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SQE 1 - Property Practice > 1. Freehold Transactions > Flashcards

1. Freehold Transactions Flashcards

1
Q

Buyer’s Sol Aims

A

Ensure:

  • Seller has right to sell
  • Conditions of land and building adequate
  • Identify all rights affecting property
  • Identify any 3rd party rights
  • Property free from security interests
  • Sufficient funds to fund purchase
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2
Q

Lender’s Sol Aims

A

Ensure:

  • Seller has right to sell
  • Conditions of land and building adequate
  • Property is worth enough to cover any losses
  • Identify all rights affecting property
  • Identify any 3rd party rights
  • Property free from security interests
  • Sufficient funds to fund purchase
  • No discrepancies in lender’s understanding of transaction or buyers circs.
  • Security doc - Mortgage is valid and enforceable
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3
Q

Seller’s Sol Aims

A

Ensure that:

  • Contract review
  • Provide buyer’s Sol with what they need to proceed w/ purchase
  • Tie timings
    -Transfer legal ownership of property to buyer
  • Collect money from sale, repay mortgage and account to seller for balance
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4
Q

Pre Exchange

A
  • Buyer agrees price
  • Property Survey
  • Buyers Sol Investigates & report on title
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5
Q

Exchange

A
  • Seller & Buyer enter into contract on completion date
  • Buyer pays deposit
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6
Q

Pre-Completion

A
  • Buyer’s Sol orders mortgage funds
  • Seller’s Sol ensures all paperwork to transfer property on completion
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7
Q

Completion

A
  • Buyer’s Sol send purchase price to Seller’s Sol
  • Seller’s Sol sends paperwork to transfer property
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8
Q

Post-Completion

A
  • Seller’s Sol pays off mortgage and pays balance to seller
  • Buyers Sol pays SDLT and registers buyer as new owner on LandReg
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9
Q

Caveat Emptor

A

Buyer Beware

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10
Q

CE: Buyer’s Sol job to….?

A

Investigate and report to buyer.

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11
Q

Where does info about property come from?

A
  • Title to the property (LandReg)
  • Seller’s replies to enquiries
  • Searches (LA, LR, Statutory Undertakers-water and drainage companies)
  • Surveys
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12
Q

Exceptions to Caveat Emptor

A
  • Misrepresentation
  • Latent encumbrances and defect of title
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13
Q

Misrepresentation

A
  • False statement which induces buyer to enter into a contract
  • Estate agents/ Auction particulars of sale
  • Remarks made while viewing
  • Any communication from seller or their Sol
  • Concealing physical defects
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14
Q

Remedies for Misrep

A
  • Common Law remedies
  • Rely on sale contract - Standard conditions do not require the buyer to prove they were induced to rely on conduct or statement
  • Sufficient to prove there was error or omission
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15
Q

Latent Encumbrances

A

Something which is not apparent or cannot be discovered while inspecting property.
- Seller is under duty to disclose LI of which they are aware/ has the means to know acting reasonably/diligently.

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16
Q

Defect in title

A

Something that brings into question the Seller’s ownership of the property, or the rights and burdens that affect the property (typically missing title deeds)

17
Q

Co-Ownership Legal Title

A
  • Legal owners names on LandReg title
  • max 4
  • 18+
  • Legal ownership only be sole or joint tenancy
  • Legal owners hold property on trust for the benefit of the beneficial owners
18
Q

Co-Ownership Beneficial Title

A
  • Beneficial owners don’t have to be same as legal owners
  • Not registered at LandReg unless legalowner
  • no max no.
  • Any age
  • Beneficial ownership can be sol, joint tenancy or tenancy in common
19
Q

Beneficial Ownership Joint Tenancy

A
  • Cannot pass on share of property via will/intestacy
  • Beneficial JT collectively own the whole of the beneficial estate.
  • Seen as single entity
  • Right of survivorship applies if co-owner dies, surviving co-owners hold property between them
20
Q

Type of Survey

A
  • Basic Valuation - Cheapest- Identify any major obvious defects
  • Homebuyer Report - Suitable for most properties in reasonable condition younger that 150yrs
  • Full Structural Survey - Listed properties/extensive renovation/planned
21
Q

Beneficial ownership - Tenants in Common

A
  • Purchasers own their undivided share in the property and can share property in any proportions.
  • Right of survivorship does not apply. Shares will pass via will or intestacy.
22
Q

Tax Considerations

A
  • SDLT
  • CGT
  • VAT

SQE 1 - Property Practice (2 decks)

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