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Written by Ruban Selvanayagam
Ruban Selvanayagam
Ruban Selvanayagam is a professional cash homebuyer, private rented sector landlord, auction specialist, blogger and media commentator.
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Edited by James Durr
James Durr
James Durr is a passionate property entrepreneur with a strong foundation and background in business.
What is a Completion Statement?
A completion statement is a document that breaks down the financial inputs and outputs of a house sale.
The conveyancers will forward different statements to both the home buyer and seller between exchange and completion.
This should give you enough time to check through the financials and raise any queries.
In this post, we will go through the essentials of what the different types of completion statement should look like.
Completion Statement for the Home Buyer
As the buyer will generally incur a wider range of costs compared to the seller, this completion statement tends to contain more detail.
It will break down the sums of money that need to be paid in order to finalise the sale.
The typical costs are highlighted below and will be subject to VAT.
Freehold Property Completion Statement (for the Buyer)
In order of importance, below are what should appear when purchasing a freehold property.
The Purchase Price
This will be the price agreed for the sale. It will initially appear on the Memorandum of Sale (drawn up by the estate agent).
The only way it could change is if the property purchase price is renegotiated mid-sale. This may be as a result of negative searches or defects appearing during the survey process.
Mortgage Advance
This will be the amount sent from the lender to the conveyancer’s clients account prior to completion day.
Deposit Paid on Exchange of Contracts
This will usually be 10% of the purchase price (sometimes lower). This will be paid without any associated fees (which will due upon completion of the sale).
Remainder Deposit
The outstanding difference between the agreed purchase price and the mortgage advance minus the deposit already paid at exchange.
Reservation Fee
Often the case with new build or part-exchange house purchases, any payments previously made will be deducted from the final purchase price.
Help to Buy Scheme / Help to Buy ISA
Any payments transferred from these schemes will appear as a receipt.
Cashback Mortgage Payments
Some lenders entice borrowers by offering a sum of money to help things along. If this is the case, it will appear in the receipts section of the completion statement.
Chattels / Fixtures
In some cases, household items like washing machines, dishwashers, microwaves, fridge freezers, built-in wardrobes and other furniture are included in the purchase price.
However, sometimes the seller and buyer may agree to payment of a further sum of money being paid which will be listed here.
Stamp Duty Land Tax
Most buyers will need to pay a percentage of the value of the property to the HMRC in the form of Stamp Duty Land Tax (SDLT).
Note that there are some stamp duty exemptions, including for first-time buyers, those that are buying multiple properties, charities and registered social landlords. Buy-to-let and second home buyers will, however, incur an extra stamp duty surcharge.
The conveyancer has a legal responsibility to pay this sum on your behalf within 30 days after completion.
There are also different rules and calculations for stamp duty in Wales and in Scotland.
Searches
Conveyancing searches are disbursements (third party costs) usually paid for at the start of the legal process. The completion statement should breakdown the various searches you have taken (and the cost of each).
Pre-Completion Checks
An OS1 search will also need to be undertaken which prevents the seller from registering any charges.
Conveyancing Acting for the Lender
If your conveyancing solicitor is not on the mortgage firm’s panel, an independent solicitor who is may have to be ‘brought in’. If so the cost will be added into the statement.
In our experience, however, many conveyancers will absorb the extra legal fees themselves to keep your business.
Land Registration Fee
Upon completion, the conveyancer will update the HM Land Registry records that will confirm you’re the new owner.
The fees vary depending on your property’s final sale price and whether it’s a new home.
Other Disbursements
Other ancillary costs that may be included in the completion statement (see here for more info.):
- Anti-Money Laundering (AML) checks;
- Title Register (Deed) / Plan download;
- Property fraud check;
- Bankruptcy fraud check;
- Bank / telegraphic transfer (CHAPS) fees.
Power of Attorney
The conveyancers will charge extra to process the relevant paperwork if you plan to use a representative to progress the purchase.
Guarantor Involvement
A charge for the extra time required to administer further checks for the mortgage company.
Indemnity Insurance
The conveyancer will probably cover this cost on your behalf and require reimbursement at the point of completion.
Statutory Declarations
Time required to create a new legal obligation over the property that’s not in the deed.
Gifted Deposit
To verify that these funds are coming from a legitimate source, some conveyancers may charge extra.
Right to Buy Administration
A council bought property will require extra liaison and time to manage the transfer.
Shared Ownership Administration
These sales are always more complex and need more time, given the conveyancer needs to deal with what is effectively another owner.
Retentions
If monies are held back post-completion, supplementary paperwork may be necessary to legally protect the funds. The costs are usually incurred by the buyer.
Restrictions
Specific documents and registrations are needed to limit any seller dispositions. These scenarios create extra complexity and therefore billable time for the conveyancer.
Tenancy / Licence Agreements
Extra documentation is required if there are tenants staying in the property or the seller will remain temporarily once sold.
New Build Property Purchases
The buyer may wish to make extra enquiries regarding the developer or surrounding land.
With the leasehold scandals in recent years, more conveyancers are being requested to review future ground rent increases and other details in the small print.
Contaminated Land Issues
If the land was historically used for industrial or hazardous uses, extra checks will be made to everything is clear.
Declaration of Solvency
Only necessary if a property is sold under market value to demonstrate that the seller is solvent. This cost is usually borne by the buyer (due to getting the benefit of a discounted price).
Complex Chains
Extra fees may get charged for any unexpected case management related to the purchase.
Dealing with Third-Party Solicitors
Only necessary if the conveyancer needs to consult other professionals working in separate areas of law.
