Documents for buying and selling houses explained

EPC

An Energy Performance Certificate, or EPC, measures the energy efficiency of a property on a scale of A to G – with A being the most energy efficient and G the worst. Homes with the lowest fuel bills are those that are most energy efficient. Estate agents should provide the energy efficiency rating of a property in the listing details. Additionally, the EPC provides recommendations on how to improve the home's energy efficiency to save you money and protect the environment.

Protocol forms: TA6, TA7 and TA10

All buyers and their conveyancers will want certain information when someone sells a house. In order to standardise this process, the Law Society created the following forms to ensure everyone provides the same information in the same format:

• The TA6 form contains information such as the property's boundaries, utilities, and changes made to it.
• The TA10 form lists the fixtures and fittings that will be left behind, taken, or available for purchase.
• The TA7 form asks for further details if you are selling a leasehold property.

LPE1

LPE stands for Leasehold Property Enquiry. If you are selling a leasehold property, you won't be the only one who needs to complete a form containing standard information, your landlord, or managing agent will as well. In most cases, this is a chargeable service.

Memorandum of sale

Once an offer has been accepted on a property, then the estate agent prepares a memorandum of sale containing the following information:

• Who the buyers and sellers are;
• Who the conveyancers are;
• The address of the property;
• The price agreed upon.

This is then sent by the estate agent to the seller’s conveyancer and the buyer’s conveyancer. It isn’t a legally binding document but is used to pass information to get the conveyancing process started.

ID

All the professionals you deal with during a property transaction will need to verify your identity.

Unfortunately, criminals see the buying and selling process as a way to launder money and they are always inventing new ways to infiltrate the system. Confirming your identity is a key part to preventing this kind of criminal behaviour and is a requirement of property professionals under the Anti-Money Laundering Regulations.

For UK residents, the most common evidence of identity will be one of the following original documents – copies are usually not accepted:

• Current signed passport
• Birth certificate
• Current photo-card driver’s licence
• Proof of address

Sales and purchase agreement

During your property transaction, you will be asked to sign a contract. Up until that point, it is still possible for any individual to change their minds without incurring any penalties. However, once both parties have signed their SPA and made an “exchange of contracts”, they are legally obliged to proceed with the sale and purchase of the property.

Transfer deeds - TR1 and TP1

Whilst the contract obliges someone to sell and someone to buy a property, it doesn’t actually move ownership of the property. This is done by the transfer deed, which is used to tell the Land Registry that the ownership of a property has changed to another party. It will be sent to the Land Registry after your property purchase is completed so that they can update their records.

The difference between a TR1 and TP1 transfer deeds is:

• A TR1 is used when the whole of a title has to be transferred or when a property is being registered for the first time. The TR1 form is mainly prepared by the conveyancer representing the seller.
• A TP1 is used when only part of a title has to be transferred. For example, a house and garden are registered under one title, and you want to sell part of the garden. As a result, the TP1 must include a plan identifying the land being transferred.

Mortgage offer

To find out how much money you can borrow before buying a house, you may wish to consult with a bank, a building society, or mortgage broker. Based on your conversation with them, you will then receive an “offer in principle”, also called a “mortgage in principle” or “agreement in principle”.

Once you have found a house, you will ask your mortgage lender for a mortgage. Thereafter, they will issue a formal mortgage offer for that property, that will exactly detail

• how much you are borrowing;
• How much you are paying for the house;
• The interest rate;
• The repayment terms;
• Any special conditions that the mortgage company wants you to comply with.

Mortgage deed

A mortgage deed states that you and the mortgage lender have agreed to use the property as security for the mortgage. As part of the process, the mortgage deed is also sent to the Land Registry, so they know there is a mortgage on the property.

Lease

If the property is a leasehold, you will also require a property lease agreement. If a property is leasehold, you don’t own the whole building, only part of it and for a specific period of time known
as a term. It is similar to a tenancy agreement, but for a much longer period. The lease details:

• What you own;
• How long you own it for;
• The amount you must pay;
• Any other rules that affect the property that you own the leasehold of.

