Law Society's Home Charter Scheme

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The Law Society's Home Charter Scheme is designed to give assured standards of quality. This leaflet explains the basis on which your work will be carried out and what you should do, if at any time, you have any questions or difficulties.

 

THE SALE / PURCHASE

The work involved in selling or buying property has many aspects but the main areas which your solicitor will be dealing with on your behalf are as follows:

  1. Supplying information for your buyer/obtaining information from your seller.
  2. Checking that the sellers are in position to sell the property to you/making arrangements to satisfy your lender that the property is suitable as security.
  3. Agreeing the terms of the contract dates.
  4. Final signing and agreeing completion dates.
  5. Making pre completion arrangements and checks.
  6. Obtaining mortgage monies/redemption figures.
  7. Supervising completion.
  8. Arranging for the registration of the sale on the public record.

In the case of a sale your solicitor will receive the purchase monies and pay off any existing mortgages.  They will also arrange to pay for your new property, if applicable, and forward any balance monies to you with a statement of account.

In the case of a purchase your solicitor will arrange to obtain the loan monies from your lender. There will be additional money required to make payment in full. That will include expenses and taxes paid on your behalf, such as stamp duty, and registration fees. These are dealt with in the section on fees later in this leaflet.

 

MORTGAGES

There are many Mortgage Lenders, each one offering various Mortgage packages, often at different rates.  There are Mortgages with rates which go up and down according to Bank rates and there are other Mortgages which have fixed rates of interest. If you choose a fixed rate then you will find that there is a penalty if you withdraw early from the Mortgage.

In every case when you receive an offer of loan from a lender you should study it carefully and speak to your solicitor to ensure that you understand it. If the loan is not repaid the lender has a right to take the property from you and sell it. This right may only be exercised in certain circumstances and if you, at any time in the future, have difficulty repaying the lender you should immediately consult your solicitor.

Your Lender will require a surveyor to value the property. Please note that unless you ask for a full condition report the survey report which you normally receive will only indicate an approximate value of the property and you will not get a full examination Report.

If you borrow more than 75% of the value then the Lender usually requires a Mortgage Indemnity Policy.  This is a one off charge for an Insurance Policy to protect the lender in the event that they have to re possess the property and sell it for less than the amount of Mortgage then outstanding. The Policy is intended to protect the lender, it will not protect you from losing your house.

It is easy to get confused about the total cost of your mortgage payment per month and you should always insist on a written quotation.

A Repayment Mortgage involves a single monthly payment to the lender. At the end of the term of years fixed by the mortgage the loan will be totally repaid. In the early years the amount outstanding will not reduce much, but this will change as the years progress.

An Interest only Mortgage involves a payment of interest only each month. Therefore at the end of your mortgage term you will still owe the same amount of money you borrowed initially. You should therefore insure you have some form of repayment vehicle in place to allow you to repay the mortgage at the end of the mortgage term.

 

FINANCIAL SERVICES

Your solicitor can obtain quotations and advice for you from Law Society (NI) Financial Advice Ltd/(Independent Financial Adviser). (This is a company which was set up and financed by the Law Society acting on behalf of the solicitor's profession generally. The purpose of this company is to help to provide a wider service for the community and to make sure that independent financial advice is available).  Independent financial advice is getting harder to find as many advisers sell only the financial products of particular investment companies.

There is an arrangement between the company and your solicitor whereby any commission which the company receives as a result of business written is shared with the solicitor who introduces the business.  This, of course, only applies where business is actually written for the client after discussion and advice.  If any business is written for you your solicitor will advise you of the precise amount he or she receives.

If you do use Law Society (NI) Financial Advice it is hoped that you will find them helpful. If they are in any way unsatisfactory please tell us so that we can report the matter to the Law Society so that improvements can be made for the future.

 

SERVICES

You should ensure that companies which supply services such as electricity and telephones are notified of the change of ownership of the property and the date on which the change of ownership will take place so that there will be no disruption of supply. You should ensure that the Rates Collection Agency knows the date of your moving into or out of the house.

 

FEES

A Form of estimate of the firm's account will be sent to you at the beginning of the case. This account is divided into two parts. First there are the fees due to the Solicitor. Secondly there are sums of money spent on your behalf. These are normally called "outlay". If you are obtaining a loan from a building society or other financial institution they will insist on these matters being dealt with and paid prior to completion. The main items of "outlay" are as follow:

1. Stamp Duty

This is a tax on property purchases.  The rates for stamp duty (at the time of this print) are:

£125,000 or less is NIL

£125,001 to £250,000 is 2%

£250,001 to £925,000 is 5%

£925,001 to £1,500,000 is 10%

£1,500,001 and above is 12%

 

2. Search Fees

These are fees paid to check in the various registries that the person selling the house to you has no charges registered against the property and that he or she is registered as owner of the property. If you are selling a property then your solicitor will be required to bring the searches up to date.

3. Property Certificates

These are required from various statutory authorities to ensure that the property complies with various regulations such as Planning and Building Control.

4. Registration Fees

These are paid to the appropriate Registry each time a transaction is registered. For example a Land Registry transaction for the purchase of an average house could cost approximately £450. It should be remembered that these fees are increased by Government from time to time.

 

DIFFICULTIES

The Home Charter exists to ensure that you obtain a quality service. One of the ways in which the quality of our work is checked is by regular and random inspection by the Law Society of the files which members of the scheme are holding. It is possible that your file may be subject to inspection like this. If you have any objection to that being done you should tell your solicitor at once.

If you have cause for complaint you should initially contact the solicitor who has charge of your case. If he is unable to resolve the problem you should contact the senior partner of the firm who is Stephen Chambers. In some cases this may be the same person and in that case, or should the senior partner or firm not be able to resolve the matter, then you can refer it to the Charter Committee of the Law Society of Northern Ireland at 98 Victoria Street, Belfast.

If you feel that the account for professional fees is unreasonable then you have a right to have this matter resolved through an Officer of the Court. Alternatively you have a right within three months of the bill being delivered to seek a certificate from the Law Society of Northern Ireland to state whether the fee is reasonable or what the proper fee should be. Your solicitor is obliged to provide you with full information on these processes should this arise.

This leaflet is designed to provide you with as much information as is possible on the purpose and value of the Home Charter Scheme. If you have any additional queries please do not hesitate to contact this Belfast Law firm on 02890 321 000, or the Home Charter Committee of the Law Society. Both of whom will be only too pleased to help.