1.2 Commercial Property: Contract for Sale

Question 1

Form required to give to LR for registration - from HMRC

Answer 1

SDLT5

Question 2

What should B obtain before exchange if S opting to tax

Answer 2

Copy of option + HMRC acknowledgment

Question 3

If conditional contract is dependent on ‘satisfactory PP’, what to define

Answer 3

What = satisfactory

Question 4

Which is stronger - agreed or unilateral notice

Answer 4

Agreed

Question 5

If option to tax personal or tied to property?

Answer 5

Personal

Question 6

Why might S opting to tax put B off

Answer 6

Raises costs, unattractive if purchaser exempt

Question 7

Pro of S opting to tax for B

Answer 7

B can offset input by registering and charging output on e.g. Ts (as rent)

Question 8

What is an option

Answer 8

Within X period, L can be forced to sell to developer

Question 9

When should Completion in conditional C be triggered

Answer 9

By Challenge Period expiring, which triggers the Unconditional Date, 10 BD before Completion Date

Question 10

What to do with SCPCs if VAT is being charged

Answer 10

SCPC 2 - leave as is

Question 11

What right should S retain, in case B goes insolvent

Answer 11

Right to rescind immediately

Question 12

What happens if the event on which the C was conditional is unsatisfactory? x4 things that B may do

Answer 12

Can appeal to LA (may be O under C), withdraw (if possible under C), waive conditions, or negotiate w/ LPA

Question 13

What does PWB have under option before exercised

Answer 13

Equitable interest

Question 14

What is a conditional contract

Answer 14

B imposes conditions on completion, e.g. dependent on environmental survey

Question 15

What is a Long Stop Date

Answer 15

Latest date by which time, if not completing, then C = terminated

Question 16

What should B obtain at completion if S opting to tax

Answer 16

Duly receipted VAT invoice

Question 17

Con of S opting to tax for B

Answer 17

Can put purchasers/Ts off, extra admin and potential cash flow implications

Question 18

What standard contractual terms are usually incorporates

Answer 18

SCPCs

Question 19

What fee is usually payable under option C

Answer 19

Option fee

Question 20

What is a pre-emption C

Answer 20

S gives B right of first refusal

Question 21

When might VAT be payable

Answer 21

S opts to tax or building 3 years or less

Question 22

What should ‘Option Period’ in option C cover

Answer 22

Time for key decisions to be made before PWB knows if they want to exercise

Question 23

If appeal is possible of the event on which C is conditional, what should C state

Answer 23

Time limits for any challenge to have expired before C becomes unconditional

Question 24

Two kinds of purchasers who are exempt from paying VAT

Answer 24

Bank/BS

Question 25

What is the effect of S opting to tax

Answer 25

Converts supply to standard rated

Question 26

'Market value' under option C should be defined as what

Answer 26

Open MV to be agreed between the parties, and if not agreed, by 3rd

Question 27

Four kinds of contract

Answer 27

Conditional, option, pre-emption and absolute

Question 28

What should PWB do if option in their favour

Answer 28

Register as agreed or unilateral notice

Question 29

What to do with SCPCs if VAT not being charged

Answer 29

Incorporate Condition A1

Question 30

How to opt to tax?

Answer 30

Inform HMRC within 30 days of decision

Question 31

How to work out SDLT if VAT payable

Answer 31

Add to purchase price, then SDLT on total

Question 32

If pre-emption C has expired but still on OCs, what to do

Answer 32

Ask for evidence of expiry and remove as condition of C

Question 33

How to find out if pre-emption C in place

Answer 33

Check if registered in Charges + Proprietorship Reg

Question 34

If unsatisfactory PP, what negotiation could be had with LPA

Answer 34

Enter into s.106 TCPA

Question 35

What to do if pre-emption C still active

Answer 35

Investigate into whether PWB interested

Question 36

How might 'satisfactory PP' be defined (for conditional C)

Answer 36

by ref to list of conditions which should **_not_** be affected by PP

Question 37

What kind of C4S should be registered at LR and why

Answer 37

Option - estate contract so needs to be reg to protect equitable interest