

 

13%

 

£250,000 to £925,000

 

5%

 

8%

 

£125,000 to £250,000

 

2%

 

5%

 

£40,000 to £125,000

 

0%

 

3%

 

£0- £40,000

 

0%

 

0%

 

 

Take note that a delayed sale of one’s previous main residence after buying a new one is considered to be default possession of a second home. This means that failure to sell your first home within the first three years of purchasing a new property will see you pay the extra 3% stamp duty. This is because the property pending to be sold is still registered as your property.

Properties Exempted from the Extra Stamp Duty Rate for Second Homes

The extra 3% stamp duty rate due since April 2016 is levied on all second homes worth more than £40,000. However, there are a few scenarios where homeowners are exempted from paying the additional stamp duty charge. These cases include the following;

  1. When you are purchasing a houseboat, caravan, or any mobile home, regardless of their value.
  2. When you are purchasing a second home worth any amount below £40,000.
  3. When you buy a new main residential home, provided you have intentions to sell your current home.

Claiming a Stamp Duty Refund

If you are not exempted from paying stamp duty for your second home, you can claim for a stamp duty refund. Claiming a stamp duty is valid only if;

  1. You sold your old main residential property within three years of purchasing your new main residence.
  2. You paid stamp duty for the second home by mistake.
  3. You apply for the stamp duty refund 12 months after the filing date of the Stamp Duty Land Tax returns.
  4. You apply for the stamp duty refund 3 months after selling your old main residence.

To get your stamp duty refund, you will be required to submit your tax details to the Her Majesty’s Revenue and Customs (HMRC) department. This process can be done online via the department’s website. Here are some details you will need to provide;

  • The amount you wish to claim back.
  • The total stamp duty you paid.
  • The address of the old main residential home that you have sold.
  • The address of the home for which you paid the additional stamp duty charge.

Within 15 working days of applying for the stamp duty refund, HMRC will wire the money back to you upon approval.

Defining Main Residential Home

Unlike the other forms of tax payments, homeowners do not have the luxury to choose which of their properties is the main residential home for stamp duty purposes. As far as paying stamp duty is concerned, the house you are currently living in is considered to be your main residence. However, if homeowners spend more time in several homes, then HMRC is mandated to determine which of these homes is your main residence.

Here are some of the factors considered by HMRC to establish the main residential home.

  • The property located within the region where you are a registered voter.
  • The home in close proximity with your children’s schools.
  • The region where you are a registered professional, such as a doctor.
  • The location where your family spends most of their time, particularly if you are married.

Should First-time Buyers Pay the Additional Stamp Duty?

It is technically impossible for a first-time buyer to purchase a second home. However, if you are purchasing a buy-to-let property for the first time, you will not be surcharged the 3% extra rate. The rate is only applicable to second homes in reference to being residential homes.

The following are factors that will subject first-time buyers to the extra stamp duty rate;

  1. If you have a share in another home.

All individuals with a share on a specific property are considered to be a single unit by the HMRC. This means that if one of the shareholders owns a buy-to-let property while another one purchases a new property, then the extra stamp duty rate will apply.

  1. If you have inherited another property.

If someone leaves property to you as an inheritance while you already own another home, the stamp duty rate for second homes will apply. This is particularly applicable when the inherited property values at over £40,000. Also, if you inherit a property and become its sole owner, then you will be subjected to the additional stamp duty charge if you buy another property.

However, you may be exempted from the stamp duty on a second home if you only inherit a share of a property. This means that if you purchase a new property after inheriting 50% or less share of a property, then you will not be subject to the extra 3% stamp duty rate.

  1. If you are jointly buying a property with someone who already owns another home.

Unfortunately, if you are jointly buying a property with a person owning a home, then you will be subjected to the stamp duty for second homes. However, you may be exempted from this extra rate only if the other person intends to sell their main residence. To avoid paying stamp duty for a second home under this scenario, the two of you can agree to buy the property under your name. This can be effective, provided the two of you are not married or in a civil partnership.

Does Stamp Duty Apply on Second Homes when Purchasing a Property for Your Children?

As long as your name is included in the children’s property’s title deed, then you will be required to pay the extra charge if you are an already existing homeowner. However, this can be avoided through the following ways;

  • Acting as a Guarantor. HMRC does not class guarantors as owners of the property in question. This means that your position as a homeowner does not influence your purchase of property for your children.
  • Acquiring Family Offset Mortgage. This involves identifying a mortgage lender and opening an account with them for your savings. The lender acts as a deposit, while you solely remain to be the owner of the money. Upon purchase of the children’s property via the lender, you will not be subjected to the stamp duty on the second home.
  • Ownership transfer. You can directly purchase a property under the child’s names or transfer the home’s ownership via a Trust. This way, you will be free of the extra stamp duty as you are considered to be the owner of the new property.

Owning a Property Abroad?

If you buy a new property while you own another home abroad, then you will be liable for the additional stamp duty on second homes. Getting a home in the UK for the first time is considered to be a second home if you already have another property outside the country.

Buying a New Property as a Divorcee?

Special legislative rules are used when it comes to the application of stamp duty to new properties purchased by a divorcee. Here are two of the most common rules that you should expect to face if you are buying a new property as a divorcee;

  • Divorce Under a Property Placement Order

In some cases, a divorcee may file for transfer of their marital home in court through the Property Placement Order. In this case, the divorcee handing over the home will not be subjected to the additional 3% stamp duty rate if they purchase a new home.

  • Divorce Devoid of a Property Placement Order

If you get a divorce without organising a Property Placement Order, then the 3% stamp duty rate will be applied upon purchasing another home. In such cases, often, the divorcees continue to have a part-share to the property in question. You are, therefore, considered to be an owner of another property. However, you can apply for a stamp duty refund once you sell your share of the marital property. This must be done within the thresholds provided by HMRC on a stamp duty refund.

Stamp Duty on Lease Extensions

Lease extension refers to the process of adding more time on top of the period stipulated in a leasehold agreement before the ownership of the property gets transferred to the owner. Just like purchasing a new property, paying for stamp duty applies to leasehold extensions. According to the new rules set out by the Stamp Duty legislation established in April 2016, extending your lease may require you to pay the 3% extra stamp duty rate.

