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The government should change the law regarding buying/selling
Propertyfan
Posts: 137 Forumite
There should be a new, defined conveyancing law- an act of Parliament - given the Royal seal of approval so all potential buyers/sellers/estate agents/solicitors/local government depts/other organizations know the rules and legal requirements.
The details are as follows:
1) All property buying/selling in England and Wales requires a contract drawn up and signed as soon as a sales price is agreed. If a buyer wants to buy your property and you agree the price, within one working week of that 'agreement' (the agreement being a written letter sent to both parties by your EA confirming the memorandum of sales), your solicitor draws up a Property Sale/Purchase contract.
Please note this *is not* a contract to be exchanged at the end of the conveyancing. It is a new contract that both parties sign within a week of the sale price being agreed, and these signed copies of the contract are sent to the respective solicitors.
The contract is divided into two distinct sections. Parts 1 and 2. Part 1 concerns the immediate agreement to buy/sell a property. Part 2 finalizes the agreement to buy/sell a property.
Contact part 1 states: "both parties have agreed to the sale price and wish to proceed. Both parties have agreed a 'date of sale'. A condition of signing the contract (part 1) is an agreement on 'a date of sale'." The buyer and seller sign contract part 1.
2) A 'date of sale' has to be given by which time the exchange of contracts is done. Unlike the absurd current system where no date is given and the thing can drag on for months often resulting in numerous extra telephone calls/emails/letters to EAs and solicitors, a date - a reasonable date - must be given by which time all relevant searches/surveys/queries/viewings etc of the property are concluded.
The new conveyancing law will require relevant local authority departments to honour the time frame determined within the contract. In other words, if both parties agree to an exchange within a month, the local authorities/other organizations/solicitors are legally bound to undertake and *complete* all their duties by the specified agreed date. If they exceed the time limit they can be prosecuted/be forced to pay compensation to the buyer/seller/or reported to the governing body (such as an Ombudsmen or the Law Society, or local MP).
With regard to the length of the date of sale - four weeks would seem an appropriate time. The absolute limit would be five weeks. All conveyancing must be done with four to five weeks. Four weeks would be the default time date. If both parties are happy with that then the four weeks time date is set. If the parties wish to extend the date then it's five weeks. If five weeks is agreed, a reason has to be given. Under the new conveyancing law, you can't just say "I prefer five weeks." A reason has to be given, written down in a letter and the other party has to give their consent. Obviously, the other party wants to complete the buy/sale transaction, they don't want to say "no, the deal is off because you've insisted on five weeks instead of four" so they don't won't to disagree just for the sake of it, however, the five week time date is subject to a specific reason being written down in a letter and agreed by the other party. If the reason given is "have yet to receive all the funds to purchase property" then the buyer is legally responsible to provide evidence to the seller/and their solicitor. Just saying "I haven't got all the money, give me another week to sort this out" is not acceptable. The time limit cannot be extended beyond five weeks.
3) Contract part 2. When all searches/surveys/solicitors' letters etc are done the contracts are exchanged. After the contracts are signed and exchanged, contract part 2 is signed by both parties. This ratifies the entire process. The final step is to agree a time for completion where keys are exchanged, furniture is removed, deeds given to the new buyer etc.
4) A buyer or seller will be legally accountable if he/she pulls out of the deal after the signing of contract part 1. This is a critical part of the new law. Once both parties have signed the contract (part 1) they are legally bound to honour it. If the buyer pulls out of the deal after contract part 1 is signed, the seller is entitled to claim damages for money incurred on solicitor's fees and other pertinent expenses. The buyer cannot claim ignorance/lack of cash/or just say "sorry, I changed my mind." The buyer will be legally required to compensate the buyer and if she/refuses, the buyer's assets, up the value of the compensation, will be seized. The same scenario will happen if the seller is at fault and decides to pull out of the deal.
I believe a law like this is the right way to sell and buy properties. I am not the type to seek political office but if I were and became an MP I would champion this cause as a Private Members Bill.
The details are as follows:
1) All property buying/selling in England and Wales requires a contract drawn up and signed as soon as a sales price is agreed. If a buyer wants to buy your property and you agree the price, within one working week of that 'agreement' (the agreement being a written letter sent to both parties by your EA confirming the memorandum of sales), your solicitor draws up a Property Sale/Purchase contract.
Please note this *is not* a contract to be exchanged at the end of the conveyancing. It is a new contract that both parties sign within a week of the sale price being agreed, and these signed copies of the contract are sent to the respective solicitors.
The contract is divided into two distinct sections. Parts 1 and 2. Part 1 concerns the immediate agreement to buy/sell a property. Part 2 finalizes the agreement to buy/sell a property.
