Emyr Pierce Solicitors Archives - Page 12 of 17

Oct 22

Ensure your security – and change the locks

I am due to move house in a few weeks time. The property has had several previous owners and was lately used as an investment property occupied by students. Would it be wise to change the outside door locks as soon as we move in?

This is probably something that very few purchasers actually do as they rely on the integrity of their sellers who themselves will presumably have regarded their own security as paramount.

However, when you think about it you have no idea who may have had access to keys at any time and, while the fact that you are purchasing a former investment property will make this point more obvious, it is technically an issue that should be considered by all buyers.

The answer is, of course, should be that to ensure your security you should always consider changing the locks.

Oct 22

Could Bridging Loan save dream house buy?

We have had an offer accepted on our house and were due to exchange contracts last week only for our buyer to withdraw suddenly from the sale of our property. We have placed our property back on the market, but are desperate not to lose the property we wish to purchase. Is there anything we can do to convince our vendor not to look for another buyer? Should we take out a Bridging Loan?

Your success in securing the house of your dreams lies entirely in the hands of your seller. If the seller is willing to wait a little longer in the hope that you can find an alternative buyer then you have a chance of rushing through a subsequent sale to a new purchaser and secure the house.

However, if you are under pressure to commit to the purchase while you still have no buyer for your existing property then this can only be done by arranging finance for the full purchase price of the new property leaving you with, effectively, two properties and, probably, two loans.

It is unlikely that any financial institution will look favourably upon providing you with “open bridge” facilities in the current financial climate. This is where the funds are provided for the full purchase price of the new property while your existing property remains unsold, and is a dangerous step as there is no determining when the loan will be repaid.

The simple advice would be – do not consider an “open” Bridging Loan”!

Oct 22

Swapping homes will not save Stamp Duty

I have finally found a house I wish to buy, the owner of which is keen on buying my own property. If we do a “swap” will I make a substantial saving in Stamp Duty Land Tax?

Sadly the answer is no. It has been many years since the Inland Revenue introduced the rule in which Stamp Duty Land Tax (SDLT) is no longer payable on the “Equality of Exchange” being the term used for the difference between the two sale prices.

Previously, the former Stamp Duty was only payable on the Equality of Exchange, which made exchanges of properties between interested parties a cost-effective and attractive proposition.

When you consider the extent of revenue lost by the Inland Revenue to such transactions this is hardly surprising. A sale of a property at £400,000 would attract tax of £12,000 which, when swapped for a property worth £300,000, the duty of which is £9,000, would have previously resulted in no Stamp Duty payable and a saving of £21,000 as the “equality of exchange” of £100,000 would, of course, have been exempt from Stamp Duty Land Tax.

The current rule, therefore, is that Stamp Duty Land Tax is assessed separately on each property based on the two figures quoted.

Oct 22

Separate Wills for assets in separate countries

I own a property here in Wales and another in France which I want to be able to pass on to my children. Do I need separate Wills in each country to cover each property?

A Will made in each country will deal with the assets owned by you in that particular country. This is the rule predominately in European countries although you need to be very careful with regard to some countries where assets in a foreign country can be deemed to form part of the Estate of the deceased according to his Domicile of Residence.

A well known Court of Appeal case decided that assets held in Nigeria formed part of the estate of a deceased who died in the UK resulting in a huge inheritance tax liability to the Inland Revenue in this country as the law in Nigeria determined that assets in that country would follow the Domicile of Residence, not Domicile of Origin. The deceased was living in the UK so the Nigerian assets were included in the deceased’s UK estate for Inheritance Tax purposes!

EEC countries are consistent in that assets owned in that country are governed by the equivalent Inheritance Tax rules of that country. You, therefore, need to make separate Wills in the both countries in order to deal with your properties at home and abroad.

Oct 22

No viewings Estate Agent charged £530

After almost 16 months of having my house on the market, with not a single viewing, I have decided to change Estate Agents, only to be presented with a bill from the previous Agents for £530 of “expenses”. Are they legally entitled to do this?

This will entirely depend upon the terms of the contract entered into with your original Estate Agent. The majority of agents include in their terms and conditions a specific agreement on the part of the seller to reimburse the agent for incidental expenses, particular advertising expenses, whether or not the property is sold through their agency.

When withdrawing instructions from a selling agent you may well be faced with such expenses, or disbursements, incurred by them during their marketing of your property.

It is increasingly important for you to read carefully the terms and conditions of your appointed agent as these contracts will include such crucial terms as the minimum sole agency selling rights, payments to which the agent is entitled – regardless of whether he is successful in securing a purchaser for the property, and also his entitlement to commission where the ultimate purchaser is initially introduced by the selling agent.

Oct 22

Fixtures and fittings may save Stamp Duty

I am interested in buying a property for £255,000 but am concerned about the stamp duty issue. Can I do anything to minimise stamp duty payable?

