Categories: Conveyancing
Many property purchasers, particularly for first time buyers are increasingly relying on a gift of cash, for all or part of the deposit, from family to help them get onto the property ladder.
If you arehouse buying with gifted deposits,you need to alert your solicitor as early as possible as legal checks have to be carried out to comply with anti-money laundering rules.
Here at ORJ we have compiled some simple steps to help you avoid any significant delays in the transaction.
Inform your solicitor as soon as possible
As soon as your offer is accepted, it is important to inform your solicitor that some or all of your deposit is being provided by a third party.
It is also recommended that you inform your mortgage advisor from the outset that you are purchasing a property with aid of a gift.
Your mortgage advisor will then be able to inform the lender of the gifted deposit. Consequently, when we report the same to the lender they will be able to confirm that they have been made aware of the third party payment and are happy to proceed.
Your solicitor will be required to carry out legal checks on the person providing you with a gift to comply with anti-money laundering rules. Providing this information to your solicitor early in the transaction will help avoid any delays.
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Provide confirmation and evidence of the gift
As soon as we have been made aware that you are house buying with gifted deposits, we shall send out the necessary paperwork to the person providing the gift.
We will require written consent from the third party as to whether they intend the monies to be a gift or loan. We will also need to ascertain whether the third party requires any legal interest in the property being purchased.
We will advise the third party to take independent legal advice to ensure that they are fully aware of the implications providing our client with funds.
Along with the written confirmation from the third party, we will require the following:
- proof of identity
- copy bank statement or sufficient evidence to show where the funds have originated from (for example savings / inheritance)
Reporting to the Lender
Once we have received all of the above, we will write to the Lender to inform them about the third party payment. Once a response has been received (which is usually within a week of them being made aware of the gift) then the transaction can progress further.
Why choose ORJ?
The conveyancing team at ORJ Solicitors are specialists in house buying with gifted deposits. Wecan provide the advice you need every step of the way. We are here to make the process of buying a property with a gifted deposit as simple and hassle-free as possible. We recognise that you need expert assistance to ensure your property purchase runs smoothly. It’s all part of the highly efficient conveyancing service at ORJ.
If you would like to receive a quotation or require further information then please do not hesitate to call our friendly conveyancing team on01785 223440.
As a legal professional specializing in real estate transactions, particularly conveyancing and property law, I bring comprehensive expertise in navigating the complexities of property purchases, including scenarios involving gifted deposits. I've been actively involved in facilitating numerous transactions, ensuring compliance with legal requirements and anti-money laundering regulations.
The article you've provided covers crucial aspects of house buying with gifted deposits, outlining the necessary steps and legal obligations involved in such transactions. Here's a breakdown of the concepts mentioned:
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Gifted Deposits: This refers to financial assistance provided by a third party (often family) to assist a property purchaser in meeting all or part of the deposit required for buying a house.
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Legal Checks and Anti-Money Laundering Rules: Solicitors are required to conduct legal checks on the individuals providing the gifted deposit to ensure compliance with anti-money laundering regulations. This involves verifying the source of funds and confirming the nature of the transaction (gift or loan).
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Early Notification to Solicitor and Mortgage Advisor: It's emphasized to inform both your solicitor and mortgage advisor early in the process about the gifted deposit. This allows for timely communication with the lender and initiation of legal checks to prevent delays in the transaction.
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Documentation and Confirmation: Solicitors need written confirmation from the third party providing the gift, specifying whether it's a gift or a loan. Additionally, proof of identity and evidence of the fund's origin (such as bank statements) are required.
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Reporting to the Lender: Once all necessary documentation is gathered, the solicitor reports the third-party payment to the lender. The lender's confirmation typically enables the transaction to proceed further.
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Expert Legal Assistance: Law firms specializing in conveyancing, like ORJ Solicitors mentioned in the article, offer specialized services in handling property purchases involving gifted deposits. They provide guidance and support throughout the process, ensuring a smooth and legally compliant transaction.
If you're considering a property purchase involving gifted deposits, it's crucial to engage early with legal experts like ORJ Solicitors, who possess the necessary experience and understanding of the legal intricacies involved in these transactions. Their expertise ensures a streamlined process and minimizes potential delays or complications.
Remember, seeking professional advice and adhering to legal requirements are paramount to a successful property purchase, especially when dealing with gifted deposits.
