Back to Basics: Navigating the post-completion journey

Whether you are buying or selling a property, the process does not stop once completion has taken place. There are many things a solicitor needs to do once completion has been achieved. When selling a charged property, both before and after exchange of contracts, redemption statements should be obtained from the lender of any registered charge and funds should be set aside to settle the amount owing on completion. Once the funds have been processed by the lender, evidence of the redemption and discharge with Land Registry will be produced to the selling solicitor and should be passed to the buyer’s solicitors to evidence to the Land Registry. Estate agents’ fees are also usually settled on the seller’s behalf on completion by the seller’s solicitor and funds tend to be set aside from completion monies such as ground rents and service charges if the property is leasehold (or in some cases, freehold) with a management company looking after the building or communal grounds. If an indemnity policy is required, either a seller’s solicitor will obtain a quote prior to completion or will give an allowance to the buyer’s solicitor to obtain the policy on completion, giving protection to both the buyer and mortgage lender if there is one. Land Registry process With digitalisation of Land Registry’s application process, there is no harm in certified copies of the transfer or lease documents being passed, digitally, to the buyer’s solicitors to enable swift submission to the Land Registry with original copies to follow. There will always be some documents that will need to be dealt with in paper form. Share certificates and stock transfer forms, deeds of covenant and suchlike are generally received by management companies by post and compliance certificates, where there is a restriction on the title register, will be provided for registration with the Land Registry.  The Land Registry may add a restriction to the title register during the registration process. If you are buying with a partner as tenants in common, a declaration or deed of trust should be drawn up prior to completion and signed by both parties. This can then be submitted for registration to the Land Registry. A restriction will be added, giving protection to both parties to ensure that any future sale of the property is in line with the declaration or deed of trust.  Likewise, if you are buying as joint tenants, another form of restriction can be added to the title register that does not allow the disposition of the property by a sole owner and an additional trustee must be appointed to give valid receipt for the proceeds of the sale. This is always a good idea, particularly in light of the recent attention property fraud has received (see Back to Basics: Don’t fall victim to fraud). A property may not have been previously registered with the Land Registry and to be able to register for the first time, title must be provided for at least 15 years leading up to the selling party. All original title deeds should be securely passed to the buyer’s solicitors. The Land Registry does prefer to have original documents sent to it for registration but good-quality, legible, certified copies are acceptable. The Land Registry does not always return original documents, so if a client wants to retain the originals, certified copies should also be sent. Once a property is registered and/or updated with the new owners’ details, a new title register is produced and sent to the lodging solicitor. The Land Registry has undergone a significant change to simplify the registrations process, introducing its digital registrations service. This is to try to reduce the number of requests for information in order to increase the speed in which applications are completed. For those solicitors and conveyancing firms lucky enough to have a dedicated post-completion team, dealings with HMRC, Welsh Land Tax and the Land Registry tend to be under the team’s jurisdiction and, therefore, the team needs to have an extensive knowledge of stamp duty land tax and Land Registry practices, as well as being highly organised and methodical in the approach to applications and submissions. There are many webinars available on the Land Registry website that cover subjects such as “submitting quality applications” and “avoiding requisitions”. While the new digital service is only currently able to deal with applications involving simple transfers and registration of charges, the service will eventually be able to deal with transfers of part, leases and other type of applications, although it has no plans to digitalise first registrations. SDLT SDLT should be discussed with clients at the earliest point in a transaction and all the information needed for a return to be submitted should be collected as soon as possible to ensure the tight 14-day deadline from the date of completion for submission is adhered to. This includes dates of birth and National Insurance numbers or company UTR or VAT numbers. Without this information it is very difficult for a return to be drafted for client approval. Once the matter has completed, any amendments can be made and the return submitted on the day of completion. Likewise, funds to pay the duty should also be collected for immediate payment to HMRC. There may be instances where another property is owned and a higher SDLT is payable. A rebate may be applicable if the new property is a replacement main dwelling and the original main dwelling is sold within three years of completion. Your solicitor may be able to advise, but if they do not offer this service, the assistance of a specialist tax adviser can always be sought. Safeguarding a registration As previously mentioned, there are many things that can bring about Land Registry requests for information, also known as requisitions, but there are plenty of actions solicitors can take to reduce the risks of delays, rejections or cancellations of registration before completion takes place: Compliance certificates: If not dealing with a beneficiary of a restriction directly, request copies of documents and make contact with the beneficiary or their agent/solicitor and supply certified copies to them directly. More often than not, they will supply a copy of their compliance certificate to the buyer’s solicitor directly and speed up your ability to submit the document to the Land Registry. Executions: Make sure you are aware of the different executions clauses and the requirements for each on drafting the documents. Land Registry Practice Guide 8 provides extensive information regarding different types of execution clauses and examples to follow, avoiding the need to return deeds for redrafting and re-execution. SDLT: as previously mentioned, if SDLT is organised correctly, the process can be dealt with very quickly and certificates are available for download immediately. As long as calculations are correct, you can use the SDLT calculator on the HMRC website to assist with calculating SDLT amounts due, all information within the return is correct and approved by the client and funds are held on account for the payment. It should only take a few minutes on the day of completion to process the transaction and obtain the required certificate. – Hint: Bear in mind that SDLT certificates only detail limited information, so if you are dealing with the registration at the Land Registry of multiple properties, it is always good practice to provide the full return alongside the certificate so that the Land Registry can see the properties the certificates cover. Variation of information between documents: All documents submitted for registration should be checked and cross-referenced between their counterparts, ID and title registers and any variations (often the spelling of names and missing middle names) can be dealt with prior to submitting the document to the Land Registry. – Hint: While checking documents for variations, it is always a good idea to make sure you are submitting a full copy of a document and there are no missing pages or parts that have been cut off by a copier or scanner and that all information is clearly legible. With the addition of the “My Applications” section on the Land Registry portal, correspondence such as requisitions and completed registrations can easily be downloaded. However, at the moment, only your own applications can be viewed, although the Land Registry will open this up in due course. An estimated completion date is also provided by the Land Registry, but due to demand for the service and issues around staff shortages stemming from the Covid-19 pandemic, these dates are subject to change or delay. If the delay in completing an application is affecting another application or causing hardship to the intended owner, a request to expedite the application with the Land Registry can be made but evidence must be submitted with the request and these are not always guaranteed to be granted. Katie Beddows is the post-completion team leader at Brabners Photo © Ahmed Zayan/Unsplash