Thursday, October 28, 2010

A Brief Overview of Conveyancing in the UK

Conveyancing is a legal term describing the transfer of title of property from one person to another. In simplest terms, conveyancing is the process whereby one person buys and takes ownership of a property from another person.

Conveyancing can also be used in reference to the granting of an encumbrance against a property, such as in the case of a mortgage or a lien.

Conveyancing is also often used in the context of moving bulk commodities, as well as in the context of providing public services like water, electricity and gas. But these uses of the term conveyancing are beyond the scope of this article, which will deal solely with conveyancing as it pertains to real estate.

History of Conveyancing

The modern system of conveyancing is rooted in English legal systems dating back to 1290 that are now referred to as "Old System Title."

Old System Title was an overly complicated system that required a series of different kinds of documents to establish proof of ownership.

In 1857 the system was greatly simplified by Sir Robert Torrens of Australia when he introduced the Real Property Act, which provided land owners with a single title certificate. The concept of the Real Property Act, more commonly known as the Torrens system of title registration, was quickly adopted by England, New Zealand and parts of Canada and the United States.

The Conveyancing Process

The conveyancing process has three stages: 'before contract,' 'before completion' and 'after completion.' During the process, there are two major milestones: the exchange of contracts and the completion of title transfer.

During the 'before contract' stage, it is prudent for the buyer to ensure that the seller is in fact the legal owner of the property, has the right to sell the property, and that there are no other factors involved that would later prevent the buyer from obtaining a mortgage on or re-selling the property.

The modern conveyancing process itself is designed to ensure that the buyer is obtaining not only title but all other rights to the property. Any possible restrictions on those rights must be made clear prior to the exchange of contracts, the point at which the transaction becomes legally binding.

Hiring a Solicitor

Despite the aforementioned simplification of property transfer, conveyancing can still be a somewhat complicated process, and certainly one where mistakes or overlooked details can have far-reaching consequences. As such, most people, while legally entitled to conduct their own conveyancing, turn to a solicitor or licensed conveyancer to handle the process.

After the buyer and seller negotiate an acceptable price for the property, both sides hire a solicitor or conveyancer. The seller's solicitor prepares a draft contract for the sale of property, which must then be either approved or amended by the buyer's solicitor. This process ensures that all rough edges are worked out before the legally-binding exchange of contracts.

1 comment:

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