12.1 Introduction to Conveyancing

Question 1

Describe Stage 1 (pre-market) of the conveyancing process

Answer 1

The seller markets their property to find a buyer

Question 2

Describe Stage 2 (pre-contract) of the conveyancing process

Answer 2

The seller’s solicitor drafts the contracts and the buyer’s solicitor carries out the main part of the conveyancing work.

All searches and title investigation are carried out at this stage

Question 3

Describe Stage 3 (exchange of contracts) of conveyancing

Answer 3

Contract is agreed between seller and buyer and becomes legally binding.

Buyer will usually pay 10% of the purchase price as a deposit on exchange of contracts

Question 4

Describe Stage 4 (pre-completion) of conveyancing

Answer 4

The time between exchange of contracts and the completion date when the solicitors prepare for completion

Question 5

Describe Stage 5 (completion) of conveyancing

Answer 5

Completion Date. The date the seller moves out of the property they are selling and the buyer obtains the keys and moves in once the balance of purchase money is paid over

Question 6

Describe Stage 6 (post-completion) of conveyancing

Answer 6

Time after completion - the buyer’s solicitor will pay any SDLT and will register the client’s title at HMLR

Question 7

What is an estate contract?

Answer 7

Document creating the agreement between the parties for the sale and purchase of the property at the agreed price on the agreed date (completion date)

Question 8

What is a transfer of property?

Answer 8

Document that transfers the legal title of the property from the seller to the buyer on the completion date in return for payment of the 90% balance of the purchase price.

Question 9

Describe the term ‘Caveat Emptor’

Answer 9

“Let the buyer beware”. A buyer has a duty to look for issues with that property, may not have any remedy in respect of obvious defects that they did not bother to inspect.

Question 10

What is privity of contract?

Answer 10

The principle that stops someone who is not a party to a contract from enforcing a term of that contract. Creates a relationship between the parties to the contract.

Question 11

What is privity of estate?

Answer 11

The legal relationship that exists between parties who hold an interest in the same land for the time that they hold that interest.

Question 12

What is the Memorandum of Sale?

Answer 12

Prepared by the estate agent - contains details of the seller, buyer and their respective solicitors which will be circulated among the parties.

Question 13

What is a ‘synchronised transaction’?

Answer 13

Homeowners moving from the house that they are selling into the house they are buying on the same day.

Question 14

Describe the following leasehold transaction:

Landlord is the seller and incoming tenant is the buyer. Landlord will own the freehold of the property and will create a leasehold interest that will run concurrently with the freehold.

Answer 14

Grant of a new lease

Question 15

Describe the following leasehold transaction:

Existing lease is being sold. Lease is in existence, outgoing tenant is the seller and incoming tenant is the buyer who will acquire the remainder (residue) of the lease term.

Answer 15

Assignment of a lease

Question 16

What can you not do with an assignment of a lease?

Answer 16

It is not possible to change the terms of the lease without a deed or variation.

Question 17

What is an undertaking?

Answer 17

A professionally binding promise. If the recipient places reliance on the undertaking and it is breached, this is a matter of professional conduct.

Question 18

Describe an important undertaking made by the seller’s solicitor in a conveyancing transaction

Answer 18

Seller’s solicitor will make an undertaking to redeem (pay off) their clients’ mortgage out of the sale proceeds on completion of sale.

Question 19

What are the three types of conflicts of interest that can arise in conveyancing?

Answer 19

1. Non-owning occupier that does not appear on the legal title
2. Gifted deposit
3. Contribution to purchase price in unequal shares.

Solicitor should not act for the third party.

Question 20

List the standard conveyancing documents that have been introduced by the Law Society Conveyancing Protocol

Answer 20

1. Contract incorporating the Standard Conditions
2. Property Information Form - completed by the seller, gives buyer practical information about the property
3. Fitting and Contents Form
4. Leasehold Information Form
5. Completion Information and Undertakings Form