The additional stamp duty rate is levied on an extended lease on the following conditions;

  • You are an owner of another residential property worth more than £40,000 in the UK.
  • The premium for the new lease exceeds the £40,000 value.
  • The new lease runs for over 7 years.

The issue with paying stamp duty on lease extensions is that the more premium you pay while you own other properties, the higher the chances of paying the additional stamp duty rate. Here are two cases that influence a high rate of stamp duty on lease extensions.

  1. Principal Private Residence

This refers to a case where your residential lease is extended for up to 90 years with a premium of over £40,000. The home becomes your Principal Private Residence, and it is not subject to the extra stamp duty charge.

  1. Buy-to-let Residence

This refers to the extension of a residential lease for up to 90 years a premium of over £40,000. In this case, the property is considered to be rented, and the additional stamp duty rate of 3% is payable. However, if such a lease for such a property is extended at a premium below £40,000, then the extra stamp duty rate is not applicable. Also, an extension of the lease on an individual’s main residence is exempted from the extra stamp duty rate.

Conveyancing Fees

Thanks to the internet revolutionizing the way we consume and seek knowledge, it has helped us gain an slight insight into the whole conveyancing processes and fees involved in buying, selling or remortgaging our properties.

Customers can now study quotes online, look at consumer news, insights from customer ratings and reviews to have a stronger handle on solicitor fees regarding the conveyancing process.

If you are considering moving, remember that it is not just the legal fees you’ll need to budget for it is also estate agents commission, moving costs and stamp duty. We have compiled a chart of average conveyancing fees, prices and expenses from our community of expert conveyancing solicitors.

Use the chart as a guide to pricing and please make sure if you do instruct a solicitor to buy or sell your home you have a fixed fee conveyancing quote when you are ready to move.

If you are looking for licensed conveyancing solicitor to help you when buying a property, selling a property or remortgaging your home, then simply enter your details below to receive fixed fee conveyancing quote.

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  • Conveyancing fees range from £470-£2,500
  • Solicitor are paid direct from the vendors
  • Payments vary throughout the process and or just on completion

Average fees for selling a Property:-

Property Value                   Avg Freehold Cost*         Avg Leasehold Cost*

Up to £100,000                               £470                                     £630

£100,001 to £200,000                  £540                                     £840

£200,001 to £300,000                  £700                                     £970

£300,001 to £400,000                  £830                                     £1,110

£400,001 to £500,000                  £950                                     £1,290

£500,001 to £600,000                  £1,180                                  £1,580

£600,001 to £700,000                  £1,230                                  £1,640

£700,001 to £800,000                  £1,290                                  £1,820

£800,001 to £900,000                  £1,350                                  £1,990

£900,001 to £1,000,000               £1,410                                   £2,000

* This is just an indication of costs from a sample of fees from 40 licensed conveyancers across the UK to find these averages, but Fees will greatly vary depending on your situation and conveyancer.

 

Average fees for Buying a Property:-

Property Value                   Avg Freehold Cost*         Avg Leasehold Cost*

Up to £100,000                               £730                                     £1,040

£100,001 to £200,000                  £920                                     £1,120

£200,001 to £300,000                  £1,010                                  £1,240

£300,001 to £400,000                  £1,120                                  £1,310

£400,001 to £500,000                  £1,200                                  £1,390

£500,001 to £600,000                  £1,360                                  £1,580

£600,001 to £700,000                  £1,430                                  £1,640

£700,001 to £800,000                  £1,570                                  £1,950

£800,001 to £900,000                  £1,620                                  £2,230

£900,001 to £1,000,000               £1,710                                   £2,310

* This is just an indication of costs from a sample of fees from 40 licensed conveyancers across the UK to find these averages, but Fees will greatly vary depending on your situation and conveyancer.

What Are Conveyancing Fees?

Conveyancing fees are the legal costs that are payable to your conveyancer or solicitor for the servie they are providing. They also include the conveyancing disbursements the solicitor will cover on your behalf through the process. Disbursements to consider include:

  • Bank Transfer Fees
  • Copies of Land Registry Title Deeds
  • Drainage Search
  • Envirnmental Searches
  • Local Authority Searches
  • Land registry Searches
  • Stamp Duty Land Tax
  • Transfer of Ownership
  • Telegraphic Transfer Fee

Disbursement Costs

Fee                                                                 Amount

Anti-money laundering checks           £20

Bankrupty search                                       £4

Bank transfer fees                                     £25

Local authority searches                        £350

Gifted deposit                                              £75

Property fraud check                               £10

Title deeds copy                                         £7

Transferring of ownership                     £250

Help to buy ISA                                           £60

Help to Buy supplement                         £250

* This is average fees from 40 licensed conveyancers across the UK.

What stamp duty rate will I pay?

PURCHASE PRICE                          STAMP DUTY RATE

Up to £125,000                                              Zero

£125,000.01 to £250,000                       2%

£250,000.01 to £925,000                       5%

£925,000.01 to £1,500,000                    10%

£1,500,000.01+                                               12%

Do you have to pay solicitors fees upfront when buying a house?

This can vary from solicitors, in general you will pay your solicitor at different points throughout the process. There is usually an upfront fee associated with the costs of the legal work required and then further costs may be required in the middle with any final sums required, usually because the solicitor has incurred costs on your behalf (for searches, for example).

 

 

 

 

 

 

Buying a house without building regulations approval

What to look for when buying a house without building regulations approval

 

If you are actively searching for a house to buy in the UK, you should be aware of the building regulations approval. The government has set a statutory prerequisite to guarantee that structures are planned and built as per the Building Regulations and Associated Legislation. Although you can buy a house and ignore the Legislation and endorsement from this authority is prevalently important to guarantee the well-being and security of those living in the property. These are basic guidelines that preserve the structure’s integrity. Fire security, safe energy, and maintainability are a few examples. In this manner, they are not just significant for everyday structure matters; however, they have long haul ecological advantages.

Building regulations approval

What is the role of building regulations?

To better understand why buildings need to be standardised through regulations, we need to look at different areas that are prone to risks. Essentially, these building regulations are enforced to address a number of issues that affect buildings which including:

 Building new houses

 Ventilation and hygiene

 Sound proofing

 Electrical, Structural and fire safety

 Drainage and disposal of waste

 Preservation from falling, collision and impact

 Conservation of energy.