The price of £255,000.00 is just over the first stamp duty threshold where Stamp Duty Land Tax (SDLT) changes from 1% to 3%. In other words for the extra £5,000 it is costing you an extra 2% on the overall price.

One way around this is to agree a genuine apportionment of the purchase price as to, say £250,000 for the house and £5,000 for fixtures and fittings which are included in the sale. Please note, however, that this apportionment must be entirely genuine and realistic otherwise it amounts to a fraud of the Inland Revenue.

If you can justify the cost of fixtures and fittings to the tune of £5,000 – and there is no benefit to a seller in participating in any potential fraud – then you will pay £2,500 in Stamp Duty, rather than £7,650. That’s a saving of £5,150.

Oct 21

Surveyor values property less than my offer

I have just received my Surveyor’s Report on the property I am buying and it has been valued at a lot less than I am paying. Does the owner have to reduce the price to sell the house to me? Or shall I pull out of the purchase?

Very rarely are properties undervalued on survey these days. This will usually be only in cases where the property is suffering from an unidentified defect of which you may not have been aware and the Valuer will quote a valuation for the property in its existing state and condition.

It may well be that the property is worth the purchase price once you have carried out the remedial works, but in such circumstances you will face having to pay the full price plus the cost of remedial works.

If there are essential repairs to be carried out, as highlighted by the survey, then you should re-negotiate with the seller to reduce the price either for the full amount of the cost of the repairs or agree some form of compromise. As with all such negotiations, the seller is not obliged to reduce his price.

Another possible reason for an under valuation is that you place a greater value on the property, due to some unique feature, or its position, than the Valuer. This is entirely a personal choice and if you elect to pay a premium for the property for this reason then this is entirely a matter for you.

Be aware, though, that your Lender will rely on the valuation obtained by its nominated Surveyor and will lend on any percentage of that valuation rather than the purchase price that you may be willing to pay.

Oct 21

Can I build a house in the back-garden?

I am interested in buying a house with a very large garden which I am thinking of using to build another property to sell. What, if any problems could I be faced with?

Sometimes people see an opportunity to build another property on the land of an existing house. On the face of it, this may look a very tempting proposition, but BEFORE you spend any money on making offers and expensive planning applications you must check the title to ensure there is no covenant on the title which would prevent the construction of another property – regardless of the fact that indemnity insurance may be available.

Even if insurance is available it may prove to be very expensive, or alternatively you may be faced with a substantial payment in order to release the covenant, which could cost anything up to 40 per cent of the potential development value of the land. The message is – see a lawyer right at the outset so he can make all the necessary checks.

Oct 20

Adding spouse’s name to Property Deeds

I have recently married and would like to add my spouse’s name to the Property Deed of a house I currently own solely. The mortgage is paid, so I would like us to be Joint Owners. Can I do this?

You can transfer a property into joint names by way of a gift at any stage, particularly if the property is mortgage free. The transfer into joint names will be in consideration of your love and affection for your new wife and will represent a “lifetime gift”.

It is a relatively straightforward process and can be completed very quickly and at a relatively nominal cost provided your Title is already registered. If you have an unregistered Title, such a Deed of Gift will give rise to a compulsory first registration at The Land Registry with the Land Registry Fee payable based on the value of the property.

You will need to decide as to the manner in which you own the property jointly; either as Joint Tenants or Tenants in Common. Should you choose to own the property as Joint Tenants then the survivor of you will automatically become sole owner regardless of any Will. If you elect to own as Tenants in Common in equal shares then your respective half interests in the property will be available for each of you to bequeath by way of Will on your deaths.

Your solicitor will be able to advise you on all of these aspects.

Oct 20

Should I move Estate Agent to secure buy?

I have seen a property for sale in the window of a local Estate Agent. I need to sell my own house first but the seller’s agent is pressurising me to sell my house through him rather than my own appointed agent. I do not wish to lose the house I wish to purchase but have been happy with the service received from my existing agent. What should I do?

This is, of course, somewhat unprofessional but it is a fact of life that if an alternative purchaser is also selling their house through the same agent as the seller then that agent will stand to receive two commissions should that particular chain proceed.

I have to say that estate agents are far more professional these days and are acutely aware of professional standards and would not deliberately try and “steal” another agent’s client.

However, there may be a genuine conflict whereby if two parties are interested in the same property – and one of the prospective buyers is also selling their house with the same agent – then the agent may have a greater professional responsibility to that existing client compared with someone like yourself whose property is currently marketed by another agent.

The final word should be that of the seller who, on the advice of their agent, should choose the buyer who appears in the best position to proceed regardless of through which agent that prospective buyer is selling their property.

If you feel that the agent is not communicating your offer or how well positioned you are to proceed to the seller then you could always contact the seller direct to ensure they are aware.