When you are buying a house there are some tasks which will correctly take priority over others. The two key things you will probably be concerned with are
1. Arranging loan finance (assuming you are not a cash buyer), and
2. Finding the right property
Nevertheless, certain delays may arise in the course of your conveyance and these will be deeply frustrating if you do not understand the cause and remedy, if there is one. For this reason it might be useful to take a look at certain legal terms which may go to the root of the delay.
Good title and good marketable title
One of the most important concepts to understand is that of “good title”. Good title is something that the bank will be concerned about and it is a certainty that your solicitor will have given a solicitor’s undertaking to the lender to obtain good title to the property.
Your solicitor will want to be released from that undertaking once he/she has completed the transaction and will be only released when he/she certifies title for the bank. This means that the lender will continue to rely on the solicitor’s professional competence and title to the property and will be assured that his loan is property secured on the property against which the loan was offered.
“Good title” does not have a statutory definition but is widely accepted as acceptable proof of ownership of the property in question.
“Good marketable title” goes a step further and is the standard of title that will be widely accepted by conveyancing solicitors in Ireland, following good conveyancing practice and rules set out by the Law Society of Ireland.
Without good marketable title the lender’s security is unsound and of little value as there is not much benefit in repossessing a property and then finding that it cannot be sold because title is not good and will not be accepted by potential purchasers.
Thus, one of the causes of any frustrating delay in your purchase may arise from some defect or infirmity with the title being offered.
Your solicitor is, naturally, concerned and will attempt to remedy the situation.
If the problem cannot be overcome the solicitor will contact the lender and enquire if the lender is willing to accept a qualification on title. This involves the solicitor telling the bank about the problem and getting written approval to proceed with the problem unresolved.
This could arise in any number of different circumstances ranging from a trivial issue to the deal breaking variety. For example, problems with the planning permission not being in order or some problem with access or services to the property would be highly significant and your solicitor will be sufficiently concerned and prudent to contact the bank and see if a qualification on title will be accepted.
If it is not, the solicitor cannot proceed as he/she cannot certify title to the lender’s satisfaction. This is a deal breaker and the sale will almost certainly fall through.
An easement is a legal entitlement such as a right of way or a right to light. The easement attaches to the land and is exercisable over the land of another landowner.
There must be a dominant tenement and a servient tenement. The dominant tenement will be the land which benefits from the easement whilst the servient tenement is the land over which the right of way, or other easement, is exercised.
Easements should be registered with the Property Registration Authority and will appear on the folios affected.
Subject to Contract/Without Prejudice
This phrase is used in all correspondence prior to the coming into existence of a binding contract. Your solicitor will correspond with the vendor’s solicitor prior to the formation of a contract and all correspondence will have this phrase in bold letters at the top of each letter.
You may also receive the booking deposit receipt and sales advice note from the estate agent with this phrase prominently displayed.
It signifies that there is no binding contract in place until both vendor and purchaser sign and all correspondence prior to that cannot be relied on or produced as evidence of a contract if there is a dispute between the parties as to whether there is a contract or not.
You will not need to understand every single aspect of a contract or the stages in a property transaction. But you may be frustrated with an unexpected delay and the cause may be a difficulty with an easement or title so it might be useful and less frustrating to have a basic understanding of what is causing the problem.