Preparing your new site for sale
Sales of new properties have never been easy, but the legal process of getting a sale across the line does seem to get harder and harder over time. This is an unfortunate side effect of increasingly complex regulation, ever more stringent requirements of mortgage lenders and frequently a lack of understanding and experience as Buyers instruct the cheapest conveyancing service that they can find.
We have put together the following checklist to help give you build the most comprehensive sales pack possible, in the hope that the sale of your new home or homes can be progressed as quickly as possible. It will help us if you provide the following information or documentation at the earliest opportunity.
Conveyance or lease plans
Most architects and other plan drawings professionals are already familiar with the Land Registry guidelines for preparing drawings. A copy of their guidance notes can be found here.
Our own tips for preparing a decent transfer plan for freehold properties are:
- Try to make sure that the plan fits on A4 or A3 sized paper. Whilst we work electronically as much as we can, we will need to produce a hard copy of the transfer and the plan and A3 is the largest size that our printers can handle.
- Provide the file in .pdf format.
- Try to provide us with a plan that is black and white (other than colouring that is actually necessary). Coloured site layouts with multi-coloured trees and subtle differences in landscaping can be confusing and detracts from the detail that is actually needed for the conveyancing process.
- Make sure that the plan is to a recognised scale and contains a north point.
- Have bicycle stores, refuse areas and other communal facilities properly marked.
- Ideally provide us with one fully marked up plan for each individual plot or unit.
If preparing a lease plan, we would add the following advice:
- The plan should show the location of the apartment in the context of the building, and the location of the building in the context of the street or surroundings. Sometimes this is achieved by preparing a “Plan 2” which is essentially an OS plan showing the building edged blue – sometimes this is achieved by simply insetting a location plan at a smaller scale on the same page as the floor layout.
- Particularly if selling off-plan, you might want to avoid drawing the precise dimensions of every room within the apartment in case these change during the build. On the flip side, it can be useful if you are retaining the freehold for the lease to contain a record of the “as built” configuration of the apartment.
New Homes Warranty
If you are looking at this page there is a fair chance that you will need a New Homes Warranty (or at the very least a Professional Consultant’s Certificate).
Common sense has always dictated that the purchaser of a new-build obtains a warranty from the NHBC or similar. Over recent years, however, the position relating to warranties has become more complex as a result of new entrants to the warranty market and also the requirements of lenders.
The majority of potential purchasers of new units will be obtaining a mortgage from a lender who subscribes to the UK Finance Mortgage Lender’s Handbook (which most people still simply refer to as “CML”). This handbook sets out the requirements that all lenders insist are met when they are lending to fund a property purchase in England and Wales. Importantly, the handbook sets out specific requirements for what they call “New Properties”.
The wording in the handbook is so important that we set it out below. We have added our own emphasis as 6.7.1
6.7 New Properties – Building Standards Indemnity Schemes
6.7.1 If the property has been built or converted within the past ten years, or is to be occupied for the first time, you must ensure that it was built or converted under a scheme acceptable to us (see part 2 for the list of schemes acceptable to us and our requirements).
6.7.2 Where the cover under a scheme referred to in clause 6.7.1 is not yet in place before you send us the certificate of title, you must obtain a copy of a new home warranty provider’s cover note from the developer. The cover note must confirm that the property has received a satisfactory final inspection and that the new home warranty will be in place on or before legal completion. This does not apply to self-build schemes. Check part 2 to see what new home warranty documentation should be sent to us after completion.
You will note that 6.7.1 captures conversions and not just pure new-builds. Importantly you should be aware that we have encountered instances where purchasers (guided by over-zealous surveyors) have insisted that a substantial refurbishment also constitutes a new property under the handbook. Whilst we think that view is wrong, it does not necessarily help us sell the property if the warranty is not in place.
Having identified whether or not a new homes warranty is required, you will then need to make a decision as to which provider to use. The National Housebuilding Council (NHBC) is no longer the sole provider of warranties, and there are a number of other challengers in the market.
