Post-completion steps

Post-Completion Steps in Property Transactions

After the completion of a property transaction, several critical post-completion steps must be undertaken to finalize the transfer of ownership and ensure all legal, financial, and administrative requirements are met. These steps are crucial for securing the buyer's legal title, settling accounts, and complying with statutory obligations. Properly managing post-completion tasks helps avoid future disputes and legal issues, ensuring a smooth transition of property ownership.

Registration with the Land Registry

Registering the property with the Land Registry is a key post-completion step:

• ★ Updating the Title Register: The buyer's solicitor submits the transfer deed (TR1), mortgage deed (if applicable), and any other necessary documents to the Land Registry. This updates the title register to reflect the new owner and any lender's interest in the property.
• ★ Ensuring Good Title: Registration ensures that the buyer's ownership is legally recognized and protects against any future claims. It also confirms the discharge of any previous mortgages or charges on the property.
• ★ Priority Period: The priority period obtained from the Land Registry's OS1 or OS2 search helps protect the buyer's interest by ensuring no other interests can affect the title during the registration process.

Payment of Stamp Duty Land Tax (SDLT)

The buyer is responsible for paying SDLT on the purchase:

• ★ Calculating SDLT: The amount of SDLT payable depends on the property's purchase price, the type of property, and whether the buyer qualifies for any reliefs or exemptions. The buyer's solicitor typically calculates this amount.
• ★ Submitting SDLT Return: An SDLT return must be submitted to HM Revenue & Customs (HMRC) within 14 days of completion, along with the payment of the calculated tax. Failure to pay SDLT on time can result in penalties and interest charges.
• ★ Obtaining SDLT Certificate: The SDLT certificate issued by HMRC is required to complete the registration with the Land Registry. The buyer's solicitor ensures this certificate is obtained and submitted as part of the registration application.

Discharge of Seller’s Mortgage

Any existing mortgage on the property must be discharged:

• ★ Repayment of Mortgage: The seller's solicitor uses the sale proceeds to repay the seller's existing mortgage. The lender then provides a discharge document or releases the charge over the property.
• ★ Removal from Title Register: The buyer's solicitor ensures that the Land Registry removes the lender's charge from the title register, confirming that the property is free of the seller's mortgage.

Final Settlement of Accounts

All outstanding financial matters must be settled:

• ★ Apportionment of Costs: The completion statement details the apportionment of costs, such as property taxes, service charges, and utilities, as of the completion date. Both parties settle these amounts according to the statement.
• ★ Payment of Professional Fees: The buyer and seller must pay any outstanding fees to their respective solicitors, estate agents, and other professionals involved in the transaction. These payments are typically made from the completion funds.

Notification and Documentation

Post-completion documentation and notifications are essential for administrative purposes:

• ★ Notifying Interested Parties: The buyer should notify relevant parties, such as utility providers, insurers, and the local authority, about the change in ownership. This ensures that bills and correspondence are directed to the correct parties.
• ★ Document Retention: The buyer's solicitor will retain key documents, such as the transfer deed, SDLT certificate, and mortgage deed, in a safe place. These documents are essential for future reference and proof of ownership.
• ★ Title Deeds: If the property is not subject to a mortgage, the buyer may receive the original title deeds. If there is a mortgage, the lender usually holds the deeds as security until the loan is repaid.

Examples

Conclusion

Post-completion steps are critical for finalizing a property transaction and ensuring the new owner's legal and financial obligations are properly addressed. These steps include registering the property with the Land Registry, paying any applicable taxes, discharging any existing mortgages, and settling all outstanding accounts. Properly completing these tasks ensures that the buyer secures a clear and undisputed title to the property and that all legal and financial responsibilities are fulfilled. Attention to detail in these final stages helps prevent future complications and solidifies the transaction's success.