What happens after completion

21/02/2016
On the day of completion the balance of the completion money was sent to the seller's solicitor, the seller's solicitors confirmed receipt and agreed for the release of the keys and now you own the property and move in (read our detailed article on What Happens on Completion). For you, the time after completion is used for decorating and unpacking; however for your solicitor there is still legal work to be completed after completion to file your stamp duty land tax return, receive notice from freeholder (if leasehold) and register the property in your name at the Land Registry.

With most conveyancing transactions taking 10 weeks from offer accepted to completion, it may take you by surprise that the legal work after completion may take this long or more to finally register the property in your name. Freehold property is often registered faster because with leaseholds the solicitor needs to get a transfer notice from the seller's solicitors.

It can take anywhere up to 12 months to register your property, however most are registered within 6 months. 

Read on to find out out what your solicitor is doing whilst you are busy unpacking and settling in:

File Stamp Duty Land Tax Return and pay any tax due

Prior to completion you will have paid any stamp duty land tax to your solicitor which your solicitor pays this to Revenue & Customs along with your files land tax return, no later than 30 days after completion. Even if there is no stamp duty to be paid because your property's value is below the threshold, then a stamp duty land tax return is still filed to H M Revenue & Customs.

You can calculate your stamp duty here - Stamp Duty Calculator

(If leasehold) Obtain notice from Freeholder

Often, your lease will contain requirements such as covenants to obtain notice of assignment from the Landlord. This is when your solicitor will give notice to the freeholder of the property that you are the new leasehold owner after completion. There is usually a fee which the landlord will charge for this right and information on this can be found in the lease itself. For those buying with a mortgage, this notice is an absolute requirement.

All covenants must be complied with because any failure can result in the property not being able to be registered! 

Register the property

With your stamp duty land tax form submitted (and notice returned), your solicitor is able to register you as the new owner at the Land Registry using form AP1, i.e. register the change in title. This is compulsory and is considered to be definitive proof of ownership. This is a vital step because, without it, you will not be able to sell or otherwise deal with the property and could even have the entire transaction set aside if the property is resold to another buyer in good faith who subsequently registers the property with the Land Registry.

It is also on the same AP1 form that a mortgage will be registered against the property. If the mortgage is not registered and a subsequent lender loans funds on the property, the first lender will lose priority and could become an unsecured lender. A lender will be very keen to have it confirmed that their investment has been protected and registered at the Land Registry so this is an important step in the post-completion process.

The application must be made within 30 working days from the date of the Priority and Bankruptcy Searches however it can take anywhere from 2 to 6 months for the Land Registry to register the property. The reason for these delays is usually the large backlog of files which the Land Registry is amending. Despite this, it is still vital you register your property within good time!

Register the Declaration of Trust (if Tenants in Common)

If you are buying as tenants in common, it is really important you have a Deed / Declaration of Trust drawn up to reflect how you will be holding your share of the property. When you hold a property as tenants in common, each party owns a specific share of the property and, without alternative arrangement, the sale proceeds will be split in accordance with your share.

A declaration of trust sets out what will happen to your funds on sale and must be registered with the Land Registry as a restriction on the title. This means the property cannot be sold without complying with the terms in the declaration of trust. If this is not registered, the chances of lengthy and costly disputes about the divisions of the proceeds of sale or should the relationship break down is considerably higher.

When a declaration of trust is registered at the Land Registry using a JO form (Joint Ownership), the following is noted against the title:

"No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with Deed of Trust dated [ insert date  ] or some variation thereof referred to in the declaration, statement or certificate." 

Send legal documents to client

After your property has been registered at the Land Registry, your solicitor sends you the following:

 Title deeds or 
 Title Information Document which is a snapshot of information the Land Registry holds about the property (previously called Official Copies)
 SDLT5 as evidence that the Stamp Duty has been paid


First time home buyer guide
 
 
 
 
 
 

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