As this can be a complicated process, it’s virtually essential to use a solicitor. Basically, the procedure is as follows:
Once the selling price has been agreed between the vendor and the buyer, the vendor’s solicitor prepares a contract and sends it to the buyer’s solicitor, who checks the title and asks the buyer to sign the contract and pay a deposit to secure the property. If the buyer is obtaining a loan (mortgage), the contract will be subject to the loan being granted, which in turn will be subject to a satisfactory valuation report.
Some selling agents insist that the valuation is carried out before negotiations are concluded, and provisional loan approval can now be secured quickly (within 72 hours), which means that the vendor’s solicitor will generally refuse a contract that’s subject to loan approval.
The buyer’s solicitor will then draft the purchase deed and raise his queries ( requisitions) on title before sending the deposit, draft deed and any objections with regard to title back to the vendor’s solicitor. Note that at this stage the buyer has committed himself to buying (subject to satisfactory title) whereas the vendor isn’t yet committed to selling. The requisitions (commonly referred to as ‘searches’) carried out usually include:
- a planning search, with the local planning office, to reveal whether there are plans to construct anything which would adversely affect the value, enjoyment or use of the property such as roads, railway lines, airports, shops or factories, and whether applications for planning permission in respect of the property have been lodged or refused;
- a compulsory purchase order search with the local authority to find out whether the land is subject to compulsory purchase by the state or local authority, e.g. for road building or widening;
- a licensing search (in the case of a hotel or pub).
The solicitor will also check:
- that the property belongs to the vendor or that he has legal authority to sell it. If the property is registered with the land registry, this is a simple matter. If it’s with the registry of deeds, 30 years’ title is usually regarded as ‘sufficient’ (note that the vendor’s solicitor is obliged by law to disclose any relevant legal matters, although not physical matters, relating to the title of a property);
- that the property was built in accordance with the appropriate regulations, e.g. planning regulations, bye-laws, building standards;
- that there are no encumbrances (e.g. mortgages or loans) against the property or any outstanding debts such as gas, electricity or telephone bills and management fees (in the case of a leasehold property). Note that you must ensure that any debts against a property are cleared before you sign the deed of sale, as unpaid debts on a property in Ireland are inherited by the buyer;
- whether there are any remaining guarantees from which you can benefit, such as the Homebond 10-year warranty for new homes;
- that all the agreed fixtures and fittings included in the price you’ve negotiated are actually included in the legal documentation.
When he has received satisfactory replies to these queries, the buyer’s solicitor will draft a deed transferring title in the property to the buyer and give the lending institution a certificate of title. If the vendor is happy with the contract, he will also sign it. The draft deed is then approved by the vendor’s solicitor and returned for ‘typing up’ ( engrossment) by the buyer’s solicitor before being returned again to the vendor’s solicitor for signing by the vendor (no wonder solicitors’ fees are so high!).
The buyer’s solicitor will also need to check whether capital gains tax (CGT) has been paid by the vendor (if applicable). If the purchase price is over a certain amount, he will need to obtain a CGT clearance certificate; otherwise the buyer is obliged to submit 15 per cent of the purchase price to the Revenue Commissioners against the possibility of CGT being unpaid (the vendor will then have to obtain a refund of the same amount once the clearance certificate has been produced).
Warning: You shouldn’t even think about buying (or selling) property in Ireland without taking expert, independent legal advice. You should certainly never sign anything or pay any money before doing so. Before hiring a solicitor, compare the fees charged by a number of practices and obtain quotations in writing. Always check what’s included in the fee and whether it’s ‘full and binding’ or just an estimate (a low basic rate may be supplemented by more expensive ‘extras’). Note that you shouldn’t use the vendor’s solicitor, even if this would save you money, as he is primarily concerned with protecting the interests of the vendor and not the buyer.