If you are interested in a house that has been adjusted in the areas above or has been altered in any other way, you should confirm whether the house has met the required standard regulations before you but it.

These guidelines are purposefully designed to safeguard people who live in the building as well as those are around the building at any time.

Routes to building regulations approval

Since October 1985, there have been two ways to acquire building regulations approval for any building.

  1. Using the local authority.
  2. Using a private organization, approved by the Secretary of State to oversee houses and issue approvals. These companies are usually known as “Approved Inspectors”.

There are different papers issued for both of these approval methods.

The important documents are the ones that will be issued to government. They prove that the altered buildings have been approved, inspected and given the go ahead. If the council does the approval it is called “Building Regulations Certificate of Completion” and if an Inspector approves then the document is called “Building Regulations Final Certificate”.

Reasons why home owners may modify a house without a regulation approval

 Ignorance

Many people are unaware that when you have houses should be renovated or altered according to the standards set by the Building Regulations and Associated Legislation. This ignorance may cost them a lot of money in the long run. They also find themselves in dangerous situations especially when dealing with electrical wiring of the house.

 Passive Resistance

Some people know that they should get an approval but have avoided getting one because they have doubts that they will get the permission. These people are quite aware of all the necessary steps to take to ensure they get a regulation certificate but they turn a blind eye and refuse to comply to the standards.

What if you want to make your own enhancements to a house?

Let’s say you find a house in a good location and neighbourhood but you want to make some small adjustments to the house. All changes to the house should not be done without the knowledge from the Building Regulations Legislators. You are required to get permissions from the regulators so as to acquire a Building Regulations Compliance Certificate. The building inspector is the one that issues out certificates. The inspector is authorised to oversee the enhancements and make sure that meet the right standards. In this regard, you will require the services of a professional conveyance who will take copies of all documents pertaining to the house; regulations certificates and planning permissions.

What renovations require regulation approvals and which do not?

Some people think that making minor adjustments to their house doesn’t require a regulations approval. Well they are not entirely wrong because the regulations focus more renovations of the parts of the house that may cause danger to the inhabitants of the house. In simple terms, not all house buildings need the attention of the regulations legislators. Here is a list of examples that you could use to determine whether you need one:

 New bathroom installation

 Addition of extra radiators.

 The erection or extension of a structure

 Changing fuse boxes and connected electrics

 Replacing electrical lights and sockets near a bath or shower

 Changing windows and doors

 Installation of cavity wall insulation

Luckily there are some adjustments that don’t really require building regulations approval, they are:

Ordinary regular repairs and maintenance that don’t include electrical fuse boxes, glazing house units and oil tanks.

Replacing and installing a new water sink, toilet bowl or a bath that have the similar dimensions and properly fit as the previous ones.

Putting up light bulbs and power switches unless they are close to the bathroom.

What ensues after you buy a house without a regulation approval?

If you decide to ignore the proper building regulations permissions when buying a house, you will sooner or later face the local enforcement action later on. Avoiding these house guidelines can cost you a lot in the long run. You could potentially pay for repeating the renovations or you could be forced to convert the house back to its initial state. Another consequence is that the house value will eventually decline. So the day you intend to put the house for sale, it will become difficult to sell it.

You should be aware that it is the duty of the conveyance solicitor to report the lack of building regulations approval to anyone taking the property on mortgage. This is likely to lead you missing to sell or rent the house.

How to go about purchasing a house without building regulations approval?

 

Now that you have a simple understanding of building regulations and its role in protecting people. Are you still interested of buying a house that has not been inspected and given a Building Regulations Compliance Certificate? If your answer is ‘Yes’, then you should probably decide on one of the two possible options. .

  1. A consent of the Retrospective Building Regulation from the local authority

A retrospective consent is a document that is applied for by the seller of a property. The process of acquiring it is through a regulations inspector. The inspector will visit the house to be sold to purposely carry out an extensive assessment. The house property has to meet the mandatory regulations and when it does, a Regulations compliance certificate is then issued.

Although the retrospective concept is a good option they are some possible issues that may create a less suitable outcome.

  • Inspectors may sometimes decide to not give a full approval after a check. This is mostly due to the fact that a thorough check may not have been carried out. If you don’t have a full approval it means that the inspector will only confirm with the Building Control Department that no action will be taken against you as of yet.
  • Sometimes you may feel like you don’t trust the inspections process. So, you may develop uncertainty that the house is fully secure from the adjustments.
  • Some sellers are very cunning and will not apply for a retrospective consent because this could lead to the local authority finding out that there exist no regulations approvals. They mainly do this to so as to not spend extra money trying to rectify the house to meet the standards.
  • Once the inspector notifies the local authority about the unmet standards of the building regulations then the seller may be denied to an Indemnity Insurance Policy which is really essential in the buying and selling of property.

 

  1. Building regulation indemnity insurance

 

This type of insurance is really important when you want to buy a house without the regulations approval from the local authority. This policy is commonly requested by a conveyance solicitor who would inquire the seller to acquire an indemnity policy for you. Getting Indemnity insurance is an intelligent decision. If the local authority decides to take legal action on you, this policy protects you by covering your costs and losses that you will incur. Although this policy is inexpensive, some people argue that it would be much more rational if the seller paid for the Indemnity policy. The imaginable issues with indemnity insurance are:

  • Even though the insurance policy does help you in the long run, there are other safety issues that may prevail if a proper survey of the house building is not conducted.
  • You can’t completely escape losses entirely, since the Indemnity Insurance Policy only covers the losses from action against you by the local authorities. The other losses that you have to deal with are those from broken and defective house parts.
  • It is important to understand that the Insurance will be void if the previous owner of the house did not get approval. It is the work of the conveyance solicitor to acquire and divulge this information to you.
  • All enhancements and minor renovations made to the house are only valid to be insured if they have lasted for a period exceeding 1 year.
  • Another reason that will make the insurance policy to be null and void if you get exposed to the local authority that you do not have a regulation compliance certificate.
Factors to consider when buying a house without building regulations

The decision is a crucial one and you need to critically think about the things you need to do before finally purchasing a house without approval from the authorities. You will have to:

  • Confer the issue with a conveyance solicitor; they can do a lot for you like assess you documents and offer sound advice with possible solutions.
  • Completely absorb all information and advice that is given by your solicitor and ask thorough questions.
  • Inquire about the condition of the house; find out all you can about the previous owner and all possible adjustment that may have been done to the house.
  • Weigh your options to come to a decisive way forward
  • Estimate how much risk is involving in each available option.