Our advice, for what it is worth, is not to simply go for the cheapest provider. One quite well known provider has recently (July 2018) encountered a position where it’s main insurer became insolvent and it’s policies effectively worthless overnight. Consider also whether your provider is likely to be acceptable to lenders. You can check this out by visiting the Lenders Handbook website, and selecting “Part 2” for an individual lender. If you then scroll down to 6.7.1 you will see a list of the schemes that are acceptable.
An alternative to providing a New Homes Warranty may be to offer in its place a Professional Consultants Certificate (PCC). Some lenders (but by no means all) will accept a PCC from a recognised professional who has been involved in supervising the build. There are even some companies who will issue a PCC where they have not been involved in the build.
If you are intending to rely solely on a PCC we do advise that you do so with caution. We advise that you check 6.7.4 of the Lenders Handbook to ascertain which lenders will accept a PCC instead of a new homes warranty.
We would also mention that the availability of a PCC does not give to a purchaser the same degree of protection as a new homes warranty. Receiving a PCC would simply give a purchaser the ability to sue the professional if they have failed in their professional duty to supervise the build. You will appreciate that this is not the same as having a ten year warranty with a claims handling process and a customer care team, and may not be attractive to buyers (even if it does fulfil their mortgage lender’s criteria).
If we do not already have the planning permission (or appeal decision) please send it over. Please remember that if you make any further applications or minor-amendments you should let us know – we will have no way of knowing otherwise!
Where the planning permission contains conditions which need to be discharged (particularly pre-commencement) please provide us with a copy of the discharge of conditions. It is a good idea to send these through to us as the project progresses.
Community Infrastructure Levy (CIL)
If your development attracts a charge to CIL, please let us know. It is not always obvious from the planning permission or from the local search that a CIL charge exists. Do please send us the CIL Liability Notice and also the receipt of the payment of CIL (as and when you pay it).
Clearly you will not have the final building control completion certificate until the properties are finished and signed off. Remember to send us the Building Control Completion Certificate as soon as you can.
In the meantime, please do send us the Initial Notice or the Notice of Passing of Plans as soon as you can.
Although we know that you will not achieve your building control sign-off without them, it is a good idea to send through to us as soon as they are available:
- the GasSafe or other competent persons’ certificate demonstrating that any gas appliances have been installed in accordance with Building Regulations
- the NICEIC or other competent persons’ certificate demonstrating that electrical works have been carried out in accordance with Building Regulations. If there is a separate Landlords’ supply, please make sure that we receive the certificate for that too.
- any FENSA certificates for the windows (or confirmation that these have not been replaced or are covered by the general building control certificates)
- any additional certificates that were required for building control sign-off (e.g. fire alarm, smoke vents or similar)
Energy Performance Certificates
Please send us over the Energy Performance Certificates for the finished units as soon as you can. If only the Predictive Energy Assessment is available, by all means send that over to start with.
Guarantees and warranties
If there are guarantees in place for building components or systems, please do send these over. This might include:
- Flat roofs
- Plant, such as swimming pools or sewage treatment
Replies to enquiries
Depending on the number of units you are selling, we might ask for you to complete a Sellers Property Information Form and a Fittings and Contents Form. If there are significant differences between the different units that you are selling we might ask for one form per plot, but usually we will be able to use a single form and repeat it across all of the units you are selling.
Once you have completed and returned the forms to us, do please remember to let us know if any answers change.
Service charges or estate charges
If there are communal facilities and a service charge or estate charge is going to be necessary, do please provide us with a Service Charge Estimate as well as a Schedule of how these charges are to be divided between the units.
If you are selling an apartment, please do let us have a copy of your Buildings Insurance Policy and also the accompanying Insurance Schedule.
Certificate of Numbering/Naming
If your development involves the creation of new postal addresses for the units, you will need to apply to the Council for a certificate to confirm that the address is acceptable. The Council will issue the certificate only after consultation with the Post Office and the emergency services. Please send us the Certificate of Numbering/Naming as soon as it is available.