Most prospective Purchasers use mortgage funds to buy their property. It is prudent to contact your Lending Institution as a first step to ascertain what funds are available to you for the purchase. Also at this stage it is prudent to be aware of any conditions attaching to a prospective mortgage such as life assurance etc.
If you are intending to purchase at Auction it is always best to have your Solicitor examine the title prior to the Auction. It is also prudent to have the property inspected by a Surveyor or an engineer. Other Purchasers who wish to bid on a property do so by putting in an offer to the Auctioneer which if accepted the Purchaser will be required to pay a booking deposit, usually in the sum of €3,000 to €5,000.
This booking deposit refundable to the Purchaser if the purchase does not proceed past the signing of Contracts. The balance of the 10% deposit is payable on the signing of Contracts by the Purchaser.
When you instruct your Solicitor to purchase property on your behalf they will advise you regarding the title when they receive the Contracts and copy title documentation. In Ireland there are two types of property; registered and unregistered title.
A registered title will have a Folio which is a document which shows conclusive evidence as to the ownership of the property and which records the name and address of the owner, gives a geographical description of the property and lists any burdens which affect the property to include mortgages, charges, Rights of Residence etc.
For unregistered property there is no Folio and the title is registered in the Registry of Deeds. The title contains a number of documents to include a Deed of Conveyance (freehold) or Deed of Assignment (Leasehold) showing previous transfers of the property. Now as we have compulsory registration of unregistered title the Purchaser of an unregistered title is now obliged to complete what is known as a First Registration process which means that the unregistered title must be registered in the Property Registration Authority which ultimately will mean that the Title will have a Folio document and Folio number.
The Freehold title mentioned above is known as the highest interest held in a property and a Leasehold interest/ownership is for a term of years. Most apartments are leasehold interests, some for a term of 500 or 999 year Leases.
While the Solicitor is investigating the title to ensure that all matters such as planning, access etc. are in order they will also meet with you to go through the mortgage documentation. If your Solicitor notes any matter which would adversely affect the title they will inform you but they will also seek what is known as a Qualification from your Lending Institution i.e. that your Lending Institution accepts the matter which is being made known to them.
At the Contract stage your Solicitor will deal with the following matters:-
- The contract sale price will be set out and the balance deposit will be due at this stage. It will also state when the transaction shall close following signing. Prior to the closing date your Solicitor will draw down funds from your Lending Institution and the balance of purchase monies will be paid to the Vendor’s Solicitor on the closing date.
- The Documents Schedule in the Contract lists out the documents which the Purchasers Solicitor will receive. All such documents will be inspected prior to the signing of Contracts and your Solicitor may seek additional documentation.
- The Contract contains General and Special conditions. Special Conditions give the Vendor an opportunity to state the terms under which they are selling the property and to make certain matters known to the Purchaser.
- Your Solicitor may at this stage conduct a Planning Search with the Local Authority which will allow the Purchaser and their Lending Institution learn certain information affecting the property such as zoning, any proposals for road widening, CPO information etc. and indeed the full planning history affecting the property.
On the day of closing the Purchaser Solicitor will request a number of further searches which may include a Land Registry search seeking the most up to date information on title to show ownership, mortgages, Rights of Residence etc. Similarly, a Registry of Deeds search will show this for unregistered title and the Purchaser Solicitor will conduct a number of further searches just as Judgement, Bankruptcy, Sheriff and Revenue Searches against the Vendor to ensure that there are no charges affecting the property.
Following closing the Purchaser Solicitor will register the title with the Property Registration Authority and following this the title, to include folio and all of the documents which were received with the Contracts to your Lending Institution.
The title documents will remain with the Lending Institution until such time as you wish to sell your property in the future or the mortgage affecting the property is redeemed i.e. paid in full.
For further information on purchases and sales please contact our Conveyancing Department.