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New Build Properties
These days, there seem to be new property developments on every corner and more and more people are buying new build properties. Some people assume that the conveyancing process for a new build property is the same as purchasing an existing property. This could not be further from the truth.
For virtually every new build development, the developer will usually spend several months or even a few years in purchasing the land and making it fit for development. Once this process is completed, the developer will start to build the property.
A buyer may purchase a property before construction has begun, or maybe later in the construction process, but often only the show-home will have been seen. Instructing a solicitor who understands how new-build contracts work and has experience in dealing with planning permission implementation and road and drainage adoption is a distinct advantage in achieving a smooth, stress-free transaction.
New Build Properties
How it works
Once a purchaser reserves a property, they are usually given four weeks within which to exchange contracts for the purchase of the property. These time limits should be taken seriously otherwise the buyer may lose his or her reservation fee if the contracts are not exchanged within the given timeframe. It is always important to check the timeframes imposed by the developer and also establish if there is any room for negotiation.
When a reservation on a property is made, the purchaser should immediately instruct solicitors to begin the process of buying the property. This is particularly important as the sales pack produced by most developers is substantial. This means that the conveyancing solicitor has to consider a lot of documents and be able to raise relevant enquiries in good time to exchange contracts.
At the same time, it is important for the purchaser to ensure that they are able to secure a mortgage for the property. Often, especially if a property is being purchased off plan, it will be several months before the development is completed. As most mortgage offers on new build properties expire within six to twelve months, a buyer may wish to secure. It will not be necessary to obtain a mortgage offer before contracts are exchanged. You would normally secure a mortgage offer about a month before the anticipated date of completion. If completion of the build is anticipated to take place by more than 12 months from exchange of contracts, a purchaser should consider at least obtaining a decision in principle from a mortgage lender. Once you exchange contracts, you are contractually bound to complete the purchase. If you failed to complete the purchase on the contractually agreed date, you may lose your deposit. For this reason, it is important for the purchaser to be sure that he or she will be able to secure a mortgage at the time of completion.
Once we become involved in the purchase process, we will liaise with the developer’s solicitors to obtain the draft contract paperwork, raise and deal with any enquiries, undertake searches, and arrange for payment of the deposit funds. There is usually frantic activity in the few weeks leading up to exchange of contracts.
Once contracts have been exchanged, the developer will give an indication of the anticipated date of completion of the building work. We will then work with you to ensure that before completion, you are able to secure your mortgage and that we do the final searches and prepare your completion statement.
After completion, we will of course deal with payment of stamp duty and also register your interest at the Land Registry.