Conveyancing Process - From the Highland to the Lowland (or Vice Versa)
Sellers and Purchasers often find it difficult to comprehend the conveyancing process if they have a house to sell in the England or Wales and purchasing a house in Scotland, or vice versa.
Similarities in Legal Systems
The closest both systems got to harmonisation was the introduction of Stamp Duty Land Tax in December 2014 with rules similar to the reforms of the Land and Buildings Transaction Tax which replaced Stamp Duty in Scotland.
- Estate Agency
Local solicitor-operated property centres, for instance, The Highland Solicitors Property Centre are located throughout Scotland and they enjoy a degree of market dominance.
Most solicitor firms in Scotland have an in-house estate agent to deal with the marketing of their clients' properties with 'Schedules' prepared for Scottish properties, similar to English & Welsh 'Particulars of Sale'.
The difference between both legal systems lie at the timing of when the contract becomes legally binding.
Whilst in Scotland, the contract becomes binding at an early stage in the contract (“the conclusion of missives”), in England, contracts are generally exchanged at the very end, and may even be on the same day of completion.
In Scotland, once missives are concluded, neither party can withdraw from the bargain without incurring liability. A breach derived from not fulfilling either party’s side of the bargain, the remedy lies in Scots Contract Law. In England, once contracts are exchanged, the penalty for a purchaser withdrawing from the deal would be the loss of their deposit.
Missives are formal letters of negotiation that pass from the buyer’s solicitor to the seller’s solicitor. English contracts require more preparatory work before an offer can be made and therefore Gazumping exists in England.
- Home report and Surveys
In Scotland the seller provides a Home Report which includes a 'single survey' (typically provided by a Chartered Surveyor), a pre-sale questionnaire personally completed by the seller and an Environmental Performance certificate (EPC). This is often all a purchaser requires and these surveys and reports will also be acceptable to lenders if the surveyor who conducted the Home Report is on their panel. If that's not the case, matters cannot be progressed until the lender instructs their own surveyor. In England, the purchaser instructs their own survey.
- Conclusion of Missives – Exchange of Contracts
Once an offer has been accepted and the seller's and purchaser's solicitors have agreed the terms of the contract through a series of missives, they conclude a contract for the purchase known as the 'Conclusion of Missives'. In England, the contract is amended by the seller and the purchaser’s solicitor until the contract, in its final form is ready to be exchanged.
To comply with legislative changes concerning mortgages, any conveyancer in Scotland tends to delay concluding Missives until the written loan offer is received by the purchasing Solicitor. Solicitors will insert a “suspensive condition” into the offer that proclaims the offer is conditional upon the purchaser receiving a loan. This is so they can guarantee that the purchaser can fund the deal, which is unlike the English system where an offer can be made and accepted only for the deal to fall through because the purchaser cannot obtain sufficient mortgage funding.
- Cross Border Qualification
When moving north of the border, or vice versa, separate solicitors are required to handle conveyancing transactions within Scotland and England. This is because a solicitor dealing with a property in England may not be qualified to practice law in Scotland.
Our Commercial Property Paralegal Jacqueline Ross is a Scottish qualified solicitor, in the process of becoming dual qualified. For advice and information about the difference between both systems, please contact Jacqueline Ross.
Read more about our residential property conveyancing services here.