Study Notes · 40 sections
Completion is the moment when ownership of the property transfers from seller to buyer. It is the climax of the conveyancing transaction - the day your client gets the keys and becomes the legal owner. But there's significant work to do before and after completion. This topic covers the entire completion process from start to finish.
Everything in the transaction leads up to completion, and everything after completion wraps up the formalities. Get completion right, and your client will remember you fondly. Get it wrong, and you may face a negligence claim. Preparation and attention to detail are essential.
In the days leading up to completion, there are several essential tasks that must be completed. The transfer deed needs to be signed, pre-completion searches carried out, mortgage funds arranged, and completion statements exchanged. Miss any of these, and completion may be delayed.
The TR1 is the standard form of transfer deed for freehold property. It is the document that actually transfers ownership from seller to buyer. The TR1 must be signed by the seller (and any co-owners) before completion. For leasehold property, a TP1 is used instead. The transfer is then sent to the buyer's solicitor before completion.
The witness must be present when the transfer is signed. They must see the seller sign, not just acknowledge the signature afterward. The witness should be independent - a family member who is benefiting from the transaction is not ideal, though not prohibited. The witness details must be clearly recorded on the transfer.
When the seller is a company, the transfer must be executed according to the Companies Act 2006. This typically means two directors sign, or one director signs in the presence of a witness. The company may also use its company seal (though this is now less common). Overseas companies may have different execution requirements.
Priority searches (Form OS1 and OS2) are carried out at the Land Registry immediately before completion. The OS1 search protects the buyer's priority for registration of their new ownership. The OS2 search reveals any pending applications that might affect the property. These searches are essential - without them, the buyer could lose priority.
A bankruptcy search is usually carried out against the seller immediately before completion. This checks whether the seller has been made bankrupt since the transaction began. If the seller is bankrupt, the trustee in bankruptcy could overturn the sale. The search protects the buyer from this risk.
Pre-completion searches must be carried out on the day of completion or the day before. Search results expire quickly. If you complete without carrying out these searches and something goes wrong (like a bankruptcy or competing registration), your client could lose the property. Always make time for these essential searches.
Before completion, the seller must provide completion information. For commercial property, this is done via CPSE.1 (Commercial Property Standard Enquiries completion form). This form confirms details such as occupancy, rents, deposits, and service charge information. It helps ensure a smooth transition.
If the buyer is obtaining a mortgage, you must send detailed instructions to the lender before completion. This includes the final search results, the transfer deed, and a completion statement showing how the funds should be applied. The lender will then send the mortgage funds by telegraphic transfer on the completion day.
Physical completion is the traditional method where the buyer and seller (or their solicitors) meet in person to exchange documents and keys. This still happens, particularly in rural areas or where same-day completion and handover of keys is needed. However, it is becoming less common as electronic completion takes over.
Electronic completion (also called "documented exchange") is now the most common method. Solicitors do not meet. Instead, they exchange completion documents by post and carry out completion by telephone agreement on a specified day. The transfer and other documents are deemed to be "delivered" at the agreed time.
Electronic completion has become standard practice. It's more efficient and doesn't require solicitors to travel. Physical completion is now the exception, typically used only when the parties specifically request it or when immediate key handover is needed. Discuss the completion method with your client in advance.
The method of completion must be agreed by both parties. You cannot insist on electronic completion if the other side wants physical completion, and vice versa. If there is disagreement, negotiate to find a solution. Usually, preference is given to the party with the greatest need (often the buyer who needs keys immediately).
At the moment of completion, several things happen simultaneously. The buyer pays the balance of the purchase price. The seller hands over the transfer deed (and the keys if meeting in person). Legal title passes from seller to buyer. The buyer becomes entitled to possession. It is the moment of truth for the entire transaction.
From the moment of completion, the buyer becomes the legal owner of the property. However, this ownership is not yet registered at HM Land Registry. The buyer owns the property in equity until registration completes. The seller's name remains on the register until the buyer's ownership is registered.
The buyer becomes entitled to possession from completion. If the property is vacant, the buyer can move in immediately. If the property is occupied (for example, the seller is renting it back for a short period), there may be a licence to occupy or similar arrangement. Otherwise, the seller must vacate and hand over the keys.
Once completion has taken place, it cannot be undone. The transfer has occurred, and the buyer now owns the property. If there has been a mistake, it may be possible to rectify it - but this is a separate transaction, not a reversal of completion. Be absolutely certain before confirming completion is happening.
Completion may feel like the finish line, but there are important post-completion tasks to handle. SDLT must be filed and paid, the ownership must be registered at the Land Registry, existing charges must be discharged, and the file must be archived properly. These tasks are time-sensitive and legally required.
Stamp Duty Land Tax (SDLT) is payable on most property purchases. The buyer must file an SDLT return and pay any tax due within 14 days of completion. This is done electronically through the HMRC SDLT portal. Failure to file on time results in penalties and interest. Even if no tax is due (because the property is below the threshold), a return must still be filed.
The SDLT return must be filed and any tax paid within 14 days of completion. This is a strict deadline - HMRC imposes penalties for late filing. The penalty is at least £100 even if no tax is due, and increases with delay. Don't put this off - file the return immediately after completion.
Make filing the SDLT return a priority on completion day. You will need the Unique Transaction Reference Number (UTRN) for the Land Registry application, so there's no benefit to delaying. File promptly, avoid penalties, and keep the UTRN safe for the registration application.
After completion, the buyer's ownership must be registered at HM Land Registry. This is done using form AP1 (Application for registration). The application includes the transfer deed, the SDLT certificate, and the appropriate fee. Registration is what updates the register to show the buyer as the new owner.
Land Registry processing times vary, but residential registrations typically take around 2-4 weeks. Commercial properties may take longer. During this time, the buyer owns the property but is not yet shown as the owner on the register. The buyer's solicitor receives the updated title register once registration is complete.
If the seller had a mortgage or other charge on the property, this must be discharged from the register. The seller's solicitor uses the completion funds to pay off the mortgage, then submits form DS1 to the Land Registry to remove the charge from the register. This should be done promptly after completion.
Solicitors must retain conveyancing files for a minimum period after completion. For residential property, the Law Society recommends retaining files for at least 6 years after completion. For commercial property, longer retention may be advisable. Files should be stored securely and can be destroyed after the retention period expires.
After completion, you should provide your client with a final report or completion letter. This summarises what was done, confirms registration has been applied for, provides important documents (like the SDLT certificate and updated title register), and explains any ongoing obligations (like maintaining buildings insurance).
Post-completion tasks may feel like administrative cleanup, but they are essential. Proper registration protects your client's ownership. SDLT compliance avoids penalties. Good record-keeping protects you from future claims. Treat post-completion with the same care as the rest of the transaction.