Change of Ownership FAQ’s
What is Change of Ownership?
Change of Ownership is the process of selling or purchasing a property.
There is a restriction in the Title of the property as prescribed by the Land Registry because Bournville Village Trust are the Long Term Stewardship Provider for the area in which you property is located.
3 (23.09.2016) RESTRICTION: No disposition of the registered estate
(other than a charge) by the proprietor of the registered estate is to
be registered without a certificate signed by Bournville Village Trust
of 350 Bournville Lane, Bournville, Birmingham B30 1QY or their
conveyancer that the provisions of clauses 7.2 and 2.15(c) of the
transfer dated (insert date) referred to in the Charges Register have
been complied with.
The equity of your property cannot be transferred either by sale or by amendments without a Certificate of Compliance from Bournville Village Trust.
What is the cost and what does it include?
The £294 is a flat rate fee that covers all the costs and fees involved in the legal process of transferring ownership of your property to someone else. This includes:
- All correspondence
- Answering all queries / questionnaires
- Providing information relating to any outstanding amounts owed
- Providing information relating to any breach of covenant
- Providing information relating to any consents issued
- Checking the required Deed of Covenant
- Issuing the required Certificate of Compliance
- Notice Fee
BVT do not stipulate which party covers any part or all of the fee.
It is down to negotiation between the buyer and seller (or their solicitors) to determine how the fee is covered.
When a property is transferred, there is a legal requirement to ensure that the buyer enters into a Deed of Covenant signing them up to the same covenants that you did when you purchased the property. It is important that this happens because, thanks to some quirks in land law, if the Deed was not signed, the new owner would not be bound by all the covenants.
As being bound by all the covenants is critical to Long Term Stewardship and important out of fairness to all residents on the Village, there is a restriction on the property title. This means that the Land Registry will not register the transfer (effectively will block the sale) unless they receive a Certificate of Compliance signed by BVT to tell them that we have checked the Deed and are happy for the transfer to proceed.
So as part of the conveyancing process, BVT will be in correspondence with both the sellers and the buyer’s solicitors, often filling out and returning questionnaires and answering multiple queries. We will check that the Stewardship Charge is paid up to date and ensure that there are no Breaches of Covenant against the property. We will usually supply copies of accounts and information on the Wear and Tear Fund.
Then we will spend time checking the Deed is filled out correctly and correspond with the solicitor if there are any mistakes.
Once all this is dealt with, we then create the Certificate of Compliance (a legal document), have to get it signed by one of our Trustees, a Power of Attorney or our conveyancer and then send this off to the solicitors.
At the end of the process, there is a legal requirement to provide us with a Notice of Transfer. We then have to check and acknowledge this and then use it to update our systems to the new information, noting any charges (such as a mortgage) against the property.
All of this involves a considerable amount of staff time and resources. This time has to be paid for as part of the property sale as it is not fair to charge this work to the Stewardship Charge as this would mean that all the residents would be paying for the costs involved in you selling your property and we would not consider that this is fair.
This is why we charge a flat rate of £294 (including VAT) for all the admin costs and the costs involved in drawing up and issuing the legal documents.
It is down to negotiation between the buyer and the seller as to who pays the fees, we do not specify this. As there is legal obligations on both buyer and seller, it is often split between them, but it is down to them to decide.
When buying a new property from the developers, there are no fees involved from BVT as there are no requirements for any of the legal work that is involved in a resale. Any resident involved in buying a second hand property may be asked to contribute towards the fees but that’s down to negotiation with the seller.
The requirements for this process and covering the fees are detailed in the TP1 under clauses 5, 7 and in the definition of the Stewardship Charge in Clause 1.
We do appreciate that this is an additional cost in what is already an expensive process (buying and selling a house). It should be seen as part of the overall legal costs, similar to paying a solicitor for their time to deal with all of the other legal matters. BVT work hard to keep the costs to a bare minimum and certainly the £294 is below average for the fees involved in this sort of process.
Transfer of Equity
The fee covers both the administration costs, issuing the Certificate of Compliance, the notice fee as well as VAT (our actual fee is £245 + VAT). If it was just amending a name or removing a name, for example, then that would be very little work and there would be no fees involved. However, removing a name from a property is, in legal terms, almost the same as selling the property to someone else.
Although, the removal of a name from the property would seem a straightforward process, you have to engage a solicitor as there are a number of legal processes that must take place. One of those processes is informing the Land Registry that we consent to the transfer.
To do this, we need to deal with any solicitors enquiries, undertake several checks on our records and then create the Certificate of Compliance (a legal document), have to get it signed by one of our Trustees, a Power of Attorney or our conveyancer and then send this off to the solicitors.
At the end of the process, there is a legal requirement to provide us with a Notice of Transfer. We then have to check and acknowledge this and then use it to update our systems with the new information, noting any charges (such as a mortgage) against the property.
All of this involves a considerable amount of staff time and resources. This time has to be paid for as part of the property sale or transfer as it would not be fair to charge the Stewardship Charge as otherwise this would mean that all the residents would be paying for the costs involved in your property transaction.
This is why we charge a flat rate of £245 + VAT for all the admin costs and the costs involved in drawing up and issuing the legal documents.
If you would like more information regarding the process, or your solicitor has asked for details please email Stewardship@bvt.org.uk or call 01952 898524.