Conclusion

Although the idea of buying a house seems exciting at first, there is a lot of work to do before you can finally decide whether to buy a house that has met all regulations or simply buy a house and make all adjustment without caring about the authorities. Risk is the major factor when you consider to buy a house with no approvals but there is always a thrill that comes with any of risk all you have to do is find the risk that you can handle before you take it as in future it may be expensive to deal with the authorities.

A Deed of Trust – what it is and why it’s important to have one

A Deed of Trust

If you and another person are planning on buying property together as an investment, then it is extremely important that you obtain a Deed of Trust as protection for the investment. When you approach an agent to help you with the purchase of the property, they will ask you if you want to be tenants in common or joint tenants. These options are entirely different from each other, and it will be up to you and the other person entirely, which option you go for, according to your individual financial circumstances. 

How do tenants in common and joint tenants differ?

These two options differ in the following ways:

  • Tenants in Common – is the option you would go for if you and the other person prefer it that your share of the property goes to your family, or if you are investing different amounts of money. This type of Deed of Trust is created as protection for your individual investments.
  • Joint Tenants – usually, when you buy a property with another person, you are recorded as joint tenants, meaning that, if either of you passes away at some point, the other person automatically inherits your share of the property.

What exactly is a Deed of Trust?

Also referred to as a Declaration of Trust, a Deed of Trust is a legal paper used by tenants in common to show what amount of money each person has invested in the property. Since these different amounts are recorded in black and white, if the property is sold at a later stage, each of the persons involved will receive the same amount of money that they invested in the first place.

For whom should a Deed of Trust be created?

Although couples normally take out a Deed of Trust, it is also available for use by friends or family members who are investing together in a property.

 

A Deed of Trust will more-than-likely not be necessary if both persons are spending the same amount of money on the investment. The reason for this is, that when the property is sold at any time in the future, the final amount that the property is sold for, will simply be split evenly between the two parties after legal costs have been deducted.

However, in the event that both parties have invested different amounts in the purchase of a property, then a Deed of Sale will make sure that each person gets back the amount of money that is rightfully theirs. A Deed of Sale in these cases can be extremely useful, should there be a dispute or messy break up when the property is sold.

 

For instance:

Peter and Tim decided to invest in a house together, which costs £300.00, with Peter contributing 60% of the cost and Tim only putting in the remaining 40%. Having a Deed of Trust, in this case, will protect their investments when they sell the property at a later stage, with Peter getting back the 60% he invested, and Tim, his 40%.

If the pair didn’t have a Deed of Trust, there would have been a dispute as to who owns how much of the investment, and there would be no legal way to stop Tim demanding 50%, instead of the 40% he contributed, because of the two of them owning the property jointly.

Also, should Peter have paid more towards their monthly mortgage costs than Tim, and spent money on having the house decorated as well, then this would also be recorded in the Deed of Trust, with the amount being divided properly, to indicate these additional payments.

This type of deed is referred to as a Commensurate Share and is just one of the numerous choices available.

When should a Deed of Trust be used?

The main reason why a Deed of Trust is used is to have legal records in place, of different financial contributions that are made when two people invest in property. However, there are several other reasons when it would be used, including the recording of the following:

  • The amount of money contributed by each person towards the property
  • Each of their shares in the property
  • When one of the two persons has contributed more money at some time in the future, like renovations, for instance
  • The amount that each of the two investors is responsible for, regarding bills, maintenance, and mortgage payments
  • In cases where a third party has invested money, such as a friend or family member, and does not appear on the title deed and wants to protect the amount of money that he/she has invested
  • When one of the two investors is not able to, or does not want to buy the other partner out, and wants to give up his/her interest in the property, officially

How do the Deeds of Trust work?

Deeds of Trust are flexible, so make an appointment with your conveyancing lawyer to talk about exactly what you need to be covered in your agreement. He/she will then draw up a contract which both you and your investment partner will sign. Should you want these changes to be included in your title deed, speak to your property lawyer about arranging this afterward with the Land Registry. By doing this, you will be making sure that no one can sell the property without both you and your partner’s consent.

Do I really need a solicitor to create a Deed of Trust?

Although you could create your own Deed of Trust to save money, you might end up having more problems than you bargained for. For instance, if you create your Deed of Trust yourself and get someone to sign it as a witness, it could include mistakes that you’ve made or even, might not be recognized by a court of law.

The cost of having a Deed of Trust created by a lawyer is a small price to pay compared to the large amount of money that you have invested in the property.

Obtaining a Deed of Trust properly will ensure that the property you and your partner have invested in will be well protected and perfectly secure in the future.

Why is a Deed of Trust necessary?

Similar to a prenuptial agreement, a Deed of Trust also protects the assets of each partner if they split up or there is a dispute. Despite many being under the impression that a prenuptial agreement is only for celebrities and the incredibly wealthy, the Deed of Trust can be extremely helpful to people from all walks of life.

Enormous amounts of money are at stake when properties are purchased, and since everyone buying a property is doing so under different circumstances, it is well worth it to create a Deed of Trust to protect each person’s financial contribution, as well as reduce the risk of a dispute if the relationship ends.

Besides being able to enjoy the protection provided by a Deed of Trust, your lawyer can also give you advice regarding tax and planning implications involved with purchasing a property with a partner. Your lawyer might also advise you to draw up a will, to make sure that your investment is safe, and will be inherited automatically, by anyone of your choice.

Who should you approach for a Deed of Trust?

You can do it yourself, but this is not recommended. It is highly recommended that you use a qualified solicitor you will perform this for you. You should expect to pay between £350 to £750 depending on how complex your requirements are.

Always ask the solicitor for a fixed fee quote before you instruct them.

