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Disbursements 2

Environmental search

An environmental search is carried out with an agency that provides such searches. The law does not currently require local authorities to keep a register of contaminated land. An environmental search will check whether the land upon which the property is built has been contaminated. New properties are often built upon old landfill sites or upon sites that were previously used for commercial purposes. It is now a legal requirement that developers survey land intended for building to ensure it has not been contaminated.

If it has been contaminated the developer must decontaminate the land before building upon it. However, this was not always the case and some property is built on land that is contaminated. An environmental search will also check whether the property is affected by flooding or other environmental risks or hazard (such as factories or commercial outlets nearby). You can currently obtain a free mini environmental search (which cannot be used for legal purposes) from www.homecheck.co.uk.

Mining searches

There are various types of mining carried out in the UK today. These include coal, chalk and tin. Your solicitor will check if the property you wish to buy is in a mining area and if so will carry out a search to ensure that the property has not been/will not be adversely affected by the mining activities.

Chancel repair search/check

In the past when the Church sold off or gifted land they sometimes required the new owner to pay towards the upkeep of the church or its lands. Some property is still subject to this liability. There was a recent case where one unsuspecting couple were forced to pay hundreds of thousands of pounds to the church because their property was subject to this liability. If you solicitor believes that the property you wish to buy may be subject to this liability they will carry out a chancel repair search/check.

Commons registration search

Some land was formerly ‘common’ land. This means that the public have rights to pass over it and occasionally to graze sheep and cattle, gather wood etc. If your solicitor suspects that the property you wish to buy may have been registered as ‘common land’ they will carry out a commons registration search. This search is typical upon properties that front a village green or common land.

Land Registry search

When you buy, transfer or mortgage a property your solicitor will search the Land Registry to check that no one has registered a claim or a right in the property since the Official copies were issued by the Land Registry. This ensures that you do not buy a property that has a financial charge or other right registered against it.

Land Charges search (also known as a bankruptcy search)

When you buy or mortgage a property your solicitor will carry out a search against your name in the Land Charges register. This search will reveal if you are currently bankrupt, are an un-discharged bankrupt or are about to be made bankrupt.

  • Telegraphic transfer fees - If you are buying a property your solicitor will have to send the purchase money to your seller’s solicitor by telegraphic transfer. If you are selling or re-mortgaging your solicitor may have to repay your existing mortgages or loans by telegraphic transfer. The bank makes a charge for this and the solicitor passes that charge onto you.
  • Local search indemnity insurance – If you are buying or re-mortgaging a property and do not want to have a full local search carried out, if your lender agrees, your solicitor can obtain local search indemnity insurance to protect your lender/you against any problems that might have been revealed in a local search.
  • Other indemnity insurance - Indemnity insurance is widely used by solicitors to deal with problems in deeds, leases, insolvency, restrictive covenants, missing landlords etc. This insurance is arranged by the solicitor and the premium is paid by you.
  • Leasehold disbursements - Your solicitor should not include any fee for dealing with a lease in the disbursements section as this should be included in their conveyancing fee. You will however find that you must pay your new Landlord a Landlord’s notice fee for registering you as the new owner and your lender as interested as a mortgage lender. If there is a separate management company you may have to pay a Management Company fee for registering you as the owner and your lender as the mortgage company. Occasionally, Landlords and/or Management companies may require new tenants to sign a document agreeing to obey the terms in the lease. This document is called a Deed of Covenant. The Landlord/Management company may make a charge for supplying and registering this deed. You may also find that you are asked to pay Ground Rent, Buildings Insurance and Service Charge in advance.
  • New properties and some ‘Right to Buy’ properties - When you buy a property from a developer, the local authority or a housing association they insist upon providing a standard form of Transfer deed. They usually make a charge for this known as an Engrossment fee which must be paid by you.
  • Value Added Tax (VAT) - Where VAT applies to the solicitor’s charges and the disbursements this will be shown.

Additional Leasehold Property Disbursements

The following disbursements may also apply:

A Notice Fee to the Landlord for stamping the Notice provided by your solicitor to the Landlord notifying that you are the new owner and details of your mortgage company. An average would be £75 plus VAT but this does vary enormously from nothing up to £200. It depends on the Landlord. Your solicitor will find this out and notify you at the earliest opportunity.

If there is a separate management company they may also require a notice and may also charge a fee. Again your solicitor will find out what this is and notify you as soon as possible.

Ground Rent/Service Charge. Sometimes the Vendor has paid in advance to the end of the year and you might need to repay part of this.

If it is a new lease there will be a small amount of extra stamp duty and fees. This is worked out on the ground rent and the term of the lease and again the solicitor will notify you at the earliest moment.

Items that may be listed as disbursements which are not genuine disbursements (hidden extra solicitors fees to watch out for)

  • Legal fees for acting for a mortgage lender - Unless your lender has appointed their own solicitor (i.e. a different solicitor to the one you are using) the fee charged for acting for a mortgage lender will be paid to your solicitor and should therefore be shown as part of their total conveyancing fee. This fee may be charged separately by your solicitor on a purchase or a remortgage and even for dealing with repayment of a mortgage on your sale. (CMS do not charge this fee)
  • Solicitor’s indemnity insurance - By law all solicitors must carry indemnity insurance of at least £1 million pounds to protect their clients against that solicitor’s negligence or fraud. Some firms try to pass the cost of this insurance on to their clients. (CMS do not charge this fee)
  • Petty disbursements - This is a notional charge for telephone calls, photocopying, faxes and postage. In fact it forms part of the solicitor’s fee for the conveyancing and should be included in the total conveyancing fee quoted by the solicitor. (CMS do not charge this fee)
  • File storage - Solicitors are obliged to store your file for six years and some store for at least twelve (as recommended by the Law Society). Some solicitors seek to charge you for the storage of your file. (CMS do not charge this fee)
  • Expedition fees - Some firms of solicitors charge extra if you ask them to complete a transaction as a matter of urgency. (CMS do not charge this fee)
  • Search packages - Some firms charge inflated prices for a search package. We have seen the price of search packages quoted at up to £100 more than the actual cost of the package. The solicitor collects the fee for the package, pays for the searches and keeps the difference as conveyancing fees. (CMS solicitors charge only the actual cost price of searches)
  • Engrossment Fee -An Engrossment Fee may be charged when a buyer is purchasing a property that has just been built or converted. This is because the documents and planning information on new developments are generally more detailed. As a result, the solicitor will issue a charge for providing these documents, which the buyer must sign. The typical cost of an Engrossment Fee is variable, but it will usually be in the region of £50 to £100, exclusive of VAT.
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