1.2 Commercial Property: Contract for Sale Flashcards
Form required to give to LR for registration - from HMRC
SDLT5
What should B obtain before exchange if S opting to tax
Copy of option + HMRC acknowledgment
If conditional contract is dependent on ‘satisfactory PP’, what to define
What = satisfactory
Which is stronger - agreed or unilateral notice
Agreed
If option to tax personal or tied to property?
Personal
Why might S opting to tax put B off
Raises costs, unattractive if purchaser exempt
Pro of S opting to tax for B
B can offset input by registering and charging output on e.g. Ts (as rent)
What is an option
Within X period, L can be forced to sell to developer
When should Completion in conditional C be triggered
By Challenge Period expiring, which triggers the Unconditional Date, 10 BD before Completion Date
What to do with SCPCs if VAT is being charged
SCPC 2 - leave as is
What right should S retain, in case B goes insolvent
Right to rescind immediately
What happens if the event on which the C was conditional is unsatisfactory? x4 things that B may do
Can appeal to LA (may be O under C), withdraw (if possible under C), waive conditions, or negotiate w/ LPA
What does PWB have under option before exercised
Equitable interest
What is a conditional contract
B imposes conditions on completion, e.g. dependent on environmental survey
What is a Long Stop Date
Latest date by which time, if not completing, then C = terminated
What should B obtain at completion if S opting to tax
Duly receipted VAT invoice
Con of S opting to tax for B
Can put purchasers/Ts off, extra admin and potential cash flow implications
What standard contractual terms are usually incorporates
SCPCs
What fee is usually payable under option C
Option fee
What is a pre-emption C
S gives B right of first refusal
When might VAT be payable
S opts to tax or building 3 years or less
What should ‘Option Period’ in option C cover
Time for key decisions to be made before PWB knows if they want to exercise
If appeal is possible of the event on which C is conditional, what should C state
Time limits for any challenge to have expired before C becomes unconditional
Two kinds of purchasers who are exempt from paying VAT
Bank/BS
What is the effect of S opting to tax
Converts supply to standard rated
‘Market value’ under option C should be defined as what
Open MV to be agreed between the parties, and if not agreed, by 3rd
Four kinds of contract
Conditional, option, pre-emption and absolute
What should PWB do if option in their favour
Register as agreed or unilateral notice
What to do with SCPCs if VAT not being charged
Incorporate Condition A1
How to opt to tax?
Inform HMRC within 30 days of decision
How to work out SDLT if VAT payable
Add to purchase price, then SDLT on total
If pre-emption C has expired but still on OCs, what to do
Ask for evidence of expiry and remove as condition of C
How to find out if pre-emption C in place
Check if registered in Charges + Proprietorship Reg
If unsatisfactory PP, what negotiation could be had with LPA
Enter into s.106 TCPA
What to do if pre-emption C still active
Investigate into whether PWB interested
How might ‘satisfactory PP’ be defined (for conditional C)
by ref to list of conditions which should not be affected by PP
What kind of C4S should be registered at LR and why
Option - estate contract so needs to be reg to protect equitable interest
