Completion is the process through which a transaction completes. We will consider what needs to be done at this stage and the duty of solicitor at each step.

Firstly, the solicitor needs to make sure that following exchange that their clients are aware that exchange has taken place and that they comply with any relevant undertakings given in the course of the telephone exchange. This could involve sending the exchange of contract with the relevant completion date included. It is common to leave two weeks between exchange and completion. The main job of a solicitor in the pre-completion stages are to prepare the transfer deed, to undertake pre-completion searches, to make practical arrangements for completion and to ensure finances are in order for completion.

In order to transfer land you have lawfully execute a deed. Section 52 of the Law of Property Act 1925 states that the transfer of a legal estate in land must be by deed. The requirements for a valid deed means that it must make clear that it is a deed, be signed by the parties and he delivered as a deed.

It is no longer compulsory to have the deed sealed. If the deed is executed by an individual the signature must simply be witnessed by an independent witness. This is thought to counter any potential allegation of undue influence.

Conventionally the transfer deed is completed by the buyer’s solicitor and sent to the seller’s solicitor for agreement immediately after the exchange of contracts. However in a straight forward residential transaction the transfer deed could be prepared by the seller’s solicitor and sent to the buyer’s solicitor in the pre-exchange package.

Pre-completion searches are normally carried out by the buyer’s solicitor and should be made as close to the completion date as possible. Searches are carried out for four reasons:

  1. To make sure that the seller has not further incumbered the title since the investigation took place
  2. To check financial circumstances of the borrower in acting for the lender
  3. To gain priority for the buyer and lender over anyone else making an application before the buyer applies to register the change of ownership at the Land Registry and
  4. If the seller is a company, to check that the company has not gone into liquidation before the balance of the purchase price is paid over on completion.

If the title is registered then a Land Registry search is made against the title number to see if any new entries have been made since the search from date that is the date on which the official copies were produced. This is done using a Form OS1. This is linked to here.

With respect to unregistered land, a Land Charges search is made on Form K15. The result of the K15 form will be on a K18 form and confers a priority period of fifteen working days from the date of the result during which time the search will take free of any entries made on the register between the date of the search and the date of completion.

A lender who is financing the purchase of the property will normally require some security, a mortgage or a legal charge over the property. Financial circumstances of the buyer are important to the lender as they will want to avoid lending money to a person who may be either bankrupt or in liquidation.

There are a number of ways of checking financial standing with respect to an individual but the method used when the property is taken out as security for loan is to apply on behalf of the lender for a Land Charge search against the buyer. If the title is registered the solicitor will apply for a Land Charges search against the name of the buyer. If the property is unregistered the solicitor will already be making a Land Charges search against the seller so the name of the buyer will be added to the name searched against on the Form K15.

In addition to carrying out the appropriate searches against the title the solicitor acting for a buyer purchasing from a company should carry out further company searches prior to completion. A company search will reveal whether the seller is still in existence, whether it is solvent and whether it was created any fixed or floating charges.

Next come the practical arrangements for completion. The buyer and seller need to agree the practicalities for completion and this is done using a completion information form which the buyer’s solicitors send to the seller’s solicitor for them to complete. The one most commonly used for residential properties is a Form TA13 Completion Information and Undertakings. This asks the seller to confirm important information relevant to completion including arrangements for handing over the keys, the place and method of completion, the documents to be handed over at completion and the exact amount payable by the buyer on completion.

If the buyer is financing the purchase with the aid of a mortgage before releasing the mortgage advance the lender will expect to receive a certificate of title to confirm that the property is adequate security for the loan being advanced, a solvency search against the borrowers, a clear OS1R Form in the name of the lender and an executed but not completed mortgage deed. The solicitor for the buyer will need to send a financial statement to the client advising the client of the funds needed to complete.

At completion the buyer’s solicitors will send the balance of the purchase price and release the deposit paid on exchange to the seller. The buyer’s solicitor will usually arrange for the completion money to be sent electronically.

On receipt of the completion money the seller’s solicitor will complete the transaction by dating the TR1. Once this has been dated the lender’s solicitor will need to date the mortgage deed. This cannot be done until after TR1 has been dated as technically the buyer does not own the property until then and so would not be in a position to grant a mortgage over it.