Contact part 1 states: "both parties have agreed to the sale price and wish to proceed. Both parties have agreed a 'date of sale'. A condition of signing the contract (part 1) is an agreement on 'a date of sale'." The buyer and seller sign contract part 1.
2) A 'date of sale' has to be given by which time the exchange of contracts is done. Unlike the absurd current system where no date is given and the thing can drag on for months often resulting in numerous extra telephone calls/emails/letters to EAs and solicitors, a date - a reasonable date - must be given by which time all relevant searches/surveys/queries/viewings etc of the property are concluded.
The new conveyancing law will require relevant local authority departments to honour the time frame determined within the contract. In other words, if both parties agree to an exchange within a month, the local authorities/other organizations/solicitors are legally bound to undertake and *complete* all their duties by the specified agreed date. If they exceed the time limit they can be prosecuted/be forced to pay compensation to the buyer/seller/or reported to the governing body (such as an Ombudsmen or the Law Society, or local MP).
With regard to the length of the date of sale - four weeks would seem an appropriate time. The absolute limit would be five weeks. All conveyancing must be done with four to five weeks. Four weeks would be the default time date. If both parties are happy with that then the four weeks time date is set. If the parties wish to extend the date then it's five weeks. If five weeks is agreed, a reason has to be given. Under the new conveyancing law, you can't just say "I prefer five weeks." A reason has to be given, written down in a letter and the other party has to give their consent. Obviously, the other party wants to complete the buy/sale transaction, they don't want to say "no, the deal is off because you've insisted on five weeks instead of four" so they don't won't to disagree just for the sake of it, however, the five week time date is subject to a specific reason being written down in a letter and agreed by the other party. If the reason given is "have yet to receive all the funds to purchase property" then the buyer is legally responsible to provide evidence to the seller/and their solicitor. Just saying "I haven't got all the money, give me another week to sort this out" is not acceptable. The time limit cannot be extended beyond five weeks.
3) Contract part 2. When all searches/surveys/solicitors' letters etc are done the contracts are exchanged. After the contracts are signed and exchanged, contract part 2 is signed by both parties. This ratifies the entire process. The final step is to agree a time for completion where keys are exchanged, furniture is removed, deeds given to the new buyer etc.
4) A buyer or seller will be legally accountable if he/she pulls out of the deal after the signing of contract part 1. This is a critical part of the new law. Once both parties have signed the contract (part 1) they are legally bound to honour it. If the buyer pulls out of the deal after contract part 1 is signed, the seller is entitled to claim damages for money incurred on solicitor's fees and other pertinent expenses. The buyer cannot claim ignorance/lack of cash/or just say "sorry, I changed my mind." The buyer will be legally required to compensate the buyer and if she/refuses, the buyer's assets, up the value of the compensation, will be seized. The same scenario will happen if the seller is at fault and decides to pull out of the deal.
I believe a law like this is the right way to sell and buy properties. I am not the type to seek political office but if I were and became an MP I would champion this cause as a Private Members Bill.
A private members' bill (PMB) in the Parliament of the United Kingdom is a type of public bill that can be introduced by either members of the House of Commons or House of Lords who are not Ministers
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Comments
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Propertyfan wrote: »There should be a new, defined conveyancing law- an act of Parliament - given the Royal seal of approval so all potential buyers/sellers/estate agents/solicitors/local government depts/other organizations know the rules and legal requirements.
The details are as follows:
1) All property buying/selling in England and Wales requires a contract drawn up and signed as soon as a sales price is agreed. If a buyer wants to buy your property and you agree the price, within one working week of that 'agreement' (the agreement being a written letter sent to both parties by your EA confirming the memorandum of sales), your solicitor draws up a Property Sale/Purchase contract.
Please note this *is not* a contract to be exchanged at the end of the conveyancing. It is a new contract that both parties sign within a week of the sale price being agreed, and these signed copies of the contract are sent to the respective solicitors.
The contract is divided into two distinct sections. Parts 1 and 2. Part 1 concerns the immediate agreement to buy/sell a property. Part 2 finalizes the agreement to buy/sell a property.
Contact part 1 states: "both parties have agreed to the sale price and wish to proceed. Both parties have agreed a 'date of sale'. A condition of signing the contract (part 1) is an agreement on 'a date of sale'." The buyer and seller sign contract part 1.
2) A 'date of sale' has to be given by which time the exchange of contracts is done. Unlike the absurd current system where no date is given and the thing can drag on for months often resulting in numerous extra telephone calls/emails/letters to EAs and solicitors, a date - a reasonable date - must be given by which time all relevant searches/surveys/queries/viewings etc of the property are concluded.