What is stamp duty in wales 2020

All About Stamp Duty in Wales 2020 update

 

Stamp duty in wales is called Land Transaction Tax (LTT). This tax applies to people who buy or take leasehold on land and property in Wales. This new stamp duty system was introduced in 2018, making Wales different from the rest of the UK. The new system has different tax rates and also operates differently from other Stamp Duty Systems in the Region. The fact that property prices remain low even after the introduction of the LTT system shows that most property buyers in Wales don’t pay the Land Transaction Tax.

LTT rates in Wales

Currently, you only have to pay the LTT if you purchase a residential property worth £180,000 and above. LTT for the purchase of non-residential land and property is £150,000. Each band has its percentage charge rate as follows:

0% SDLT Rate for a property value below £ 180000

3.5% SDLT Rate for a property value above £ 180000 up to £ 250000

5% SDLT Rate for a property value above £250 000 up to £400000

7.5% SDLT Rate for a property value above £400000 up to £750000

10% SDLT Rate for a property value above £ 750000 up to £1500000

12% SDLT Rate for a property value over £1500000

For example, if a person buys a property worth £240000, the LTT amount to pay will be 0% for the first £ 180,000 and 3.5% for the next £60000. So the total LTT will be £3100. You can quickly get these figures using a Transaction Tax Calculator.

LTT for Buy to Let and Second Homes

People who are buying property and already own one or more residential property have to pay higher rates. Remember that the LTT rates for the first property are to give first-time buyers a fair deal when buying property. The 0% rate for amounts below £180000 ensures that the average buyer doesn’t pay LTT for their first residential property. The rate for second property purchases are as follows:

 

3% % SDLT Rate for property value up to £ 180000

6.5% SDLT Rate for a property value above £ 180000 up to £ 250000

8% SDLT Rate for a property value above £250 000 up to £400000

10.5% SDLT Rate for a property value above £400000 up to £750000

13% SDLT Rate for a property value above £ 750000 up to £1500000

15% SDLT Rate for a property value over £1500000

Note that the higher LTT rates will only apply if you buy a property worth more than £40,000. These higher LTT rates for residential property also apply for companies and trusts.

 LTT for First Time Buyers

Unlike other parts of the UK, First-time buyers in Wales do not get any relief from LTT. The LTT system is different from the Stamp Duty system of England and the LBTT system in Scotland as they give first-time buyers a tax reduction.

 

Despite the lack of a tax reduction, first-time buyers in wales do not pay more than other regions because the LTT threshold and the average property prices are lower than in England. The 0% rate for the property below £180000 also cushions most first time buyers from paying LTT.

The rate for Non-Residential Property in Wales

People who purchase land and property for business purposes like offices and shops pay LTT as follows:

0% SDLT Rate for property value up to £ 150000

1% SDLT Rate for a property value above £ 150000 up to £ 250000

5% SDLT Rate for a property value above £250 000 up to £1000000

6% SDLT Rate for a property value above £1000000

Differences between Stamp Duty and LTT

Unlike LTT, where you start paying 3.5% for anything over the value of £ 180,000, the value in England is set at a lower amount of £125, 000. First-time buyers in the Stamp Duty system are also exempted from paying the tax as long as they are purchasing a property worth £500000 or less. Stamp duty is also a banded tax, but there are differences in SDLT as follows:

Nothing for a property value less than £ 125000

2% Rate for a property value between £ 125000 and £ 250000

5% Rate for a property value between £250 001 and £925000

10%Rate for a property value between £925,001 and £1.5 million

12% for any property value above £1.5 million

If we use the same example of property worth £240000, the buyer will pay nothing on the first £125000 but will pay 2% for the next £115000. So the total stamp duty amount owed will be £2300. This amount will not apply if the person is a first-time buyer in England, but it will apply if the system used is the LTT system in Wales. These differences can be at times confusing, hence the need to check whether you are liable to pay or not.

LTT Frequently Asked Questions

 

Should we expect future Changes in LTT?

The Welsh Government can revise their LTT rates if there is a change in the Stamp Duty System in England. It is more likely that they will mirror any changes to Stamp Duty in England. Changes in tax rates and bands for Land transaction tax in Wales are done by the Welsh Government and Approved by the National Assembly. It is therefore important use the latest LTT calculators.

When is One Eligible for an LTT Refund?

People who buy a new house while still in possession of their old house pay the higher LTT rates meant for those purchasing a second home. Such people can, however, claim for a refund for the higher LTT rate paid if they sell the old house within three years after purchasing their new home. The refund you receive is the difference between the higher rate you paid and the normal rate amount for people buying a new home.

When Should One Pay LTT?

The general rule is that property buyers should pay LTT within 30 days after purchasing a property. The solicitor transacting on your behalf will file the Land Transaction Tax Return for you and pay the LTT to the Welsh Revenue Authority.

How Long Does it Take to Buy a House

 

A house is probably the biggest purchases you will ever make in your life, and that is why you have to approach the purchase slowly. The process will be quite lengthy, and it will vary depending on a few factors. The pre-approval process alone can take a few days, and searching for the home could easily take many months. Once you locate the ideal property, you will still need an extra month or so to conclude the deal. In this guide, we will take you step-by-step through the process of buying a house.

The average time it takes to buy a house in the UK is between 20 to 90 days.

How long does it take to buy a house

1. Looking for a Property

One average, you will need between 6 and 12 weeks to locate a property which you can buy. Still, the time required can vary significantly. It can take time to decide on a region in which you can buy a house. Houses will generally cost more in big cities, so you can always simplify your decision by checking your budget. A few factors like the nightlife and crime rate should be considered when choosing a specific region where you can settle.

When looking for a property, you should also consider how much work you want to do on the property. You will considerably reduce the time required for a property search if you compromise on some things on your wish list. But as mentioned earlier, this is among the most important purchases you will ever make. Most people who are not in a hurry to move would be ready to wait till they find a house which meets all their requirements.

Properties for sale are usually listed on the newspaper classified or the websites of real estate agents. Property websites are also excellent places to search for houses. If you are already decided on the region you intend to live in, you can search for a house by scouting the region and looking for ‘For Sale’ signs.

The main property websites in the UK are Rightmove , On The Market , Zoopla and Prime Location

2. Financing the Purchase

Getting pre-approved for a mortgage can take about three days, and this process helps to show that you are serious about buying a house. Sellers will also refer to the pre-approval documents to determine how much you can spend on a house. For the pre-approval process, you will need to show evidence of your assets, income, and credit history.

