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 - 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.
-
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.
-
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.
-
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 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)
-
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)
-
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)
-
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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