The new conveyancing law will require relevant local authority departments to honour the time frame determined within the contract. In other words, if both parties agree to an exchange within a month, the local authorities/other organizations/solicitors are legally bound to undertake and *complete* all their duties by the specified agreed date. If they exceed the time limit they can be prosecuted/be forced to pay compensation to the buyer/seller/or reported to the governing body (such as an Ombudsmen or the Law Society, or local MP).
With regard to the length of the date of sale - four weeks would seem an appropriate time. The absolute limit would be five weeks. All conveyancing must be done with four to five weeks. Four weeks would be the default time date. If both parties are happy with that then the four weeks time date is set. If the parties wish to extend the date then it's five weeks. If five weeks is agreed, a reason has to be given. Under the new conveyancing law, you can't just say "I prefer five weeks." A reason has to be given, written down in a letter and the other party has to give their consent. Obviously, the other party wants to complete the buy/sale transaction, they don't want to say "no, the deal is off because you've insisted on five weeks instead of four" so they don't won't to disagree just for the sake of it, however, the five week time date is subject to a specific reason being written down in a letter and agreed by the other party. If the reason given is "have yet to receive all the funds to purchase property" then the buyer is legally responsible to provide evidence to the seller/and their solicitor. Just saying "I haven't got all the money, give me another week to sort this out" is not acceptable. The time limit cannot be extended beyond five weeks.
3) Contract part 2. When all searches/surveys/solicitors' letters etc are done the contracts are exchanged. After the contracts are signed and exchanged, contract part 2 is signed by both parties. This ratifies the entire process. The final step is to agree a time for completion where keys are exchanged, furniture is removed, deeds given to the new buyer etc.
4) A buyer or seller will be legally accountable if he/she pulls out of the deal after the signing of contract part 1. This is a critical part of the new law. Once both parties have signed the contract (part 1) they are legally bound to honour it. If the buyer pulls out of the deal after contract part 1 is signed, the seller is entitled to claim damages for money incurred on solicitor's fees and other pertinent expenses. The buyer cannot claim ignorance/lack of cash/or just say "sorry, I changed my mind." The buyer will be legally required to compensate the buyer and if she/refuses, the buyer's assets, up the value of the compensation, will be seized. The same scenario will happen if the seller is at fault and decides to pull out of the deal.
I believe a law like this is the right way to sell and buy properties. I am not the type to seek political office but if I were and became an MP I would champion this cause as a Private Members Bill.
Nonsense, what happens if searches/survey show up major issues?
Are you going to force someone to purchase a property that's defective beyond their means to remedy it or sue them for not sticking to Contract Part 1?I have a simple philosophy:
Fill what's empty. Empty what's full. Scratch where it itches.
- Alice Roosevelt Longworth0 -
Just to add - the new law will require mortgage applications to be finalized within five weeks. Under the terms of the new conveyancing law, all mortgage companies will be legally responsible to undertake their duties within five weeks. If they stall they will be open to prosecution.If a buyer wants to buy your property and you agree the price, within one working week of that 'agreement' (the agreement being a written letter sent to both parties by your EA confirming the memorandum of sales), your solicitor draws up a Property Sale/Purchase contract.
This allows the buyer/seller one week cooling off period to consider if they want to go ahead with the deal. One week is long enough. The buyer/seller can pull out within that one week. Once the week has passed the Property Sale/Purchase contract is sent out and you have to sign it.Nonsense, what happens if searches/survey show up major issues?
You going to force someone to purchase a property that's defective beyond their means to remedy it?
Well it's in the buyer's interest to have the survey done in the first week. This will give them the time to consider the results of the survey. As for the searches, they should be completed within the time frame of four to five weeks. If there is a major problem, well, tough. You should have considered that before you signed contract part 1. Put it this way... imagine you see a lovely property near a stream or near a pond. "I love the house, let's buy it." You sign contract part 1 - you're locked into buying it. The next day you notice it's raining rather hard. "Hmm, this rain has got me thinking. If it pours for days will that stream or pond flood my house?" Oh ****, I never realized that."
Well, tough. You should have have considered all potential problems before buying the house. As for the searches, I got all the searches back for the property I want to buy. None said "his house is on a nuclear radioactive site." A survey is more valid than most of these pointless searches which is just pointless paperwork for council employees and other organizations.
Okay... how about this alteration of my suggestion.
