What do they mean?
There are a number of disbursements involved when purchasing or selling a property. These disbursements may be mentioned to you briefly, but do you understand what they really mean?
Our guide explains in detail what searches and disbursements are required.
All mortgage lenders require you to obtain searches against the property.
The searches they usually request include:
- Local Authority Search - this will reveal whether the roads and footpaths surrounding the property are publicly maintained, whether there have been any planning permission and/or building regulations applications against the property and whether any Tree Preservation Orders affect the property.
- Drainage Search - this will reveal if the property is connected to the mains drainage, whether there are any sewers within the boundaries of the property, and whether the property is served by a water meter.
- Environmental Search - this will reveal whether the property is built upon contaminated land and whether it is at risk of flooding or subsidence.
- Coal Search - this will reveal whether the property is in an area which has previously been mined, is currently being mined, or is likely to be mined in the future.
- Energy and infrastructure search - This reveals whether the problem is situated near HS2 wind farms or a fracking site.
Land Charges Search
If you purchase your property with a mortgage, the lender requires the solicitor to perform a bankruptcy search against each person named on the mortgage. The search will identify whether anybody with the same name as the borrower has been subject to bankruptcy proceedings.
Land Registry Priority Search
Prior to completion, your solicitor will carry out a priority search against the title to the property. This search will confirm whether any additional charges/entries have been listed against the property since the title was investigated and also give a six week priority period to register the property in the buyer’s name.
Telegraphic Transfer Fee
On the day of completion, funds are to be transferred by telegraphic transfer either to the selling solicitor in a purchase or to the mortgage lender in a sale transaction.
Telegraphic transfers does have a fee but it does guarantee that your funds will hit the bank in the same day if sent by a certain time.
Land Registration Fee
Once the property purchase has been completed, the solicitor will need to register the property in the name of the buyers and also register any financial charges. This is done at the Land Registry and the fee depends on the purchase price and also whether the property is a new build.
Stamp Duty Land Tax
Stamp duty is a tax which is payable on any purchase over £125,000 (or £40,000 if it is a second property). The Land Registry requires evidence that the stamp duty return has been submitted before they can register the property in the name of the buyer.
Office Copy Entry Fee (Sale/Re-mortgage)
When selling a property, the solicitor is required to produce evidence that the property is owned by the seller. This is done by obtaining the title deeds from the Land Registry. The buyers’ solicitor will need to investigate the title and it may therefore be necessary to obtain a number of documents from the Land Registry.
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