- 1 CHOOSING A PROPERTY
- 2 BUYING AT AUCTION
- 3 PROPERTY TITLE
- 3.1 ‘Title’ to the property means not only the documents that show that you own the property; but also it ensures that no one else can appear and say that they own the property.
- 3.2 There are two types of title in Ireland known as Registered (Land Registry title) and Unregistered title (Registry of Deeds).
- 4 FREEHOLD OR LEASEHOLD
- 5 FINANCE & MORTGAGES
- 6 CONTRACT STAGE
- 7 PROPERTY SEARCHES
- 8 COSTS INVOLVED
- 9 GET A CONVEYANCING QUOTE
INTRODUCTION TO CONVEYANCING
Conveyancing deals with the transfer of legal title of property from one person to another and can also involve the granting of an charge such as a mortgage or a lien over property. It is the name of the process that deals with the transfer and acquisition of land.
Conveyancing generally occurs in three stages: before Contract, before Completion and after Completion. A buyer of property must ensure that he/she obtains a good and marketable ‘title’ to the land; i.e., that the seller is the rightful owner, has the right to sell the property and there is no factor which would impede a mortgage or re-sale.
A system of Conveyancing is usually designed to ensure that the buyer secures title to the land together with all the rights that run with the land (such as rights of way, fishing rights etc..) and is notified of any impediments prior to the purchase. In most jurisdictions, Conveyancing is facilitated by a system of land registration which goes a long way to assure purchasers of land that they are acquired by title.
CHOOSING A PROPERTY
Firstly, pick out a property that you want to buy. There are a few questions that you should ask about the property at the auctioneer’s office to make sure it is suitable for your needs for example vehicle access etc. Be inquisitive and don’t be afraid to ask.
You should ensure that the property is it within your price range. We would all like to live in a large house with two storey’s and six bedrooms but we have to be pragmatic and know what we can afford or what our bank will be satisfied to lend to us.
You must ensure that the house is a good investment for you and consider items such as the area where the house is located; its proximity to the cities, towns, and amenities such as schools, shops, etc. whether or not it is near a motorway or is it in the line of a planned motorway.
BUYING AT AUCTION
Most property is bought and sold privately in nowadays, property is also sold by way of public auction. Attending an auction can be a daunting task for a proposed purchaser. In this situation it can be advisable to instruct a solicitor to make the necessary precautionary enquiries. He or she will also attend the auction with you if desired. It is also advisable to have a survey carried out on the property prior to the auction.
Prior to the auction, the title will have to be investigated and the finance will have to be in place before the auction begins. If you place the highest bid, you are committed to the purchase that is once your bid has been acknowledged as being successful. You will have to pay a deposit immediately and the balance is then due within four weeks.
‘Title’ to the property means not only the documents that show that you own the property; but also it ensures that no one else can appear and say that they own the property.
There are two types of title in Ireland known as Registered (Land Registry title) and Unregistered title (Registry of Deeds).
The owner of property that is registered in the Land Registry will have a folio which is a unique identifier number. This document denotes the name and address of the owner, a description of the property and a map of the property known as the file plan. The folio is conclusive evidence of the person’s ownership of the property. When Land Registry property is being sold the folio must be produced in order to successfully sell the house.
Registry of Deeds title is title that is registered with the Registry of Deeds. This is a much older type of registration of ownership and is much more cumbersome.. This happens where the title has accumulated over time. Such documents would include Deeds of Conveyance which transfers freehold-unregistered land or Deeds of Assignment which are used to transfer leasehold unregistered land.
On completion of a sale of unregistered property the purchase deed is lodged with the registry of deeds where the details of the registration and the time of the registration are noted on the Deed. The motivation and the reason for registering a deed in the Registry of deeds is that the time of Registration gives priority to the first deed e.g. if two mortgages on the same property are lodged on the same day the one that is registered first will have priority over the deed registered subsequently.
FREEHOLD OR LEASEHOLD
Land in Ireland is either freehold or leasehold. A freehold interest in property is the highest interest that can be held by an individual and in general such an owner is free to do as he wishes with the property.
A leasehold interest is less than a freehold interest in that it is for a term of years only and will end at some date in the future. In these circumstances, the owner of the freehold is granting a lease for a number of years. It creates a relationship of landlord and tenant. There have been significant changes in the law that relate to the private rented residential sector, which is now governed by the Residential Tenancies Act 2004.
FINANCE & MORTGAGES
Before choosing a property the purchaser must make sure that they have enough money for the purchaser or otherwise has secured a mortgage for the value of the proposed purchase.
The market for home lending is competitive between the banks and the various lending institutions at present. It is vital for anyone who is considering purchasing a house to consider the financial commitment involved.
