1.2 Freehold Estates - Pre-Contract Search & Inquiry Flashcards
What is required for taking initial instructions from clients?
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
What searches should Buyer’s solicitor conduct?
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
What pre-contract enquiries should be made?
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
What information should be reported to the Client?
Replies to further enquiries
CPSE results
Search results
How is the contract made?
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
What is the structure of a contract?
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
What are the rules for Buyer’s deposit to Seller as security for Buyer’s performance?
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
What are the rules for insurance?
B should insure
Can amend
Double insurance
- Standard conditions
- Purchase price is reduced by payout
- S can claim reduction from own policy
What issues may arise?
Adverse search results
Structural issues
Neighbour disputes
Planned public works
Flood risks
Mining works