Property report

During the purchase of a property, your conveyancer gathers information on your behalf in a property report. The function of this document is to clarify things for you, so that you fully understand everything you need to know about the property, before signing any contract.

Local search

This search is done by the local council and provides details about planning permissions, building regulations, conservation areas, and listed buildings. It will also tell you if the council has done any work on the property, or lent someone money to do work on the property that needs to be repaid.

For instance, if a previous owner had the house adapted for an occupier with a special need or disability and the council paid for that, then they might expect to be paid back.

It is worth noting that this report only covers the property you are buying. Therefore, if you want to know if a neighbour has planning permission to build an extension in the future, you will need a special report.

Water and drainage search

It’s important to know if the property is connected to mains water and sewerage. In the absence of a connection, there is probably private water supply or sewerage. Your conveyancer will therefore need to find out who owns it and what rights the property has to use it.

Environmental search

An environmental search is a conveyancing search that gives details of the past uses of the land and the land in the vicinity of the property. It will tell you whether past uses are likely to have caused any potential contamination of the land.

Many homes are built on or near land previously used for industrial purposes, and the by-products may still pose a health threat from contamination of the ground where the house is built. Environment searches will also tell you if the property has been flooded in the past and, therefore, would be likely to flood again.

House insurance

When you insure a house, you insure two things – the building and the contents.

As mentioned above, buildings that are leasehold don't belong to their owners. Consequently, the landlord or the managing agent will usually insure the building, and the leaseholder is expected to insure the contents.

If you own a freehold property, you need to insure the building and the contents.

Indemnity insurance when buying a house

In some cases, there might be something missing in the information about the property. For example, a document can be omitted or a right of way for a rear path isn’t in the deeds.

An indemnity policy can sometimes overcome this problem. When it occurs, your conveyancer will ask the seller’s conveyancer to put this insurance policy in place at their cost.

You need to know that the insurance doesn’t resolve the issue. In the example of the missing right of way, if someone stopped you using the right of way for the rear path, then the insurance wouldn’t allow you to keep using that right of way. However, it would mean that you could make a claim for any loss in market value of the property, because it didn’t have that right of way.

If you have a mortgage, then the mortgage provider has to be willing to rely on this insurance and not have the problem fully rectified.

Title deeds and boundaries

Title deeds used to consist of a pile of handwritten documents that tracked the history of the property each time it was transferred or mortgaged.

These days, most of that information is computerised, and copies of the title register are provided by the Land Registry. Title deeds contain information about the rights that affect the property, who owns it, whether the property is mortgaged, and a title plan which shows an estimation of the boundaries.

An old (paper) deed might still need to be seen if a lot of information has been tracked over time, and it hasn’t been summarised in the title register. The Land Office has scanned a lot of deeds, but some of them are still missing. Therefore, if you still have some old deeds, it is best to keep hold of them and pass them on to any buyer of the property.

Frequently asked questions

Is providing an EPC a legal requirement?

Yes, it is a legal requirement to have a valid EPC when selling your home. If a property is listed without a valid EPC, the seller and agent can face a fine of up to £5,000.

If you need a new assessment, you’ll need to get an accredited energy assessor to visit your home and assess the property to provide a rating.

How do I get a copy of my property’s title deed?

The title deed proves you own your property, you’ll need it to sell your home. If you can’t find it, check with your mortgage lender or conveyancer to see if they held it for safekeeping.

Furthermore, your conveyancer will need to obtain a copy for you from Land Registry, so you shouldn't have any issues.

What is a TR1 document?

The TR1 form is a legally binding document that officially transfers complete ownership of a property from one party to another. It can also be used to register an unregistered property with the Land Registry.

What is a TP1 document?

The TP1 form is a legally binding document that is used when you are transferring part of your property to another party. For example, if your house and garden were under the same title, and you want to sell part of the garden, you would use a TP1 form.

What is the difference between a TR1 and a TP1?

The difference between a TR1 and a TP1 is their usage for transferring property ownership. The TR1 is used when the entire property is being transferred to a new owner. The TP1 transfer deed is used when only a portion of a property title needs to be transferred, such as a section of land.