The lending institution should be approached at the outset of the proposed purchase. They will provide you an indication of the amount they are willing to lend you. You will then know how much you can spend and the type of house and the area that you will be looking in.
The bank will require you to complete an application form and give them certain information as regards your financial circumstances and income. When a borrower and a lender enter into a mortgage transaction the lender takes a legal charge, more commonly known as a mortgage, over the property. This is the security for the loan in case the borrower fails to repay the mortgage.
Contracts for the sale of land and houses must be in writing. The legislation governing this states that any agreement to sell land be evidenced in writing.
At a very least, it is necessary that there be written evidence in relation to the parties to the agreement, the property and the price paid. Generally speaking, most conveyances use the Law Society’s standard form of particulars and conditions of sale.
The following matters are dealt with in the contract;
- Consent of a non-owning spouse under the Family Home protection Act 1976. As a spouse cannot sell any property, which is a family home without the consent of the other non-owning spouse. This must be a prior consent and accordingly must be endorsed on the contract prior to it being signed by the spouse who is the owner of the property.
- Includes the names and addresses of the parties.
- Provides details the purchase price and the deposit.
- Makes provision for the closing date. This is the date on which the parties to the contract agree the deal should be closed, the purchase monies paid over and the Title deeds and the keys to the property handed over.
- The contract will also list the documents, which have been provided to the prospective buyer prior to the contract being signed. A purchaser who signs the contract without inspecting all the documents which have been made available to him is deemed to have been on full notice of them and deemed to be aware of their contents and by the consequences of any onerous conditions which may appear on them.
- The contract also includes a number of standard conditions. The most significant of these contains the procedure to be followed when a property is bought and sold at auction, a number of warranties and in particular a warranty that any development of the land since 1 October 1964 has full and proper planning permission.
- Any house built since 1 October 1964 requires Planning Permission. It is the responsibility of the purchaser’s solicitor to ensure that the necessary planning documents are in order. An architects certificate will usually be required confirming that a second hand house was built in accordance with the conditions of the planning permission.
Searches are enquiries that a purchaser’s solicitor should make in the course of purchasing property.
There are some, which should be made before the contract is executed, and some which are made on the closing date of the transaction.
The pre-contractual searches include:
(a) Planning search: Which can be made in the planning office. This will let the purchaser know how the property is zoned, be it residential, commercial or otherwise; whether or not any applications for planning permission in respect of the property have been granted or indeed rejected.
(b) A Licensing Search: this will arise when the property is a hotel or a public house. It will establish the nature of the licence and the extent to which the premises are licensed.
(c) A Compulsory Purchase Order Search: This can be made with local authority. If a CPO has been made the vendor can no longer give good title as the title no longer vests in him strictly speaking.
The following searches are done on the day of closing:
(a) A Land Registry search: This is a search in the land Registry to find what the up to date position is with regards to the Folio. It should establish the ownership of the property, the title whether absolute or possessory, whether it is leasehold or freehold, whether or not there are mortgages, rights of residence or other restrictions on the folio.
(b) A Company Search: This is a search made in the Companies Registration Office, which will confirm that the company exists and is still on the register and also will disclose any charges, which exist against it. It will also disclose the existence of a winding up order or petition. It is normal on closing to get a certificate from the Company Secretary certifying that no resolution has been passed.
(c) A Judgement Search
(d) Bankruptcy Search
(e) Sheriff and Revenue Sheriff Searches
(f) Registry of Deeds Searches
A person buying a house must be aware that there are a lot of other hidden costs involved apart from the purchase price of the house.
(a) Stamp Duty
This will apply to all transactions involving the purchase of property. The duty will depend on the value of the house. It is currently 1% of the purchase price if the market price of same is less than €1,000,000.00
(b) Search Fees
Will vary depending on the extent of the enquiries to be made.
(c) Solicitors Fees
Varies from solicitor to solicitor and quite competitive at the moment. (Contact Quinn Solicitors here for a quick quote).
(d) Surveyors Fees
Again depends on the details of work to be done but it is essential for a surveyor to assess the condition of the property
(e) Registration Fee
These are the costs associated with registering the title with either the Registry of Deeds or the Land Registry.
It is vital that adequate insurance be put in place covering the structure of the property when the purchase is completed. It is the seller’s responsibility to have the property insured up to the date of the closing and then once the deal is completed it is up to the purchaser to insure same.
The lending institution will also insist that mortgage protection insurance be taken out. This ensures that if the borrower dies that the proceeds of the mortgage protection insurance will pay off the outstanding amount due on the mortgage.
GET A CONVEYANCING QUOTE
Quinn Solicitors are expert property solicitors and offer a competitive and fast conveyancing service. Contact us below for details.