What Solicitors Check on a Family Concessionary Purchase: Full Guide

A family concessionary purchase can be an efficient and cost-effective way to buy a property with the help of a parent, grandparent, or other relative. By selling at below market value, the family member effectively gifts equity to the buyer, which some lenders allow as the deposit. However, these cases require enhanced legal checks to ensure transparency and compliance. Understanding what solicitors check on a family concessionary purchase helps both buyer and seller prepare for a smooth transaction.

This guide explains the key legal checks, documents, and verification steps solicitors carry out during a family concessionary sale. It provides general information only and does not offer regulated legal or mortgage advice.

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Why Solicitors Play a Critical Role in Family Concessionary Purchases

Because the transaction involves:

• A discounted sale price
• A family relationship
• Gifted equity
• Potential tax considerations
• Lender legal requirements

…solicitors must ensure everything is documented properly and the sale is compliant with property, financial, and anti-money-laundering regulations.

Their role is to protect both parties and confirm the lender can rely on the legal work.

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Key Checks Solicitors Carry Out in a Family Concessionary Purchase

Below is a full breakdown of the checks most solicitors perform.

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1. Confirming Legal Ownership of the Property

Solicitors must verify that the selling family member legally owns the property. This involves:

• Reviewing Land Registry title deeds
• Checking for charges, restrictions, or notices on the title
• Confirming the seller has full right to sell

If any third-party interests exist, such as shared ownership or outstanding charges, these must be resolved before completion.

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2. Drafting and Reviewing the Gifted Equity Agreement

One of the key elements of what solicitors check on a family concessionary purchase is the gifted equity documentation.

Solicitors must:

• Draft or approve the gifted equity letter
• Confirm the discount amount
• Ensure the gift is unconditional
• Confirm no repayment is expected
• Verify the seller will not retain interest or charge over the property

This protects the lender and buyer from future disputes.

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3. Anti-Money-Laundering (AML) and Identity Checks

Both buyer and seller must pass AML checks. Solicitors verify:

• Passport or driving licence
• Proof of address
• Source of funds (for any cash contribution)
• Authenticity of identification documents

Even though the discount is gifted equity—not cash—the seller must still pass AML requirements.

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4. Relationship Verification (If Required by the Lender)

Some lenders ask solicitors to confirm the relationship between buyer and seller, particularly if:

• The discount is large
• The buyers and sellers have different surnames
• There is a blended or extended family structure

Evidence may include:

• A declaration of relationship
• Birth or adoption certificates

Not all cases require this step, but solicitors must comply where instructed.

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5. Reviewing the Sales Contract and Transfer Deed

Solicitors draft or check:

• The sale contract
• The TR1 transfer document
• Purchase price terms
• Any covenants or restrictions

The discounted price must be clearly stated, and the contract must reflect that it is a concessionary sale.

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6. Requesting and Reviewing the Mortgage Offer

Solicitors check that the mortgage offer:

• Matches the discounted purchase price
• Complies with lender requirements
• Includes gifted deposit details
• Supports the family concessionary structure

If the lender instructs conditions (e.g., confirmation of gifted equity wording), the solicitor must ensure compliance before completion.

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7. Property Searches and Enquiries

Family sales follow the same legal search processes as normal purchases, including:

• Local authority search
• Drainage and water search
• Environmental search
• Planning and building regulations checks

Solicitors also raise enquiries about:

• Boundaries
• Access rights
• Planning permissions
• Guarantees and warranties

Even in a family sale, the buyer must have full clarity about the property.

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8. Reviewing the Valuation and Ensuring It Supports the Discounted Sale

While the lender instructs the valuation, solicitors often check:

• The valuation amount
• Whether any legal issues were flagged
• Whether the property is acceptable for lending

If the valuation reveals structural issues, legal work may include additional enquiries or conditions.

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9. Ensuring No Undisclosed Loans or Side Agreements Exist

Solicitors must confirm that:

• There are no private repayment agreements
• No secondary charges will exist after the sale
• The seller is not retaining equity or a beneficial interest

Lenders require a clear, unconditional equity gift.

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10. Stamp Duty Land Tax (SDLT) Assessment

Even in a family concessionary purchase, Stamp Duty rules still apply.
Solicitors confirm:

• Stamp Duty is calculated on the purchase price, not market value
• Exceptions may apply for second homes or additional properties
• Correct forms are submitted to HMRC

Family relationship does not automatically exempt Stamp Duty.

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11. Addressing Potential Inheritance or Tax Considerations

Solicitors may advise the seller to seek independent financial advice if:

• The property is being gifted at a large discount
• The sale forms part of inheritance planning
• There are implications for future estate values

Tax advice is typically handled by an accountant or financial adviser, not the conveyancer, but solicitors flag when guidance may be needed.

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12. Preparing for Exchange and Completion

Solicitors coordinate:

• Contract signing
• Deposit arrangements (if any)
• Mortgage funds release
• Land Registry updates
• Completion statement
• Transfer of ownership

They also register the new title in the buyer’s name and remove any historic charges on completion.

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Additional Checks That May Apply

Depending on the case, solicitors may also:

Check for matrimonial rights

If the property is jointly owned or occupied by others.

Obtain consent from lenders

If the seller has an existing mortgage.

Verify leasehold information

If the property is a flat or leasehold home.

Review indemnity policies

If title irregularities exist.

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Common Issues Solicitors Find in Family Concessionary Purchases

Some challenges that can arise include:

• Outdated or missing title information
• Unclear boundaries or rights of way
• Missing planning permissions for extensions
• Large discounts requiring extra lender scrutiny
• Family members misunderstanding the gift implications
• Seller’s mortgage not being fully cleared by sale proceeds

Early preparation helps reduce delays.

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Tips for a Smooth Family Concessionary Purchase

Although this is not personalised advice, buyers often prepare by:

1. Ensuring the gifted equity letter is drafted early

Lenders often have strict wording requirements.

2. Gathering all ID documents upfront

AML checks can delay progress if documents aren’t ready.

3. Making sure the seller understands the implications

The seller must understand the gift is unconditional.

4. Preparing accurate property information

Including guarantees, planning approvals, and certificates.

5. Allowing time for full searches

Even family sales must undergo full due diligence.

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Summary

Understanding what solicitors check on a family concessionary purchase is essential for keeping the process efficient and avoiding unexpected delays. Solicitors handle everything from verifying ownership and drafting gifted equity documents to checking AML compliance, reviewing searches, assessing lender requirements, and ensuring a clean transfer of ownership. Even though the sale occurs within a family, it must meet the same legal standards as any other property sale—plus several additional requirements linked to the discounted price.

This article provides general information only. For personalised legal or mortgage advice, you should speak with appropriate regulated professionals.