Although the pre-approval process is quite short, you will need some time to pay down credit cards. Also, if there are issues with your credit report, you have to correct them before you approach the lender for a mortgage pre-approval. You should note that a high credit report will lower your interest rates on the mortgage.

You should also save up for a down payment or deposit  before approaching the lenders. This will prove to them that you have the capacity to pay for the home.

The pre-approval will give you a big advantage over other potential buyers, and that will shorten the time needed for the purchase. For this reason, you should take it very seriously. Remember that you have to secure the loan before the pre-approval expires.

3. Getting the Contract

The negotiation process will also take a lot of time, particularly because of the back and forth involved. As soon as you locate the house you want to buy, you will need to put up an offer for the seller. Usually, the estate agent will help you make an offer on the property. As per the UK laws, the seller will have to respond to your offer within 72 hours, and this will usually be in the form of a counter-offer.

Although the negotiation process will take longer, you will not be involved with much of the finer details. The solicitors on both sides will instead handle much of the negotiation. You can always ask for the latest details on the purchase.

Once a final offer is reached, you will need to schedule a thorough home inspection. You should set aside three or four hours for the home inspection if you want to spot any serious issues with the property. The inspection is typically completed within a week of signing the purchase agreement. Still, if the inspection reveals issues that were not previously disclosed, you may have to restart the negotiation process to discuss repairs and any potential changes to the contract.

4. Finishing the Sale

When buying a property you will need the services of a good conveyancer or conveyancing solicitor who will carry out all the required searches and ensure that all legal obligations are met and that you are protected during the transaction.

The final part of buying a house is exchanging the contracts. It goes without saying that you should go through the contract keenly with your solicitor to make sure everything is in place. You can always ask for amendments where necessary. Note that signing the contract implies that you are willing to move forward with the purchase.

The next step would be to transfer the money from the account of the seller’s solicitor. Make sure you clear all costs related to the sale, including the solicitor’s fees. You will now receive the keys to your new home. Once the ownership of the land has been transferred to you, the solicitor will register the land with the government. Other legal fees will also be cleared at this point.

Processes After Buying the House

Unfortunately, the process does not end when you get the keys to your new home. First, you have to buy homeowners insurance. This way, you will be protected from damages caused by fire and other elements in the environment. There are many options of insurance covers, so you should do thorough research before purchasing a plan.

The next thing you should set in order are the utilities. Make sure the electricity, water, and gas are registered in your name. If you choose to retain your old utility providers, you should give them your new address. Make sure you also set up your telecommunication facilities like TV and phones.

You also have to notify your new local authority as soon as you move into your new home. This will keep you compliant with the law since it enables you to pay your council tax on time. Note that the council tax is paid by all renters and homeowners in the United Kingdom.

Another hectic process is moving from your previous place of residence. You have to work with a reputable removals company and engage in thorough cleaning of the new property. It will generally take a long time to settle down fully in the new property.

Building a New Home in the UK

If you have trouble finding a home which suits you, it is also possible to simply buy a plot of land and start your own construction. This is a fairly popular option in the UK. Once you find a plot of land, you will usually take about six months to complete the construction.

Costs of Buying a Home

There are certain payments which you will have to cover continually as the owner of the new house. The first mortgage payment will have to be made the month after you buy the home, and it will have to be made every month. You also need to create a budget for maintenance and repairs. These costs should be reasonably low. Another cost you must check is the council tax, and this has to be paid once every year. Other ongoing costs of owning a house include the homeowner’s insurance, the leaseholder cost, and regular bills.

Conclusion

Buying a house can be exciting and may be one of your biggest achievement in life. However, the process can be hectic and will take up a lot of your time. You have to start with the property search, then get a mortgage approval, and sign the contracts. You also have to inspect the home. Even after you get the keys to the new home, you will still have a lot of work to do. These tasks include the cleaning of the property and setting up the utilities and telecommunications. Buying a home in the United Kingdom will usually take many months to complete.

Why Do Solicitors Take So Long to Exchange Contracts?

Most individuals often wonder why solicitors take too long to exchange contracts, whether it’s a purchase or sale.

Why do solicitors take so long
Why do solicitors take so long

There are numerous factors that can cause delays from delays in conducting or obtaining the searches, a difference in valuations, the size of the chain, unresponsive buyers or sellers, a solicitor having too much to handle or simply being bad at his\her work.

None of this helps since the longer the process takes the more you are at risk of being gazundered if you’re the seller or gazumped if you’re the buyer.

However, if you really want to comprehend fully why they take long to exchange contracts, you will first need to understand what the conveyancing process involves. Continue reading!

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The Conveyancing Process

How long enquirers take?

 

The first step of the conveyancing process is the enquiries. It is when the solicitor of the buyer formally asks for draft contract from the solicitor of the seller. They will also send documents like a property detail form that the seller completed.

A solicitor will then make requests for clarification or information on the documents they have already received, which is referred to as enquires.

Now how long a solicitor enquires will take normally depends on how responsive the parties involved are; the respective seller and buyer and the solicitor. Typically, they’ll last for at least 1 to 4 weeks – it all depends on the sale’s complexity. It is worth talking to your solicitor if the enquiries take longer than this to determine why.

The typical time from the enquiries to exchange of contracts

 

Most people think that once the enquiries are completed, the rest of the process is straightforward and pretty quick.

Unfortunately, that is not case since the transaction that would actually be considered quick can take around 2 to 3 weeks to reach exchange of contracts. A typical transaction takes roughly 4 to 8 weeks and most of them take even longer.

How long solicitors’ searches take

Good solicitors will make sure that they begin conducting searches as early as possible. The amount of time the searches take is just somewhat out of solicitors control.

Searches include looking for potential environmental hazards, confirming how the property is linked to the water system, and checking the property’s risk of flood.

The buyer’s solicitor is the one that conducts these searches and he\she relies on the reports sent from different authorities.

So, the typical time that the searches take depend on how quick the authorities are providing them and the requested searches. This stage can take about 3 to 6 weeks.

How long it takes to buy and sell a house in total from start to finish

If the searches and enquiries are the areas where many individuals see delays and get frustrated, then how long does it normally take to sell and buy a house from start to finish?

