Scotland Property Buying Guide

In Scotland, the process of buying a property is different to the rest of the UK, there is no distinctive stage between an offer and an exchange of contract.

As soon as the seller has accepted an unqualified written offer on a property, it becomes legally binding. This offer becomes part of the contract.

Any written correspondence between buyer and seller can form the contract. These series of letters form the Missives.

Accordingly if you are interested in buying a particular property, you should employ a solicitor to correspond with the seller’s solicitor.

Properties are marketed for sale in two different ways. This may affect how quickly and how you make an offer. The different ways of selling a property are: -

"Fixed Price" basis - the seller will normally accept the first offer made at the stated price.

"Offers over £xxx" sale - prospective buyers can make an offer at or above the stated price. This is similar to a blind auction. For example an advert will state “offers over £350000”.

If the seller expects several offers, a closing date may be set. On this date offers will be opened and examined by the sellers and their Solicitor. Usually the highest offer without conditions will be accepted.

The seller’s acceptance of your offer may also be unconditional or may have conditions attached. Once you have satisfied these conditions, if any, you and the seller are in a binding contract to, respectively, buy and sell the house. This is called concluding Missives. The Missives will stipulate a date of entry and will include a Disposition, which legally transfers ownership of the property to you.

In both the above instances, an offer below those prices would not necessarily be refused.

Also note that a closing date has no legal significance and an offer can be accepted between a closing date being set and the closing date itself.

You may make a verbal offer and discuss with the seller what is included in the price and what covenants or restrictions there are on the property. You can also discuss what conditions he has placed on the sale and if your offer can be subject to survey.

If you don't want to miss out on a chance to make an offer, you or your solicitor should ask the selling agents to note your interest. If that is done the selling agent should tell you if another offer is received or if a closing date is to be fixed and so on.

Noting interest does not mean you are obliged to proceed further, or that you will be penalised if you do not, but it does mean you should be kept advised of developments.

However the selling agents are not bound to tell you and you should be aware that by waiting you take the risk that if an acceptable offer comes in, the property could be sold without going to a closing date.

By getting your solicitor to note your interest, it should avoid having multiple potential buyers all undertaking a valuation.

After finding your ideal property, you need to appoint a solicitor to make an offer on your behalf. There are no conveyancers in Scotland.

You should inform the solicitor of the sale details including fittings and fixtures. Also include details of the contents of a garden if this is a major factor in your buying decision. (One unlucky buyer bought a property because the large garden contained many bushes and flowers, only to discover that the plants had moved with the seller, as they were not stated in the Missives.)

You should advise him if you plan to alter or extend the property, change use so that they can ensure that are no covenants restricting your future plans. Similarly any access via roads or private services should be brought to the solicitor’s attention.

You may also to get a survey done in advance, as offers with the condition "subject to survey" are less attractive to the seller. To make this more attractive you can insert a time clause to get the survey done within a stated time period i.e. 48 hrs.

You also need a valuation if borrowing from the bank. If speed is important you may consider arranging the survey through the solicitor instead of the bank.

You may also consider getting the building structure surveyed at the same time as valuation. If the seller has made unapproved alterations to the property he needs to obtain a retrospective building warrant and completion certificate or alternatively supply a “Letter of Comfort”.

You should have funds to complete, or a mortgage offer arranged. The solicitor should be advised of this as well before making offer. This can affect whether your offer is successful or not, particularly for cash buyers.

Once you and your solicitor are happy with exactly what you will be buying and the applicable conditions you wish to specify, he will make a written offer on your behalf. At this point the contract becomes binding subject to any conditions.

You can decide whether to make an unconditional offer which specifies the price you are willing to pay or a conditional offer which specifies the price but also details your conditions.

The most common condition attached to an offer is ‘subject to survey’ - meaning that you are happy to proceed as long as a satisfactory survey of the house is made.

