The Purchase Deed

The buying and selling of land - or the property on it - is governed by far stricter rules than most other types of transactions. The transfer of property from one party to another will not generally be fully effective unless the transaction is backed by a purchase deed.

What is a Purchase Deed?

A purchase deed is a formal legal document by which one party’s interest in, or ownership of, property is transferred to another party. A deed for the sale of land must be in writing – there can be no valid transfer of land made by a verbal agreement. The deed must also be properly executed according to the legal requirements for deeds and the document must make it clear that it is intended to be a deed.

The contracts exchanged during the conveyancing process will set out precisely what has been agreed by the parties and should include all of the terms and conditions of the sale. The purchase deed then gives effect to those terms and conditions. The purchase deed will usually be prepared by the conveyancer acting for the buyer. However, the seller’s conveyancer may draft it and there may be certain types of sale where it is likely to be prepared on behalf of the seller – such as in the sale of new-build properties.

Once the deed has been prepared by the buyer’s conveyancer copies will be sent to the seller so that they can approve it and / or make any amendments to it. Once the final version of the deed has been agreed it is normal practice for the buyer to execute and sign the deed before sending it to the seller for their signature.

Signing a Purchase Deed

A purchase deed will almost invariably have to be signed in person by the parties to it. (There may be some types of transfer where a copy signature will suffice – and it is possible that this requirement may change in the future to reflect the increasing use of the internet to transfer and upload documents.) In some cases one person may sign on behalf of another person or on behalf of an organisation.

The party signing the deed must make clear that they are signing the document as a deed. The signature on the deed will have an accompanying ‘attestation clause’. Attestation is the statement which confirms that the party has signed the document as a deed in the presence of a named witness.

There may be some instances where a signatory to a deed cannot read it themselves – perhaps because they do not read English or because they have a disability. If this applies, the contents of the deed should be explained to the signatory in a way that they can understand before they sign. The attestation clause may then be amended to explain how the nature of the deed was explained to the signatory. If a party to a deed is physically incapable of signing the deed it may be signed on their behalf by someone else.

Witnessing a Purchase Deed

The party’s signature must be formally witnessed by an individual who also signs the deed themselves to confirm this. Generally, witnesses to a deed will be at least 18 years of age and not be closely related to signatory. Where a deed is signed on behalf of a party who is physically incapable of signing it themselves there should be two witnesses to the signature.

The Land Registry and Purchase Deeds

The purchase deed is the formal document which gives effect to a transaction involving the transfer of land from one party to another. The Land Registry of England and Wales, which now keeps records of most new transactions involving land, has special requirements for the way in which deeds for the purchase of land are prepared. Deeds which do not satisfy the Land Registry’s requirements may be rejected by them.

A pro forma purchase deed - form TR1 - which may be used for most property sales can be downloaded from the Land Registry’s website. The TR1 is one of the most commonly used purchase deeds in transactions involving the sale of a property. When only part of a pre-existing property is being sold the TP1 form may be used. The Land Registry gives guidance on their preferred wording for the execution of deeds. Following this guidance should help to minimise the risk of a deed being rejected by the Land Registry, as defective.