1.2 Freehold Estates - Pre-Contract Search & Inquiry Flashcards

1
Q

What is required for taking initial instructions from clients?

A

Client’s needs

  • Completion date
  • Buyer’s capacity
  • Use of property
  • Otherwise potential negligence claim

Real estate agent > Indirect instructions

Money laundering > New clients

Signed retained letter
- Otherwise TP liability (breach of warranty)

Verify instructions

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2
Q

What searches should Buyer’s solicitor conduct?

A

Additional property info

Statutory searches > Public registers

Local authority search

  • Necessary consents issued by Authority
  • Changed plans
  • Drainage and water search
  • Coalmining search
  • Environmental search
  • Chancel repair search
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3
Q

What pre-contract enquiries should be made?

A

Commercial property standard enquiries (CPSE)

  • Raised in all cases
  • Standard form => S’s solicitor

Further pre-contract enquiries

  • Analysed CPSE replies (after B’s solicitor reviewed search results)
  • Further info > Clarify responses
  • Rectify property issues
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4
Q

What information should be reported to the Client?

A

Replies to further enquiries

CPSE results

Search results

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5
Q

How is the contract made?

A

1) S’s solicitor sends draft contract to B’s solicitor
2) B’s solicitor reviews draft
3) B’s solicitor approves/sends markup to S’s solicitor
4) S’s solicitor approves/sends markup to B’s solicitor
5) Contract agreed

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6
Q

What is the structure of a contract?

A

Particulars

  • Transaction details (parties, price, address, deposit)
  • Plan
  • Signed by parties

Standard conditions

  • Main T&Cs
  • Standard form
  • Standard conditions of sale/commercial property conditions

Special conditions (NOT dealt with in standard conditions)

  • Tailored to deal
  • Amended
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7
Q

What are the rules for Buyer’s deposit to Seller as security for Buyer’s performance?

A

If B does NOT perform + S suffers loss => S must prove loss + steps proven to mitigate loss

10% purchase price

Held by S’s solicitor as;

  • Stakeholder > Must NOT release deposit to S (unless other party consents) + Use deposit in related purchase only
  • Agent > Can release deposit to S + Use deposit in any way
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8
Q

What are the rules for insurance?

A

B should insure

Can amend

Double insurance

  • Standard conditions
  • Purchase price is reduced by payout
  • S can claim reduction from own policy
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9
Q

What issues may arise?

A

Adverse search results

Structural issues

Neighbour disputes

Planned public works

Flood risks

Mining works

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