What is Post-completion and how long does it take?

If you have ever sold or purchased a property you may be familiar with the concept of “Completion”. For those who have not done so, completion is the date on which the parties to a transaction physically move to their respective properties, once the solicitors have sent the funds and these have been received.

As far as a seller or purchaser is concerned that is the end of the matter for them, as they are either moving onto their new home or receiving a balance in their bank account. For solicitors, however,  there are still matters to be finalised after the transaction has completed. This is known commonly as “Post Completion”.

The outstanding issues to be dealt with vary, dependent on whether the matter is a sale or a purchase.

This article seeks to explain what takes place after completion on both transactions.

Sale

Mortgage Redemption

Prior to the completion date (and following exchange of contracts) the seller’s solicitors will contact any existing mortgage lender and obtain a final redemption statement detailing the amount required to settle any registered mortgage. This is then paid on completion out of the sale proceeds and evidence is provided to the buyer’s solicitors shortly afterwards, to enable them to finalise registration at the land registry.

Estate Agents Commission

If the seller has used an estate agent to market and sell the property their commission is paid from the sale proceeds.

Title Deeds

These documents are sent to the buyer’s solicitors following completion. The most important document is the Transfer Deed which is signed by the seller in the presence of an independent witness and is the document which formally transfers the ownership from seller to buyer. Other documents could include original guarantees, FENSA certificates (for replacement windows), NHBC certificates (for properties less than 10 years old), planning permissions and building regulation consents.

Ground Rent/Service Charges

If the property is leasehold then any outstanding service charges, ground rent and other amounts payable to the landlord will be settled. If these sums extend beyond the completion date then a completion statement is prepared and sent to the buyer’s solicitors obtaining a refund of the proportion of those charges which will come within the buyer’s period of ownership.

Purchase

Stamp Duty Land Tax (SDLT)

If SDLT is payable, a Land Transaction Return Form for the property must be completed and sent to Her Majesty’s Revenue and Customs (HMRC) within 30 days of completion. This is usually done by the buyer’s solicitor on the buyer’s behalf.

Upon receipt of the above return, HMRC issue a certificate confirming SDLT has been paid and this certificate will need to be sent to the land registry when the application is made to register the property in the buyer’s name.

Land Registry

Once the title deeds have been received from the seller’s solicitors together with any evidence of the discharge of any registered mortgage and the certificate from HMRC, an application is made to the Land Registry by the buyer’s solicitors to change the title register confirming they are the new owner and to register any new mortgage against the property. There is also a fee payable, the amount of which is dependent on the purchase price and the application can be made on paper or electronically.

There may be other documents that need to be submitted to the Land Registry in addition to the above and this will depend on the nature of the transaction.

Once the application has been received it will be processed by the Land Registry and the new copy of the title register will be provided to the conveyancer or solicitor who submitted the application. This document is then sent to the buyer together with any title deeds. It should be noted that registration can take a number of weeks depending on the nature of the transaction, when the documents are received from the seller’s solicitors, and the Land Registry’s workload at the time.

Notices to Landlord/Managing Agent

If the property is leasehold then the buyer’s solicitor will send a notice to either the landlord or managing agent (or both) confirming the completion date, the details of the buyer and details of any new mortgage. There is also a fee payable and the amount varies depending on who the Landlord/Managing Agent is.

The service of the notice is usually a requirement under the lease and allows the landlord to update their details and to ensure any future correspondence/demands for payment are sent to buyer.

Archiving

Once all post completion matters are finalised, in either a sale or purchase transaction the file is then closed and stored in an archive for a period of at least 7 years for a Sale file, 15 years and for a Purchase file. After this period expires the file will virtually be destroyed.

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