Trusts
If this legal mechanism is involved in the purchase, the conveyancer will probably charge more to make sure any transfers are compliant.
Archiving Storage
It’s unusual for conveyancers to charge for this unless the case was particularly large.
Residential Abortive Transaction Insurance (RATI)
If the sale falls through, this is a policy you can take out to claim back on disbursements, conveyancing service charges, survey / valuation report, mortgage arrangement fees and other transactional costs.
Delayed Completion
If the sale is intentionally pushed forward, the conveyancers may wish to charge an extra fee.
Sample of a Freehold Property Completion Statement (for the Buyer)
Please click on the image below to see a PDF sample of a freehold property completion statement:
Leasehold Property Completion Statement (for the Buyer)
In addition to the above, if the property is a leasehold, the completion statement is likely to detail some other expenses:
Leasehold Sale Pack
As well as requesting all the relevant information from the freeholder / management company, the conveyancer will need to analyse the lease to ensure there’s nothing for the buyer to be concerned about.
Leasehold Enquiries
On the back of reviewing the leasehold sale pack, the buyer’s conveyancer usually seeks clarification on various aspects of the lease. This usually requires a series of email exchanges and confirmations (that don’t occur with freehold sales).
It’s worth noting that any form of leasehold extension (if the remaining term is under 80 years, for example), is a separate legal matter.
Deed of Covenant
The conveyancer may need to draft the relationship between the leaseholder and the management company.
Landlord Notice Fee
Providing the freeholder of notification of change of ownership plus the registration of a secured charge (usually a mortgage) against the property.
Landlord Engrossment Fee
The freeholder may levy a fee to produce a fresh lease for the buyer which will be due prior to completion.
Certificate of Compliance
Removing any restriction that prevents the buyer from registering as the new owner will require extra paperwork.
Notice of Transfer Fee
A simple exercise to confirm future leasehold and ground rent payment details that may come with an additional fee.
Notice of Charge Fee
Another fairly simple task where the conveyancer provides details of mortgages and secured charges to the freeholder.
Service Charge / Ground Rent Advance
Some freehold management companies will request these payments in advance which will be transferred upon completion.
Non-Standard Expenses
There may be further costs if the conveyancer has to engage in further checks should, for example, the lease be old.
Share of Freehold
Note that the fees for a ‘share of freehold’ property are likely to be the same as the conveyancer will still have to deal with the freeholder / management company.
However, there may be extra fees to formally add the buyer to the Memorandum and Articles of Association documents (which will need to be submitted to Companies House).
Also, a new share certificate will need to be issued – the cost of which will be added to the conveyancing bill.
Sample of a Leasehold Property Completion Statement (for the Buyer)
Please click on the image below to see a PDF sample of a leasehold property completion statement:
Completion Statement for the Home Seller
The seller’s completion statement is likely to more succinct as this party usually has less costs.
Estate Agency Fees
The conveyancer will usually approach the agent for confirmation.
The fee will be deducted from the proceeds of sale.
How much you pay will depend if you’re using a traditional or online estate agency (the latter generally charges less).
Although unlikely to appear on the completion statement you may have capital gains tax to pay (check out our CGT calculator here).
Mortgage Discharge
This will be the amount of money remaining on the mortgage which is being paid off.
Early Redemption Charges (ERCs)
If you are paying off your mortgage before the term has ended, the lender will invariably.
This may also be referred to as ‘mortgage account closure fees’.
The details of any figures out will be passed on to the conveyancer.
Multiple Lender Administration / Redemptions
Unless the conveyancer is dealing with multiple lenders and/or converted unsecured debts, this cost will usually be included in the overall fee. Note that this may also be referred to as ‘redeeming the mortgage’.
Court Attendance
Most commonly in repossession cases, should the conveyancer need to provide court representation there will be further fees for time and associated administrative costs.
Inherited Property Transactions
There may be a need to bring in external legal advice, if the property being sold has been passed on after the decease of the previous owner.
Power of Attorney
The conveyancers will charge extra to process the relevant paperwork if you plan to use a representative to progress the sale.
Unregistered Property Fee
For extra conveyancing work to establish ownership and revise the HM Land Registry files.
Defective Title Issues
More of the conveyancer’s time will be required if any title ‘repairing’ is necessary at HM Land Registry.
Bankruptcy Charges (Checks)
Typically for property sales to and from companies, further fees will be made to remove insolvency-related notices on the title.
Transferring Equity Fees
Extra effort will be required if the eventual proceeds of the sale are transferred to another asset prior to completion.
Building Regulation Enforcement Notice / Unresolved Structural Matters
The seller may need the conveyancer to resolve any non-compliance issues if there have been any extension or building works.
Complex Chains
Extra fees may get charged for any unexpected case management related to the sale.
Dealing with Third-Party Solicitors
Only necessary if the conveyancer needs to consult other professionals working in separate areas of law.
Trusts Administration
If this legal mechanism is involved in the sale, the conveyancer will probably charge more to make sure any transfers are compliant.
Residential Abortive Transaction Insurance (RATI)
If the sale falls through, this is a policy you can take out to claim back on conveyancing service charges and other transactional costs.
Note that it’s more common for buyers to take out this type of policy.
Delayed Completion
If the sale is intentionally pushed forward, the conveyancers may wish to charge an extra fee.
There will typically be separate or attached completion statements if it is an inherited property or divorce case, as other solicitors will need to be consulted.
Sample Completion Statement for the Home Seller
Please click on the image below to see a PDF sample of a property seller’s completion statement:
