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Unit 12: Property Practice > 12.3 Preparing The Contract Of Sale > Flashcards

12.3 Preparing The Contract Of Sale Flashcards

1
Q

Sellers solicitor must obtain a copy of (in residential + commercial transactions)

A

The sellers client title to the property

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2
Q

To obtain the sellers client title in a registered property the solicitor will download

A

A copy of the register of title from the HMLR

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3
Q

To obtain a copy of the sellers client title in an unregistered property the sellers solicitor must locate

A

The original title deeds

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4
Q

Contract package

A

Standard forms that give practical information about the property to the buyer that is sent to the buyers solicitor

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5
Q

In a residential contract the solicitors will use a form of contract produced by

A

The Law Society

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6
Q

In a commercial contract the solicitors will use a form of contract produced by

A

The Law Society which incorporates the SCPC (Standard Commercial Property Conditions)

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7
Q

Three parts to a form of contract

A

Particulars of sale
Standard conditions
Special conditions

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8
Q

Particulars of sale

A

Front part of the contract
Drafted by the sellers solicitor
Contains the key information related to the contract

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9
Q

Standard conditions are the

A

Small print
Setting out the basic terms and the conditions related to the transaction

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10
Q

Special conditions

A

Conditions that are particular to that transaction

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11
Q

In a commercial contract the SCPC contains

A

Special conditions covering matters such as VAT, health and safety

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12
Q

VAT does not need to be added to a

A

Residential property

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13
Q

Sellers duty of disclosure is limited due to the

A

Doctrine of caveat emptor

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14
Q

Doctrine of caveat emptor means

A

Buyer must discover any defects in the property and cannot sue the seller if they are discovered after completion

Has been diluted in recent years due to the Consumer Protection Act

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15
Q

Patent defects

A

Physical defects
Seller is not obliged to disclose defects that are visible from a physical inspection of the property

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16
Q

Latent defects

A

Defects that are not visible from a physical inspection of the property
Seller is not obliged to disclose

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17
Q

Greatest danger for the seller lies in

A

Pre contract enquiries&raquo_space; being sued for misrepresentation by the buyer

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18
Q

Title guarantee

A

Promise imposed by statute that the buyer is entitled to sell the property
Solicitors are expected to make sure of this for their client (buyer)

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19
Q

Full title guarantee

A

The seller is selling the property free from all charges
They have the right to sell the property - full and equitable interest in the property

20
Q

Limited title guarantee

A

Given by a seller with less knowledge of the property ie. A personal representative

21
Q

Contract rate is a

A

Penalty rate of interest that applies in the event of late competition

22
Q

Contract rate is set at

A

By reference to their own bank
Anything above 4% or 5% should be amended by the buyers solicitor for being too high

23
Q

Potential fraud with chattels and fittings

A

Sum attributed should be the true market value of these items
Should not be overinflated to result the amount of SDLT/LTT payable

24
Q

SDLT means

A

Stamp land duty payable

25
Q

Deposit is typically set at

A

10% of the purchase price on the exchange of contracts

26
Q

Seller is entitled to keep the X if the buyer defaults

A

The deposit

27
Q

When the deposit is held by the sellers solicitor as a stakeholder

A

Better position for buyer
Sellers solicitor holds the deposit on behalf of the buyer and seller pending completion

28
Q

When the deposit is held by the sellers solicitor as a stakeholder

A

Better position for buyer
Sellers solicitor holds the deposit on behalf of the buyer and seller pending completion

29
Q

When the sellers solicitor holds the deposit as an agent

A

Risky for buyer - can be difficult to recover if the seller defaults on the sale
Can send the deposit to over to seller immediately after the exchange of contracts

30
Q

Risk and the exchange of contracts

A

Standard conditions state that between the exchange of contracts and completion, if the property is damaged the buyer is contractually obliged to proceed with the purchase

31
Q

A prudent buyer should be advised by their solicitor to have

A

Building insurance in place on the exchange of contracts
Note that the Standard conditions do not require the buyer to insure the property

32
Q

VAT IS NOT A CONCERN IN

A

Residential transactions

33
Q

Risk in the property passes under the exchange of contracts in the

A

Standard conditions

34
Q

Conditional contract is

A

More likely to be involved in a commercial transaction
Means that an important matter needs to be resolved and the contract will not be completed if it is not

35
Q

Additional documents to the contract package

A

Property information form
Fittings and contents form p

36
Q

Indicative redemption figure means

A

Paying off the mortgage

37
Q

An indicative redemption figure is relevant in

A

Where the seller has a mortgage over the property being sold

38
Q

Solicitor should ensure that the seller has

A

Title - full equitable and beneficial ownership of the property to sell it

39
Q

Sellers duty of disclosure is

A

Limited due to the principle of caveat
Patent - discoverable on inspection do not have to be disclosed
Latent - not discoverable - have to be disclosed

40
Q

Stamp land duty is only payable on

A

Money being paid for the land

41
Q

VAT is payable on

A

New commerical properties sold within 3 years of construction

42
Q

With other commercial property sold after three years of construction the seller has an option to

A

Impose VAT

43
Q

VAT is a problem when

A

A buyer who is not registered for VAT
VAT registered means they will be able to claim back

44
Q

If the title to a property is unregistered and in mortgage - how would a sellers solicitor obtain the sellers client title?

A

Deeds will be held by the lender and an undertaking must be given by the lender for release of the deeds

45
Q

If the title to a property is unregistered and in mortgage - how would a sellers solicitor obtain the sellers client title?

A

Deeds will be held by the lender and an undertaking must be given by the lender for release of the deeds

Unit 12: Property Practice (2 decks)

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