12 May How new build conveyancing differs from standard transactions
If you are considering buying a new build home, congratulations! Buying a new house is an exciting time for anyone, but the anticipation and excitement that go with buying a new build is second to none. Most things about purchasing a brand new home are different to buying a used home, including new build conveyancing. This guide looks at the differences between conveyancing on a new build home and that on a used home.
Sometimes you can be expected to exchange contracts on a house that has not even been built. This is wildly different to buying a used home, where you exchange contracts once all checks have been made on the property and you buy as seen at that point. With a new build that doesn’t yet exist except on paper, there is no building fabric to check over prior to exchange. With such large sums of money at stake, this exchange can be a nerve wracking time. A conveyancing solicitor experienced in new build transactions can help you understand the process and make sure the contract does not leave you vulnerable. They also know which searches to carry out and what kind of enquiries to make, which differ materially from standard transactions.
There can be big waiting lists on popular developments, and as a buyer who has managed to reserve a new build home on these estates, you may have to move very quickly. Four weeks between reservation and exchange is not uncommon, so you need a conveyancing solicitor that understands the speed under which new build transactions take place and how to coordinate everything ready for exchange. A slow solicitor can really hamper the process and introduce risk unnecessarily. They could even forfeit your reservation deposit if the developer’s deadline is missed. When buying older property, the timescales are usually determined by the speed of the solicitors, mortgage companies and chain members, with no particular party having priority.
As if things weren’t complex enough, once you start introducing part exchange into the transaction, things get more difficult. It is essential that you employ an experienced conveyancing solicitor if you are part exchanging your old home for a new build. Part exchange is very uncommon in standard sale and purchase transactions and many solicitors deal very rarely with the unique challenges that it presents.
No fixed completion
When you buy a used home, you can expect to get a fixed date for completion at exchange of contracts. This date is binding on all parties involved and financial penalties can accrue if the deadline is not met. In new build transactions, completion is not set at exchange and in fact, could be at any point in the future, from a few months to years. Once the developer finishes building the house, they issue a Notice to Complete. This usually gives the buyer only ten days to complete and is contractually binding. In this time the mortgage offer has to be drawn down, snagging checks have to be made and an agreement drawn up to repair defects. It is a race against time, with big financial penalties for missing completion.
Evidently, the purchase of a new build property comes with completely different conveyancing challenges to the purchase of a used home. It is vital that you choose a conveyancing solicitor that is experienced in new build homes so that the whole process moves forward in a smooth and risk free manner, leaving you free to enjoy living in your beautiful new home.