TR1 Form on Completion

[blue500]

Hi everyone.

I'm a first time buyer who worries a lot.

Completion is Friday.

I noticed when I signed the TR1 form that the seller had not signed it yet.

My research indicates the form gets sent to the sellers solicitor.

Therefore my question is:

On completion day, does my solicitor (me buying) have to be in possession of the TR1 form signed by the seller, before sending the money?

OR

Does the sellers solicitor hold the TR1 form until they are in receipt of the completion funds? If this is the case how can one be sure that the form is signed by the seller?

Thanks

[pochisoldi]

Short version

You are paying your conveyancer to deal with this, don't worry about it.
I don't think I've ever seen a copy of a TR1...

Long version:

Buying a property:

Exchange:
You are contractually obliged to go ahead with the transaction.
At this stage the purchaser has an "interest" in the property - so they insure it, even though they don't own it.

Completion:
The point at which the contract is executed.
The important bit:
Only two key things need to happen on completion day:
1) The purchaser's money has been received by the vendor's conveyancer
2) The vendor has moved out.
Then you (the purchaser) can move in.
At this point the purchaser owns the property, but the transfer of ownership is not registered.

At some point afterwards (usually within a week)...
The paperwork gets done.
The paperwork needed to register the transfer gets exchanged
The transfer is registered at the land registry (by the purchaser's conveyancer)
The purchaser's conveyancer eventually provides all the documentation to their client. (usually after you have cleared any outstanding invoices with them)

[Lootman]

two key things need to happen on completion day:
1) The purchaser's money has been received by the vendor's conveyancer
2) The vendor has moved out.
Then you (the purchaser) can move in.

I recall a case where a friend of mine completed a purchase but then allowed the seller to live there for a further period of time, presumably because the seller's purchase had a later completion date.

Effectively the new owner rented his new property to the seller for a short period of time after completion.

So technically isn't only (1) required for completion, and not vacant possession (subject to an agreement between the parties)?

I suppose in theory the opposite is also possible i.e., after exchange of contracts, the seller could move out before completion date, and the buyer moves in, paying rent for the intervening period.

[pochisoldi]

two key things need to happen on completion day:
1) The purchaser's money has been received by the vendor's conveyancer
2) The vendor has moved out.
Then you (the purchaser) can move in.

I recall a case where a friend of mine completed a purchase but then allowed the seller to live there for a further period of time, presumably because the seller's purchase had a later completion date.

Effectively the new owner rented his new property to the seller for a short period of time after completion.

So technically isn't only (1) required for completion, and not vacant possession (subject to an agreement between the parties)?

I suppose in theory the opposite is also possible i.e., after exchange of contracts, the seller could move out before completion date, and the buyer moves in, paying rent for the intervening period.

I wouldn't expect a first time buyer to do anything other than buy with vacant possession.
If there was any kind of overlap between ownership and residency, I would have expected the conveyancer to have negotiated and explained it with the buyer, and this thread wouldn't exist...

[JonE]

I suppose in theory the opposite is also possible i.e., after exchange of contracts, the seller could move out before completion date, and the buyer moves in, paying rent for the intervening period.

It seems to me that 'vacant possession' is not necessarily as visibly obvious as might be supposed. Sometimes it just marks the end of one form of tenure and, possibly, the start of some other form.

Your supposition is not merely theoretical. A 'keys licence' allows a purchaser access to a property on which exchange has taken place without 'rent' (indicating a tenancy) being involved. Pretty handy for BTL purposes - especially if seller and buyer are both BTL landlords and the tenant was out prior to exchange.

Cheers!

[Lootman]

I suppose in theory the opposite is also possible i.e., after exchange of contracts, the seller could move out before completion date, and the buyer moves in, paying rent for the intervening period.

It seems to me that 'vacant possession' is not necessarily as visibly obvious as might be supposed. Sometimes it just marks the end of one form of tenure and, possibly, the start of some other form.

Your supposition is not merely theoretical. A 'keys licence' allows a purchaser access to a property on which exchange has taken place without 'rent' (indicating a tenancy) being involved. Pretty handy for BTL purposes - especially if seller and buyer are both BTL landlords and the tenant was out prior to exchange.

Yes, I have actually twice bought a property that had renters in it, and had to wait until the end of their lease to get vacant possession. So clearly vacant possession cannot be necessary for completion.

[gryffron]

Did it work out ok?

Vacant possession is often (usually?) a condition of the contract. But clearly it doesn't have to be. The contract could agree any terms the parties sign up to. I too have bought a property where the previous owners continued to live there for a few weeks after completion. In my case because the imminent introduction of second property stamp duty meant I was eager to complete before they were ready to move out. As Lootman has noted, it is also perfectly possible to buy a property with a sitting tenant.

But unless your conveyancer has told you clearly that it is NOT the case, I would expect vacant possession to be part of your contract.

Gryff

[Clitheroekid]

Vacant possession is often (usually?) a condition of the contract. But clearly it doesn't have to be.

No, it doesn't have to be, and there are plenty of properties that are sold subject to existing tenancies. However, for the normal first time buyer like the OP the contract would always specify that vacant possession must be given on completion.

And even if the buyer was fairly relaxed about it their mortgage lender certainly wouldn't be. As the buyer's solicitor is usually acting for the mortgage lender as well they would have a separate and legally binding duty to the lender to ensure that VP was obtained.

Of course, the solicitor has no surefire means of ensuring VP, as they're hardly going to visit the property to ensure it's empty. In practice, he has to rely on the buyer to confirm VP, but this can also be impossible on occasions, as some buyers don't move in immediately after completion. On such occasions the solicitor resorts to the ancient legal remedy known as commutans digitos

Although I would hope that the OP has now successfully completed his purchase, the answers to his questions, which may assist others in the same situation, are:

On completion day, does my solicitor (me buying) have to be in possession of the TR1 form signed by the seller, before sending the money?

No. He would never under normal circumstances receive the signed TR1 prior to completion.

Does the sellers solicitor hold the TR1 form until they are in receipt of the completion funds? If this is the case how can one be sure that the form is signed by the seller?

Yes. The seller's solicitor will ensure that the seller has signed the transfer prior to completion, and he wouldn't (or shouldn't) let the seller have the sale proceeds without a signed transfer.

[pochisoldi]

Yes. The seller's solicitor will ensure that the seller has signed the transfer prior to completion, and he wouldn't (or shouldn't) let the seller have the sale proceeds without a signed transfer.

To the OP - you should note what Clitheroekid has said here, as it should help quell some of your worries.

The seller's solicitor has their own reputation on the line (for the £1000 they stand to make in legal fees), so they won't put themselves in a position where the seller can "run off with the money, without completing the deal", leaving them on the hook for thousands of pounds.