Having shared those initial tips for pub buyers and sellers, it may be useful to give an overview of the conveyancing process once a buyer has been found. Later, I can identify particular problems, difficulties or reasons for delay, and suggest ways of avoiding them or overcoming them.
So, once a buyer is found –
STAGE 1: The selling agents will notify the seller’s solicitor and the buyer’s solicitor of the basic terms of the proposed transaction: parties, price, etc.
STAGE 2:The seller’s solicitor will send a draft contract to the buyer’s solicitor for approval with copies of the legal title (copy Land Registry registers if the land is registered; copy lease if it is leasehold; etc)
STAGE 3: The Buyer’s solicitor will check the paperwork from the seller’s solicitor and raise enquiries to clarify any unclear points, or to point out problems that need to be resolved, and to check that there are no legal defects, etc
STAGE 4: At about the same time, the buyer’s solicitor will submit various searches to various authorities – I will give more details of these searches later. As the results are received, they will be checked against the information already held, and may result in further enquiries being raised
STAGE 5: The seller’s solicitor goes through the enquiries with the seller and (if the seller has followed the earlier tips) will already have a lot of the paperwork needed to deal with them, so that he or she can reply to those enquiries on behalf of the seller
STAGE 6: The buyer’s solicitor will approve the draft contract, probably suggesting various amendments, which may be rejected, or agreed, or themselves amended. Sooner or later, the terms of the contract should be agreed, ready for two copies to be signed: one by the seller and one by the buyer
STAGE 7: Meanwhile, the buyer’s finances should be put in place. These may involve a mortgage loan, in which case the buyer’s solicitor needs to make sure that all the mortgage conditions can be complied with
STAGE 8: Once the contract wording is agreed, the buyer’s finances are in place, satisfactory search results have been received and satisfactory replies to enquiries have been given, the buyer and the seller and sign their copies of the contract and return them to their solicitors – in the buyer’s case with a deposit (usually 10% of the purchase price)
STAGE 9: The solicitors then exchange contracts (by telephone) and the buyer’s deposit is paid to the seller’s solicitor to hold (as stakeholder) until completion. It is at this point that (a) the completion date is fixed and (b) the transaction is legally binding on the buyer and the seller – unless the property is leasehold, in which case see stage 10 below. Until contracts are exchanged, nothing is legally binding, and either party can withdraw from the transaction without paying any compensation to the other. Once contracts are exchanged, the terms of the contract bind both parties and, except in very limited circumstances, neither party can withdraw without penalty
STAGE 10: If the pub is leasehold, it is normal that the landlord’s consent to the transfer of the lease to the buyer is needed. Whatever timescale the buyer and seller have agreed, this is subject to the need to get “licence to assign” first. Usually, the procedure for this will have been started at stage 1, so that there are no unnecessary delays after contracts have been exchanged
STAGE 11: The buyer’s solicitor raises final enquiries about the title to the property, makes pre-completion searches and drafts the transfer and other documents that will transfer ownership of the property, the business, etc, into the buyer’s name, sending them to the seller’s solicitor for approval
STAGE 12: If the draft transfer, etc, are approved (and, if appropriate, signed by the buyer), the final enquiries are satisfactorily answered, the pre-completion search results are satisfactory, and the licence to assign is agreed by the freeholder, the seller’s solicitor will get the completion papperwork signed by the seller, and the buyer’s solicitor will get the completion funds from the buyer (and any mortgage lender), ready for the completion date
STAGE 13: On the completion date, the buyer’s solicitor sends the completion money to the seller’s solicitor, who then sends the completion documents to the buyer’s solicitor; at the same time, if the property is leasehold, the licence to assign is completed
STAGE 14: The seller’s solicitor accounts to the seller for the sale money. The buyer’s solicitor deals with the stamping of the completion documents and the registration of the transfer at the Land Registry (if the property is or needs to be registered)
STAGE 15: The buyer’s solicitor sends the updated title documents to the buyer – or to the mortgage lender, if any
That is a brief overview. Sometimes, stages occur simultaneously or in slightly different orders – often, exchange of contracts and completion are simultaneous, for instance.
Over the next few posts, I intend to expand on each stage, and discuss potential problems and how to avoid or solve them – not particularly gripping in itself, but useful (I hope) to those undergoing the process