Any house built since the 1st October 1964 requires planning permission. The purchaser's solicitor will need to make sure that the planning documentation is in order. This relates to the original construction and any extensions on the property. If extensions have been built, whether exempt from planning or not, a certificate from an architect/engineer setting out the position will be required. The certificate should set out compliance of the property with planning permission and building regulations.
It is important that the planning documents are in order before the proposed sale to avoid later delays and issues that could prevent or delay completion.
2. PROPERTY TAX
If you own a residential property in the State you are liable for payment of LPT and NPPR (where the property is not your principal private residence). Certain exemptions apply to both taxes. We refer you to the website of the Revenue Commissioners for a detailed breakdown of these. www.revenue.ie
Where the property is liable to these taxes you must ensure that you have the requisite receipts from the Revenue Commissioners.
The entire LPT payment should be made for the year of the most recent liability. An apportioned figure can be obtained for the balance of the requisite period of liability in a situation where the purchaser is not exempt. If the property has been undervalued for the purposes of the liability bands we suggest that you amend the return. It is also beneficial to retain any information that you based the valuation of the property on in May 2013 if to hand.
Where a property is exempt from NPPR it is possible to obtain confirmation of exemption from the local authority, by completing their application form, and providing them with evidence that the property has been your principal private residence since the introduction of the charge. The requirements of the particular local authority may vary but it appears that utility bills since 2009 (the year of the introduction of the tax) are accepted as evidence that it is the principal private residence. Some solicitors are requesting these on completion and we suggest that you contact your local authority to obtain the cert in order to ensure that delays are avoided on closing.
3. BUYING AND SELLING
It is important that you work closely with your solicitor if you wish to do both transactions at the same time. The particular contracts should be reflective of your requirements and the purchase should be made contingent on the sale of your property where this is the preference.
If you wish to buy your new house before selling your old one you may need to arrange bridging finance. It is important you do this as early as possible to avoid delays or problems in the transaction.
4. INSTRUCT YOUR SOLICITOR AS EARLY AS POSSIBLE
This will allow your solicitor to take up the title documents and to prepare the contracts for sale before the property has gone ‘sale agreed’. This allows the solicitor to examine any issues with the title and make arrangements to correct any deficiencies. You will also be required to complete a vendor’s questionnaire that will provide your solicitor with certain information that will be included in the contracts. If legal issues are disclosed, they can be assessed, remedied where possible, and/or suitable conditions set out in the contract to deal with them.
5. - NEGATIVE EQUITY
If there is a shortfall with the mortgage, agreement must be made with the bank concerning:
- How much the bank are willing to accept?
The ‘net proceeds of sale’ figure is agreed with the bank. This is the figure that the bank will accept in order to ‘remove’ the mortgage from the property. This allows the purchaser to obtain clean title. Both solicitors in the transaction will require sight of a letter of confirmation from the lending institution.
- How the shortfall will be dealt with?
The bank should confirm how the remaining debt owed on the mortgage will be dealt with, ie repayments, term loan etc.
If you have any queries in relation to property transactions please do not hesitate to contact a member of our property department.
If you have any further queries, please contact any of the following from our property law group:
- Ray Fitzpatrick, Associate Solicitor
09 April 2014