Not one week but a two week cooling off period. In that period the buyer can get someone to do a survey of the property. If the survey is good then they proceed to sign contract part 1. Two weeks is a decent enough length of time.0 -
From my extremely limited experience, while I do think there should be a bit more protection in place for both buyers and sellers (but not necessarily in the form that you put forward), I do think there should also be some room for unforeseeable circumstances. There was a thread on here recently about a purchase that fell through because the person at the top of the chain had been diagnosed with cancer. Would it really be right to make that person compensate for x, y and z on top of everything else?First home purchased 09/08/2013
New job start date 24/03/2014
Life is slowly slotting into place :beer:0 -
Five weeks?
Sometimes it can take 5 weeks to even get a freeholder of a flat to acknowledge your existence!0 -
So, in short (chuckle, chuckle) you want to bring many aspects of the England & Wales system into line with the Scottish system?0
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Propertyfan wrote: »
Well it's in the buyer's interest to have the survey done in the first week. This will give them the time to consider the results of the survey. As for the searches, they should be completed within the time frame of four to five weeks. If there is a major problem, well, tough. You should have considered that before you signed contract part 1. Put it this way... imagine you see a lovely property near a stream or near a pond. "I love the house, let's buy it." You sign contract part 1 - you're locked into buying it. The next day you notice it's raining rather hard. "Hmm, this rain has got me thinking. If it pours for days will that stream or pond flood my house?" Oh ****, I never realized that."
Well, tough. You should have have considered all potential problems before buying the house. As for the searches, I got all the searches back for the property I want to buy. None said "his house is on a nuclear radioactive site." A survey is more valid than most of these pointless searches which is just pointless paperwork for council employees and other organizations.
Okay... how about this alteration of my suggestion.
Not one week but a two week cooling off period. In that period the buyer can get someone to do a survey of the property. If the survey is good then they proceed to sign contract part 1. Two weeks is a decent enough length of time.
You know the average IQ is c100 right and not everyone (regardless of IQ) is qualified to identify problems beyond say, common sense issues? That's why people employ other people to investigate these things for them.......
With regards to longer cooling off period: You must allow reasonable time for survey and searches to be done and then the potential for builders to visit to do quotes for required work and negotiating on the price etc should things be awry.I have a simple philosophy:
Fill what's empty. Empty what's full. Scratch where it itches.
- Alice Roosevelt Longworth0 -
Okay, if people don't like my idea (it took me a while to write it too!:D ) how about we keep the current system but with one major change:
Every sale of a property is dependent on a £1,000 deposit. This will cover the solicitor's fees (approx). The deposit is sent to the seller's solicitor in the very first week of the conveyancing process. If the buyer pulls out - it doesn't matter their reason - they lose the £1,000. If the sale goes through, they get back their deposit.
This seems simple enough, fair enough.
Personally I like my first post cos it took me a few mins to write it! It felt like I was writing a huge novel. :rotfl:0 -
I totally agree with people looking for solutions for what seems a very disfunctional property system.
Your time scale seems fanciful sadly I instructed for a survey on the 2nd July and still 8th August 2013 do not have the results!
To many people just taking money in the whole process of property sales.0 -
Propertyfan wrote: »Okay, if people don't like my idea (it took me a while to write it too!:D ) how about we keep the current system but with one major change:
Every sale of a property is dependent on a £1,000 deposit. This will cover the solicitor's fees (approx). The deposit is sent to the seller's solicitor in the very first week of the conveyancing process. If the buyer pulls out - it doesn't matter their reason - they lose the £1,000. If the sale goes through, they get back their deposit.
This seems simple enough, fair enough.
Personally I like my first post cos it took me a few mins to write it! It felt like I was writing a huge novel. :rotfl:
What if the seller pulls out?! It will be the buyer who pays for searches, surveys etc, not the seller....
p.s. I agree there needs to be greater protection on both sides.I have a simple philosophy:
Fill what's empty. Empty what's full. Scratch where it itches.
- Alice Roosevelt Longworth0 -
I doubt there is any safe way to sell/buy property. Too much of it is based on trust and as we all know, us humans are not the most trustworthy of creatures.
Perhaps the thing that irks me the most is the waiting. If people were genuine (had the money) they would love to sell/buy their property in two weeks. It seems the system is designed to drag it out so there's room for doubt. If someone pulls out after six/seven weeks of conveyancing it's a crushing blow to the vendor but if the six/seven weeks was just two/three it wouldn't feel so bad. See my point?
If the whole process could be done within three/four weeks I'm sure there would be less hassle. The present system is like ringing up some call centre and saying to some guy in India: "can you help me?" and he says "please hold the line" and you're still on the phone six/seven weeks later. :undecided That's what it feels like. "And yes, I'm still on the freaking phone! What? No, I can't understand you! Speak slowly. I just wanted to renew my goldfish licence and you've kept me waiting on the line for seven weeks!"0
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