Download The system of buying and selling residential properties in Scotland

The Client • Issue 12 • December 2011
Buyers and sellers
opt for caution
The system of buying and selling residential properties in Scotland has undergone
a number of changes in recent years. Many of these changes have come at a time of
economic uncertainty and a widespread downturn in the property market.
10 Land & Property
“The hoops through which
borrowers and solicitors must
jump to satisfy lenders have
always existed, but those
hoops are proving increasingly
challenging.”
B
uying and selling a home can be one
of life’s most stressful experiences, even in the ‘boom years’ when the
prices are high and sales seem easy. The
current economic climate has undoubtedly
seen a change in attitude from both
purchasers and sellers, with caution the
underlying theme. Conflicting media reports
regarding the state of the property market
and the difficulties in securing funding from
lenders have compounded the issue, and
so overall it is not surprising that there
is a lack of confidence from sellers and
purchasers alike.
Home Reports
Since 1st December 2008, subject to
some exceptions, a seller must provide a
Home Report when selling their property
in Scotland. The Home Report (which is
undertaken by a qualified surveyor) contains
a survey and valuation of a property, an
Energy Performance Certificate and a
questionnaire containing general information
about the property.
While many purchasers do find the
information in the Home Report useful
when considering an offer for a property,
generally a purchaser (or the purchaser’s
lender) will require either that the Home
Report be updated or that an independent
survey and valuation be carried out. Often,
the independent survey and valuation
will highlight matters not shown in the
Home Report or a different valuation may
be reached. These differences can cause
problems for both parties, particularly where
a lender is involved.
Standard Clauses
When submitting an offer for a residential
property it is now standard practice to
submit it containing what are known as
‘Standard Clauses’. These form the basis of a
fair and standard contract and are generally
in a format that is acceptable to both
purchaser and seller. Standard Clauses help
speed up and simplify the missive process.
As such, a contract for a sale and purchase
tends to conclude, and therefore be legally
binding, at an early stage in the transaction.
It is important to be aware that when
submitting an offer containing Standard
Clauses (particularly if the offer is not subject
to survey) the seller may accept that offer
quickly and the missives could be binding
on both parties almost immediately. It is
sometimes possible to conclude missives in
one day and purchasers must be mindful of
this when making an offer for a property.
Automated Registration of
Title to Land
Automated Registration of Title to Land
(ARTL) is a new system introduced by the
Registers of Scotland. In some cases, where
the title to a property is already registered
in the Land Register of Scotland, it may
be possible for the conveyancing to be
dealt with without any paper deeds being
prepared or signed.
It will be some time before there will be
widespread use of the ARTL system but it
is becoming more common with residential
property transactions. The intention is
that ARTL will simplify the process of title
registration. It is early days and currently only
simple title transfers can be registered in
this way.
Common Repairs
Queries often arise regarding owners’
liability for common works and repairs
affecting tenements. Provided the title
deeds correctly set out the liability for
all the properties in the tenement, the
terms of the title deeds will prevail.
However, there can be a variety of
situations where the provisions of the title
deeds will not apply and in those cases
the liability will be calculated in accordance
with the Tenements (Scotland) Act 2004.
advising a seller on the offer. A well advised
seller is more likely to accept an offer from
a cash buyer, even if the price offered is
slightly lower. Solicitors need to disclose if a
client’s offer is subject to finance, so if your
mortgage has been approved, and you can
confirm that you have funding in place, you
will be at an advantage.
Raising finance through lenders is proving
particularly difficult and you should allow
yourself plenty of time to secure a mortgage.
The hoops through which borrowers and
solicitors must jump to satisfy lenders have
always existed, but those hoops are proving
increasingly challenging.
Sellers
Early preparation of all relevant papers and
a review of them is always time well spent.
One of the issues which can most delay
transactions is the lack of building control
documentation for alterations carried out to
the property. It is extremely important that
this paperwork is in place. For listed buildings
make sure that listed building consent has
not been overlooked for any alterations.
If you know the paperwork has been
misplaced or that consent for alterations
was never sought, you should obtain copies
or apply for retrospective planning consent
as soon as possible.
For both purchasers and sellers the key
to a successful sale or purchase is to be
realistic on price at the outset. This is where
the advice of good estate agents, surveyors
and solicitors can be so important. If a
purchaser or seller’s aspirations are out of
line with the market, it can prove a difficult
obstacle to overcome.
With the property market in its current
state, it is becoming increasingly difficult for
buyers and sellers alike to get transactions
across the line, however, there are steps
you can take to help give your transaction
a head start.
Purchasers
If you are looking to purchase a property
the most important matter to consider is
your financial arrangements. Estate agents
are doing all they can to investigate a
potential purchaser’s financial position before
Thea Roth, Land & Property Senior Solicitor
e. [email protected]
Land & Property 11