When buying, if you’re considering the conveyancing process from the time the offer has been accepted on that property, then the process can take around 2 to 6 months.

Some people spend hours, others months, or even years, trying to find a property.

Generally, sales and purchase with no downward or upward chains usually complete a bit quickly, whereas, those with numerous sellers and buyers involved (especially old properties) simply take the longest time.

What can delay the exchange of contract?

The things that can delay the exchange of contracts include, but aren’t limited to:

 

  • Overworked solicitors: Solicitors with so many clients to attend to may take longer to carry out the needed work.

 

  • Unanswered enquiries: If your solicitor has unsatisfactory answers to any of the queries, he\she will not want to complete.
  • Slow searches: Most authorities are just slow at offering search results and that can delay the entire conveyancing process.
  • Complex transactions: Transactions that include non-standard elements are complex resulting to delay.
  • Mortgage lenders: There are buyers who normally need a mortgage and the speed of that transaction depends on the lender’s speed.
  • Slow sellers or buyers: Sometimes it is the seller or buyer who delays the conveyancing process by maybe not signing contracts promptly or not offering information.

To find out what exactly is delaying the exchange of contracts, you will need to speak to your solicitor.

A professional solicitor should always keep the client updated on what they are waiting on and where things are throughout the conveyancing process. However, do not hesitate to put a little pressure on your solicitor and seek answers on why things are taking too long.

In addition to that, remember that there are things that are out of their control and their main goal is to make sure they protect their clients during the entire transaction.

So, what if it is the seller or buyer holding up the exchange of contracts?

If the seller or buyer is in a chain, he\she may intentionally hold up the process in order to give other parts of that chain a good chance to catch up.

Also, if issues with the property has been stressed on a survey, the purchaser may want some time to look into them.

Sometimes a seller or buyer can get cold feet and delay exchanging of contracts in order to give himself\herself more time to think. It can also happen when they have spotted a great mortgage deal or want more time to sort out finances.

It can be extremely difficult to know the truth it it’s the seller or buyer delaying the exchange of contracts; however, you can look for an estate agent to talk to the other party and attempt to find out his\her position.

What should you do if your solicitor is delaying the exchange of contract?

If evidences suggest that it’s the solicitor that is holding up the exciting exchange of contract, then you should try to find out ‘why’.

The issue can also be with the other party or even his\her solicitor. If that’s the case, consider going through the estate agent to encourage them to try and quicken their pace and even get their own side of the story.

If the problem is that your solicitor is still awaiting the search results, try to find out from him how essential the search is.

If your solicitor that is not spending a significant amount of time on your transaction or is simply overworked, put pressure on him.

Do not be afraid to find the new and right solicitor if the one that your chose is not good for you. You should also know that switching solicitors can delay the completion.

Using an online conveyancing specialist can save you considerable time and money as this is what they do all the time, and they will more than likely have come across any problems you may encounter in the past.

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Can I Force the Sale of a Jointly Owned Property?

Forcing the Sale of a Jointly Owned property

Forcing a property sale

Selling a co-owned property or land can be stressful, especially when the other legal owner (s) disapprove the sale. When this is the case, the legal owner intending to sell the property can make an application to a court for an order for sale. Upon the granting of the order for sale by the court, the legal owner can force for the sale of the jointly owned property.

However, the legal proceedings to obtain the order for sale can be quite expensive, which is why most joint owners firstly seek mediation before making applications to courts. Joint owners may also have their intentions documented within a Deed of Trust. Here are more guidelines on what goes into forcing a sale of a jointly owned land or property.

Matters Relevant in Determining Applications for Sale of a Jointly Owned Property

According to the UK’s Trusts of Land and Appointment of Trustees Act 1996, Section 15, courts must regard certain matters when determining an application for an order of sale. These matters include the following;

  • The interests of any beneficiary’s secured creditor.
  • The intentions of the persons or person who created the trust, if any.
  • The purpose or objective for which the property or land subject to the trust is held.
  • The welfare of a minor who is reasonably expected to occupy or already occupies land or a property subject to the trust as their home.

Proving the Original Intentions of Legal Owners

 

As far as the intentions of the person that initiated the trust are concerned, the courts will consider whether these intentions are consistently the same from the time of agreement to the time when an order for sale is requested. This is because intentions change with circumstances, an individual’s actions, or when joint owners get into a mutual agreement. But how can a court prove the initial intention of legal owners?

In most cases, co-owners of a property will set out within a Deed of Trust their intentions of buying a property. In addition to capturing the legal owners’ intentions, the Deed of Trust highlights their form of relationship and how they intend to have their co-ownership terminated, should their relationship status change. Here are some of the common intentions that come with joint ownership of a property.

 

  1. Investment

This is where joint owners buy a property or land with the purpose of making a financial gain after a span of time. Co-owners expect a return on investment without an intention to live in this property. They will, therefore, bring in tenants in exchange for money.

  1. Family Home

This is where a couple purchases a property as the primary residence in which they will have and raise their children in. The intention, therefore, is to live in this property for a defined period of time, as long as the couple is still raising and nurturing their children. This intention changes when the children move out of this property.

  1. Matrimonial Property

A couple will purchase a property to be their residential home as long as they are married. They intend to live in this home and benefit from it while they remain married. Issues such as divorce may change this intention.

  1. Pre-Marital Home

In cases where a young couple purchases a property with a view to have separate ownership and resell it in the future, their intention is to own it for a short period of time. The intention may also be to make the property their marital home in months or years to come.

Outcomes of an Order for Sale

Any application to a court for an order for sale may be awarded either of the following orders;

  • Order a sale
  • Order a sale but delay the request for a specified duration
  • Refuse a sale
  • Refuse a sale with restrictions on the right to occupy the property.
  • For exceptional cases, order a partitioning of the co-owned property.
  1. Order a Sale

An order for sale is awarded when;

  • There are numerous joint owners, and a majority of them approve the sale.

It is important to note that other relevant matters that the court considers in determining an order for sale are the wishes and circumstances of other beneficiaries if there are any. The beneficiaries must be entitled to the right of possession of the property subject to the Deed of Trust.

  • Failure in the purpose for which the property was bought.

