Today we are going to briefly outline the laws you need to know about before starting the daunting task of buying or selling a property.
The most fundamental question to consider is whether the property you wish to buy is freehold or leasehold. Buying the freehold means that the buyer will own the house and the ground it stands on. A leasehold will mean that a landlord owns the property and he or she will lease it to you for a set period of time (this can be anything up to 999 years.)
If you decide to buy a property you should make your initial offer ’subject to contract’ which means that you can still pull out in the event of problems coming to light – for example as a result of a survey. However, once a contract has been entered into it is legally binding.
Note that “Home Information Packs” will be implemented on a phased basis from 1 August. From then Packs will be required for the sale of four bedroom properties and larger, with smaller properties being phased in soon.
Until the end of this year, properties can be marketed as soon as a pack is commissioned, and as a temporary measure Energy Performance Certificates can be up to 12 months old when a property is put up for sale.The seller does not have a legal obligation to point out any problems with the property, although he must answer any questions asked truthfully. If a problem arises the seller may be liable under the Property Misdescriptions Act 1991 and may have to compensate the buyer.
Buying a property usually involves solicitors, estate agents, surveyors and a mortgage provider. As part of the conveyancing, solicitors will have the task of:
1) carrying out the necessary local searches to find show stopping problems if they exist. They will ensure that the property isn’t due to be demolished, or subject to a compulsory purchase order, which might happen when the area the property is in is due for re-development, and most importantly of all, that the seller actually owns the property.
2) They organise the transfers of money, deeds, and the particulars of the sale, such as the fixtures and fittings included in the purchase and determine the boundaries, rights of way and that a legally binding lease exists.
3) Estate agents represent the seller. Should a problem arise with an agent you can complain to their trade association or the estate agent’s ombudsman. Your local Trading Standards office can help you here and anything up to £50,000 can be awarded in compensation for problems.
4) The surveyor inspects the property to ensure that it’s worth the asking price. Your mortgage provider will insist on a minimal survey but it’s worth having a more detailed survey done to be on the safe side.
The Landlord & Tenant Act 1985 and Housing Act 1988 govern the renting or letting of property.
Landlords must:
1) Allow tenants to benefit from the ‘quiet enjoyment of the property,’ tenants should be able to live without being harassed, or inconvenienced by the landlord.
2) Provide property that is fit for human habitation. If a property is in an unhealthy state it is illegal to provide such property under the Landlord & Tenant Act 1985.
3) Maintain common areas, building structures and the outside of the property.
4) Ensure that repairs are carried out properly.
5) Design and build property to certain standards. If they don’t, they can be prosecuted under the Defective Premises Act 1972.
If you are a tenant you have to:
1) Pay rent.
2) Pay Council Tax, Water Rates and any other bills connected with the property.
3) Take proper care of the property
4) Allow the landlord to enter and view the property, providing you’ve been given sufficient notice. (At least 24 hours).
Leases and renting
Both landlords and tenants have legal obligations that depend on the type of lease.
There are three types of lease for private tenancies:
1) Assured Shorthold Tenancy – tenancies started after 28th February 1997 unless the landlord has stated otherwise. Landlords are certain of retaining possession of the property at the end of the lease. (Providing they have served the tenant with a valid Section 21(1) b notice 2 months prior to the termination of the lease)
2) Assured Tenancy – tenancy is assured for a fixed period and can only be terminated by court order or surrender by the tenant.
3) Regulated (or ‘protected’) Tenancy – tenancies started before 15th January 1989. These offer the most protection against rent increases or eviction.
Under the Housing Act 1985, council or housing association tenants benefit from ‘Secure Tenancy’. They have greater protection from rent increases or eviction than private tenants and can transfer the tenancy to a spouse or dependants should they die.
