Conveyancing for property investors

What sort of conveyancing issues are property investors more likely to face than residential buyers? The conveyancing process for buy to let should be no different to a residential transaction but unfortunately problems are created. With a remortgage in a personal name lenders may offer you a choice of cashback or free legals. The solicitors that do free legals have had their fees hammered by the lenders over the years and do it for a pittance. As a result of this a simple remortgage transaction may take much longer as the solicitor doesn't always have the right quality of staff to deal with the volume of cases they receive . If you have a choice choose the cashback as that would normally cover the cost of your own solicitors. Completing on any mortgage is satisfying both the solicitor and the lender with a list of information that is requested so the sooner this is provided the less issues you will have. The solicitor will require a current AST for the property if let and with some lenders it needs certain clauses so the tenant is aware the property is mortgaged. A copy of the valid insurance for the buildings is also needed as well as a valid EPC of A - E or exemption if applicable. You may also be asked for details of any selective licencing in the area by the local council, copies of right to rent, electrical and gas certificates, building regulations if work has been done. If the property is a House of Multiple Occupation then planning and licensing will also be looked at. How can property investors avoid complex and costly issues that crop up during conveyancing? Some of this information will be detailed on the lenders mortgage offer so read it and see what's needed. Also get a list from your conveyancer of what is required at the beginning and send all the documentation to them as early as possible within the process A lot of transactions in BTL are by limited companies and all lenders have a preferred panel of solicitors they trust to do the conveyancing process. You can get a copy of the list from the lender or if you use a broker they will have access to it. If your preferred solicitor is not on the panel with a minority of lenders they can be added. You then have a choice of paying both sets of solicitors fees which is more expensive and will take longer or using a firm that is on the lenders panel. In addition with most lenders you have the cost of independent legal advice (ILA) for the personal guarantee as your own solicitor normally can't give you this advice as it is a conflict-of-interest as they are acting for the company and the ILA is in your personal name. I've seen quotes for this service as high as £900 per person however there are plenty of options now online where you can get it for circa £150. If you have an established relationship with a solicitor you may get it for a lower figure. Why do conveyancers acting for property investors need specialist knowledge? Each lender has their own requirements and it's only by dealing with a lender on a regular basis a solicitor will know how they react to the conveyancing queries. There are Companies House forms that need completing and I've seen many incorrectly completed by solicitors who are not use to Limited Company BTL. This creates major problems for a lender hence their restricted panels.

What sort of conveyancing issues are property investors more likely to face than residential buyers? The English housing market is full of if’s and but’s. We have freehold and leasehold properties. Leasehold properties tend to be flats (not always) and so tend to be lower value (not always) and so often they appear attractive to property investors because on the face of it they offer a better yield. This is not always the case because often they will come with service charges and ground rents, which are not recharged to the property investors’ tenant and so can hit the bottom line. Another issue is a common feature of leasehold properties is a restriction on use, for example “can only be used as a single private dwelling for the occupation of one family”. This prohibits use as a House of Multiple Occupancy (HMO) or for short term holiday letting and these are often the more profitable forms of use. Leasehold properties also can have other restrictions such as limiting the type of flooring for example to carpet, which means that easy to maintain low cost laminate flooring is out of the question. Residential buyers are increasingly relaxed about up to date gas safety certificate or electrical installation condition reports because they may take a long term view or have works planned once they own, property investors require these to let a property and so would more frequently ask the seller to supply. How can property investors avoid complex and costly issues that crop up during conveyancing? If buying a leasehold property, before making an offer ask the estate agent for a copy of the lease, service charge, ground rent and details of any restrictions on use. Ask your specialist solicitor to check these before proceeding. If taking funding use a competent independent mortgage advisor to check for the best deal but also liaise early with your specialist solicitor to ensure that they can act for the lender under dual representation. Increasingly commercial lenders have restricted legal panels and so whilst a deal may seem more competitive, by the time you factor in additional legal fees or delays it may have been better to take what initial may have seemed like a less competitive deal. Why do conveyancers acting for property investors need specialist knowledge? Property investors have different requirements to regular residential buyers. Whilst some low cost online firms may market it as such, conveyancing is not a one size fits all process. Buying a property is a complex and data driven process and it helps to have an experienced and qualified point of contact who is familiar of the requirements of their client, you the property investor. A skilled solicitor can quickly check initial paperwork and spot any potential issues at an early stage thus reducing cost and delays in a transaction. Using a quality solicitor represents better value for money than a budget lawyer because you have a dedicated qualified point of contact who knows you personally and not a case handler to whom your case is just one of a hundred.