The offer includes the purchase price, date of entry, alterations and specialist works together with any inclusions such as carpets and curtains. If the seller accepts your offer, both solicitors can make the final arrangements. Once the written negotiations (known as missives) have been completed, your solicitor will arrange for further checks on the property, including a Local Authority search.

In most cases where a written offer accepted, the acceptance will contain some further conditions (this is referred to as a qualified acceptance). If these qualifications are acceptable to the buyer, a letter accepting them is issued and the bargain will be concluded at that stage and is then binding on both parties.

When both party have no further qualifications and the last set of qualifications has been accepted, the contract becomes binding - up to this point either party can withdraw without penalty.

Once the offer has been accepted on all points, you have entered into a legally binding arrangement and neither party can withdraw without potentially being held liable for the consequent losses of the other party. There is nothing for the purchaser to sign to commit to the contract as the Missives are generally signed by the parties' solicitors.

Finally, once the Missives have been finalised, a Disposition (a document confirming the change of ownership) is drawn up. You are also required to sign a standard security for the deed securing the mortgage on your property.

On the entry date, the buyer sends a cheque in exchange for the deeds to the property, the disposition and the keys.

The buyer must also pay stamp duty and register the Disposition (change of ownership) and the standard security with the Land Register or Register of Sasines (the public register of title deeds).

Recording ownership of property at a national level has only been introduced recently. Therefore many properties are not registered.

To ensure there are no problems at the registration stage a P16 report, or Property Definition report, should be obtained from the seller at an early stage in the transaction.

This report compares the seller's title with the OS map. Any discrepancies shown at that stage may involve the seller obtaining a corrective deed from a neighbour to remove any discrepancies between the ground being sold and the ground actually owned by the seller. This process only applies in relation to the first registration in The Land Register.

Information relating to property ownership and price can be found at http://www.ros.gov.uk/citizen/shp.html

The Registers of Scotland Executive Agency maintains Scotland's two national property registers - the Register of Sasines and the Land Register.

When the title of the property is transferred to the new owners in joint names this often contains a survivorship clause.

This means the title is held equally by the parties and on the death of either party the deceased's share of the property will pass automatically to the survivor.

The advantage of this is that on death no further steps need to be taken to transfer the title. The disadvantage is that the survivorship clause cannot be cancelled once it is in the title unless both parties complete a further deed to that effect.

If no survivorship clause is included each party has a separate share in the property. On death the deceased's share would pass either in accordance with the deceased's Will or under the laws of intestacy and a new deed or deeds would need to be drawn up to complete the transfer. In most cases involving a husband and wife a survivorship clause may be appropriate, but in other circumstances thought should be given as to how you wish the title to be drawn.

If you are single, or an unmarried couple borrowing from a financial institution, you need to obtain an affidavit to confirm that you have no spouse, as required under the terms of the Matrimonial Homes (Family Protection) (Scotland) Act.

If you buy into a tenement, a four-in-a-block, a terrace or a former council house you may share part of your property, like the roof, garden or stair, with other owners. If you are buying a former council property, for example, you may share a responsibility for repair or maintenance in common with the local authority. Common responsibilities are usually listed in your title deeds or the Burdens Section of your Land Certificate.

If your title deeds or Land Certificate does not list common responsibilities, or if you do not understand them, ask your solicitor to explain.

Whoever is taking care of repairs, remember your still have a responsibility as an owner to make sure you can pay your share of common repairs bills, through insurance or other means.

Please note that a repair is different from an improvement, and you cannot expect other owners to share in the cost of improving your property.

Factors are employed to manage a tenement or common property by owners who pay for the service. Factoring applies to common land or space and common parts of property like roofs, shared entrances, stairs, outside walls, and common services like cleaning and care-taking.

The factor's main duties are dealing with repairs and tradesmen, collecting everyone's share of common repair bills, generally known as common charges, paying common insurance and handling rents and repairs.

The information here is only a guideline. For more information on legal practice please consult the Law Society of Scotland website.

www.lawscot.org.uk/Members_Information/rules_and_guidance/guides/Rules