For instance, when a couple that purchased a matrimonial home divorce or break up before having any child. The purpose of the property was to serve the couple as their matrimonial home. Divorce or break up, therefore, renders this intent as a failed purpose.

  • The property was purchased for the purpose of investment.

When the property in question has been purchased for financial gain, then a legal owner may be entitled to make a sale as far as their partnership agreement allows.

  1. Order a Sale but Delay the Order for a Specified Duration

Courts may award a joint owner with an order for sale but suspend the sale for a specified duration. This is to allow the joint owner wishing to reserve the property the chance to purchase the beneficial interest of the other co-owner. The cost of buying the beneficial interest of the leaving co-owner is arrived at following a proportionate calculation of the property’s fair value.

  1. Refuse a Sale

Courts will analyse all the elements outlined in the 15th Section of the Trusts of Land and Appointment of Trustees Act 1996 to determine an order for sale application. If an application does not meet the requirements as per these elements, then the court may reject or refuse sale of the property. For example, if the purpose of a property was to be a matrimonial property where a husband and wife will live as far as they are married, then the court will consider this when making a judgment on an application. Therefore, if one of the co-owners files for an application of an order of sale, the court will refuse the sale as the intention of buying the property was for matrimonial purposes. The original intention holds as long as the two remain married.

Where a property has been jointly bought under an agreement that one co-owner cannot sell the property without the consent of the others, then this may be the basis of refusal of sale of the property.

  1. Refuse a Sale with Restrictions on the Right to Occupy the Property

As earlier stated, the courts may refuse the sale of property following certain guidelines. However, in some cases, the court may reject a sale and award restrictions on the occupancy rights to the property. What this means is that when one co-owner leaves the property, then the remaining legal co-owner may be required to pay the leaving party some rent. This form of an order occurs when;

  • It is unfair for the leaving party to be excluded from the privileges and benefits that come with occupying a property as are being enjoyed by the remaining co-owner.
  • It is considered to be socially unacceptable to order the sale of a property under certain circumstances.

For instance, when one joint owner applies for an order of sale of a property that was originally purchased as a family home, the court may refuse the sale but with restrictions. This regulation will require the remaining spouse to pay rent to the leaving spouse throughout their duration of occupying that property. The rent is calculated as a proportion of what may be considered to be the ‘fair rent’ of that home.

  1. Partitioning the Co-owned Property

Partitioning a jointly owned property implies a physical division of the property as per the request of the petitioner. Where a property is too small to be physically divided, the court may order for a sale of the property. The property may be sold at a private sale or an auction. The proceeds of this sale are then divided proportionately as per their ownership interest. It is, however, essential to note that this type of order is unique, and it is rewarded to exceptional cases. If you are interested in filing for a partition application, you should consider consulting professional solicitors for guidance on all the legal matters involved in the process.

Frequently Asked Questions About Forcing the Sale of a Jointly Owned Property

  1. Can an ex-spouse force the sale of my property?

Yes. Your ex-wife or husband can force sell your property. They can do this by applying for an order of sale of your property in the courts. If the courts validate the application based on the elements outlined under section 15 of the Trusts of Land and Appointment of Trustees Act 1996, then your property can be sold by your ex-spouse.

 

  1. What is the cost of forcing the sale of a jointly owned property?

The cost of forcing the sale of a co-owned property varies from one solicitor to the other. However, the total cost of applying for an order for sale is a summation of the court fee and the solicitor’s fee. You can consult your solicitor for guidance on the expected costs.

 

  1. Under what circumstances can you force a sale of property?

There are several circumstances that can see the courts validate a forced sale of a property. Some of these circumstances include;

 

  • An agreement within the Deed of Trust outlining the intentions of buying and selling a property.
  • A divorced or separated couple who had purchased a property with an intention of having it as their matrimonial home.
  • A man and woman who are not yet married but had purchased a property with an intention to resell it after mortgage clearance or after a specified duration of time.
  • When children move out of a property that was intended to be a family home.

 

  1. What is the role of a solicitor in an order for sale case?

Hiring a specialist solicitor to assist you in applying for an order for sale is essential. Their vast experience and knowledge of the UK land laws will help you with the following;

  • Making a court application for an order of sale of a property on your behalf.
  • Assistance in the mediation procedure with other joint owners.
  • Drafting a Deed of Trust where an agreement on your intentions in a property and those of the other co-owners are outlined.
  • Assisting in the calculation of the amount payable to the leaving party’s beneficial interest to a property.
  • Any other legal proceeding revolving around an application for the sale of a jointly owned property. They will briefly you in all the legal proceedings involved in the sale of a jointly owned property.

Before going down the legal route, talk to all parties involved and try and come to an amicable agreement. It will save you a lot of time and money.

Current average house prices.

These are the current average house prices followed by the change in percentage and cash terms over the past decade, according to Zoopla:

 

  • Aberdeen, £158,945, minus 0.7%, minus £1,164

 

  • Belfast £137,987, minus 3.4%, minus £4,896

 

  • Birmingham, £167,624, 43.1%, £50,520

 

  • Bournemouth, £291,023, 44.5%, £89,576

 

  • Bristol, £285,564, 67.7%, £115,243

 

  • Cambridge, £416,932, 67.4%, £167,808

 

  • Cardiff, £211,088, 38.1%, £58,263

 

  • Edinburgh, £240,408, 34.5%, £61,693

 

  • Glasgow, £123,577, 15.0%, £16,087

 

  • Leeds, £168,595, 31.3%, £40,155

 

  • Leicester, £180,137, 48.5%, £58,870

 

  • Liverpool, £121,858, 17.2%, £17,872

 

  • London, £478,982, 74.4%,£204,371

 

  • Manchester, £173,396, 43.8%, £52,774

 

  • Newcastle, £129,650, 15.6%, £17,502

 

  • Nottingham, £157,752, 43.6%, £47,895

 

  • Oxford, £411,473, 56.3%, £148,235

 

  • Portsmouth, £239,621, 46.2%, £75,773

 

  • Sheffield, £139,321, 27.1%, £29,681

 

  • Southampton, £227,980, 42.2%, £67,706

 

  • Average across all 20 cities, £257,198, 53.8%, £89,987

 

  • Average across whole of UK, £219,986, 39.4%, £62,218