Q. My solicitor says I need indemnity insurance & declaration of solvency as I'm being gifted money - why do I need this?
A. If money is being gifted and the person gifting the money becomes insolvent the trustee in bankruptcy could set aside the transaction. A statutory declaration of insolvency confirms there is no insolvency at the date of the transaction, i.e that the person making the gift can meet their liabilities as they fall due. An indemnity insurance policy is an insurance policy covering the future insolvency of the person making the gift.
Q. On average, how long does it take to carry out searches on a property?
A. It very much depends on the location of the property. Most of the searches come back within 48 hours of submitting the same. It is the Local Search which takes more time, it can take anywhere between 24 hours and in some instances 6 weeks! The best way to find out the time frame is to speak to the Local Authority's land charges department to check their current turnaround time as it frequently changes.
Q. We're currently in rented accommodation, when should we tell our landlord we're moving to the property we're purchasing?
A. Only advise your Landlord by serving your notice upon exchange of contracts when you are legally bound to purchase the new property. Until exchange of contracts you are not legally committed to buying the new property.
Q. Can my home buyers survey be done by anyone? I've heard that the surveyor needs to be approved by our lender?
A. A homebuyers survey can either be carried out by an independent surveyor or one appointed by the lender. In any event a lender will ask that you pay for a valuation for the mortgage but a valuation is given in a homebuyers survey so you can upgrade a valuation to a homebuyers survey to save paying for the same thing twice. You should ensure the surveyor is RICS accredited. There are three levels of survey:
(a) Valuation
A valuation is often carried out by a Building Society or other Mortgagee to assess the condition and value of the house but it is not a structural survey and in no way guarantees that the house is structurally sound or without defects.
(b) Home Buyers Report
This is a standard form of report under guidelines laid down by the Royal Institute of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers. Such a report provides comments on the condition on the parts of the property which are readily accessible and may include recommendations for further tests or investigations. This sort of survey is normally adequate for any house which is reasonably modern.
(c) Full Structural Survey
This is a more detailed examination of the property and its structure and it is advisable to have this sort of survey for older properties or for any property where there is reason to suspect that there might be a structural defect.
Q. What is a chancel repair search? A friend advised me we should have one done as we're buying in a village near a church
A. The liability for the payment of chancel repairs is an ancient obligation placed upon the owner of a property to contribute towards the cost of maintaining the chancel of a church. Until recently it was not considered essential to carry out a chancel repair search but a 2003 case has highlighted the fact that the English courts will still enforce this liability. The liability attaches to land and can therefore affect a relatively new property.
The rules changed in October 2013 so that if there has been a disposition (transfer of the property) for value since October 2013 the liability no longer applies.
Q. Are there any risks or negatives to buying as tenants in common in unequal shares as opposed to buying as joint owners?
A. This is a very complex area of law and would very much depend on personal circumstances, in a nutshell Joint Tenants means that if one of you dies his or her interest in the property passes automatically to the surviving owner(s) regardless of what your Will might say. In the instance of Tenants in Common on the death of one co-owner, the deceased person's interest will not automatically pass to the surviving owner, but will fall into his or her estate and be distributed in accordance with the terms of his or her Will, or if no Will has been made, under the intestacy rules so the living co-owner will not automatically own the whole property. It would be best to speak to a will lawyer as well as a property lawyer. Families and financial affairs are now more complex than they used to be so ensuring your assets are in order can avoid a lot of difficulty going forward.
Clapham & Collinge Solicitors we have a dedicated team of expert solicitors and legal executives who can provide you with all of the necessary information, support and legal advice, in relation to your house sale or purchase. Contact us today on 01603 693500 or email us using 'Make an enquiry' form.
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