Disbursements continued (2)
Environmental search
An
environmental search is carried out with an agency
that provides such searches. The law does not
currently require local authorities to keep a
register of contaminated land. An environmental
search will check whether the land upon which the
property is built has been contaminated. New
properties are often built upon old landfill sites
or upon sites that were previously used for
commercial purposes. It is now a legal requirement
that developers survey land intended for building to
ensure it has not been contaminated. If it has been
contaminated the developer must decontaminate the
land before building upon it. However, this was not
always the case and some property is built on land
that is contaminated. An environmental search will
also check whether the property is affected by
flooding or other environmental risks or hazard
(such as factories or commercial outlets nearby).
You can currently obtain a free mini environmental
search (which cannot be used for legal purposes)
from
www.homecheck.co.uk.
Mining
searches
There are various
types of mining carried out in the UK today. These
include coal, chalk and tin. Your solicitor will
check if the property you wish to buy is in a mining
area and if so will carry out a search to ensure
that the property has not been/will not be adversely
affected by the mining activities.
Chancel repair search/check
In the past when
the Church sold off or gifted land they sometimes
required the new owner to pay towards the upkeep of
the church or its lands. Some property is still
subject to this liability. There was a recent case
where one unsuspecting couple were forced to pay
hundreds of thousands of pounds to the church
because their property was subject to this
liability. If you solicitor believes that the
property you wish to buy may be subject to this
liability they will carry out a chancel repair
search/check.
Commons registration search
Some land was
formerly ‘common’ land. This means that the public
have rights to pass over it and occasionally to
graze sheep and cattle, gather wood etc. If your
solicitor suspects that the property you wish to buy
may have been registered as ‘common land’ they will
carry out a commons registration search. This search
is typical upon properties that front a village
green or common land.
Land Registry search
When you buy,
transfer or mortgage a property your solicitor will
search the
Land Registry to check that no one has
registered a claim or a right in the property since
the Official copies were issued by the Land
Registry. This ensures that you do not buy a
property that has a financial charge or other right
registered against it.
Land Charges search (also known
as a bankruptcy search)
When you buy or
mortgage a property your solicitor will carry out a
search against your name in the Land Charges
register. This search will reveal if you are
currently bankrupt, are an un-discharged bankrupt or
are about to be made bankrupt.
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Telegraphic transfer fees -
If you are buying a property your
solicitor will have to send the purchase money
to your seller’s solicitor by telegraphic
transfer. If you are selling or re-mortgaging
your solicitor may have to repay your existing
mortgages or loans by telegraphic transfer. The
bank makes a charge for this and the solicitor
passes that charge onto you.
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Local search indemnity insurance
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If you are buying or
re-mortgaging a property and do not want to have
a full local search carried out, if your lender
agrees, your solicitor can obtain local search
indemnity insurance to protect your lender/you
against any problems that might have been
revealed in a local search.
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Other indemnity insurance -
Indemnity insurance is widely
used by solicitors to deal with problems in
deeds, leases, insolvency, restrictive
covenants, missing landlords etc. This insurance
is arranged by the solicitor and the premium is
paid by you.
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Leasehold disbursements -
Your solicitor should not include any fee for
dealing with a lease in the disbursements
section as this should be included in their
conveyancing fee. You will however find that you
must pay your new Landlord a Landlord’s
notice fee for registering you as the new
owner and your lender as interested as a
mortgage lender. If there is a separate
management company you may have to pay a
Management Company fee for registering you
as the owner and your lender as the mortgage
company. Occasionally, Landlords and/or
Management companies may require new tenants to
sign a document agreeing to obey the terms in
the lease. This document is called a Deed of
Covenant. The Landlord/Management company
may make a charge for supplying and registering
this deed. You may also find that you are asked
to pay Ground Rent, Buildings Insurance and
Service Charge in advance.
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New properties and some ‘Right to
Buy’ properties -
When you buy a property from a developer, the
local authority or a housing association they
insist upon providing a standard form of
Transfer deed. They usually make a charge for
this known as an Engrossment fee which
must be paid by you.
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Value Added Tax (VAT) -
Where VAT applies to the solicitor’s charges and
the disbursements this will be shown.
Additional Leasehold Property Disbursements
The following
disbursements may also apply:
A Notice Fee to the Landlord for stamping the
Notice provided by your solicitor to the Landlord
notifying that you are the new owner and details of
your mortgage company. An average would be £75 plus
VAT but this does vary enormously from nothing up to
£200. It depends on the Landlord. Your solicitor
will find this out and notify you at the earliest
opportunity.
If
there is a separate management company they may
also require a notice and may also charge a fee.
Again your solicitor will find out what this is and
notify you as soon as possible.
Ground Rent/Service Charge. Sometimes the
Vendor has paid in advance to the end of the year
and you might need to repay part of this.
If it is a new lease there will be a small
amount of extra stamp duty and land registry fees.
This is worked out on the ground rent and the term
of the lease and again the solicitor will notify
you at the earliest moment.
Items
that may be listed as
disbursements which are not
genuine
disbursements
(hidden extra solicitors fees to watch out for)
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Legal fees for acting for a
mortgage lender.
Unless your
lender has appointed their own solicitor (i.e. a
different solicitor to the one you are using)
the fee charged for acting for a mortgage lender
will be paid to your solicitor and should
therefore be shown as part of their total
conveyancing fee. This fee may be charged
separately by your solicitor on a purchase or a
remortgage and even for dealing with repayment
of a mortgage on your sale.
(CMS
do not charge this fee)
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Solicitor’s indemnity insurance.
By law all solicitors must carry
indemnity insurance of at least £1 million
pounds to protect their clients against that
solicitor’s negligence or fraud. Some firms try
to pass the cost of this insurance on to their
clients. (CMS do not
charge this fee)
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Petty disbursements.
This is a notional charge for telephone calls,
photocopying, faxes and postage. In fact it
forms part of the solicitor’s fee for the
conveyancing and should be included in the total
conveyancing fee quoted by the solicitor.
(CMS do not charge this
fee)
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File storage.
Solicitors are
obliged to store your file for six years and
some store for at least twelve (as recommended
by the Law Society). Some solicitors seek to
charge you for the storage of your file.
(CMS do not
charge this fee)
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Expedition fees.
Some firms of solicitors charge extra if you ask
them to complete a transaction as a matter of
urgency.
(CMS do not
charge this fee)
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Search packages.
Some firms
charge inflated prices for a search package. We
have seen the price of search packages quoted at
up to £100 more than the actual cost of the
package. The solicitor collects the fee for the
package, pays for the searches and keeps the
difference as conveyancing fees.
(CMS solicitors
charge only the actual cost price of searches)
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Identity check.
By law all
solicitors must check your identity. This is
done by obtaining from you suitable identity
documents. Some firms charge extra for this and
hide the fee in the disbursements section
(CMS do not
charge this fee)
CMS Guarantee to better
any other genuine quotation
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