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SQE1 - Property Practice > 3. Completion (Stage 5); Post-Completition (Stage 6); Remedies for Delay; and Commercial Security of Tenure > Flashcards

3. Completion (Stage 5); Post-Completition (Stage 6); Remedies for Delay; and Commercial Security of Tenure Flashcards

1
Q

Stage 5 (Completion):

What are the three methods by which completion can take place, and what should these not be confused with?

A
  1. Personal attendance
  2. Agent
  3. Post (most common)

Not to be confused with the three Ps by which exchange can occur: person, post, phone.

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2
Q

What does merger on completion mean and what does it mean for the buyer?

A

On completion, the contract merges with the purchase deed, meaning the buyer can no longer sue on contract terms (unless the contract provides it will not merge on completion)

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3
Q

On to Stage 6 (Post-Completion):

Within what time of completion must the buyer’s solicitor send the Stamp Duty Land Tax Form and pay tax?

A

Within 14 days of completion, even if no tax is payable

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4
Q

Within what timemust buyer’s solicitor register the title for (1) registered and (2) unregistered property?

A

Registered: Within 30 days of the official search
Unregistered: Within two months of completion

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5
Q

What is the effect of first registration on the title deeds?

A

They no longer have legal effect

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6
Q

Finished with the stages, and on to Delayed Completion and Remedies:

What is the only circumstance where delay will give the innocent party the right to cancel the contract outright?

A

Only where time was of the essence

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7
Q

Under the Standard Conditions, what is required for time to be of the essence in a residential context?

A

It must be specified in the contract

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8
Q

Even if time is not of the essence, what does any delay in completion, however minimal, give rise to?

A

Damages in the form of an interest penalty

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9
Q

What is the interest penalty calculated on?

A

The proceeds outstanding, i.e. purchase price minus deposit

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10
Q

As long as they notify the delaying party, what other option is available to an innocent buyer where there is a tenant in situ in the property?

A

They can elect to take the rental income instead of the interest

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11
Q

Where completion is delayed and time is not of the essence, what must the innocent party serve on the breaching party if they want to set the ball in motion toward being able to cancel the contract, and what is the effect of this?

A

A notice to complete, which makes time of the essence

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12
Q

From what point can a notice to complete be served, and what three things must be true of the party serving?

A

Any time after completion was due but not after it has taken place, and innocent party must be ready, able, and willing to complete

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13
Q

What trap should we look out for on the exam regarding a notice to complete?

A

The innocent party trying to serve a notice to complete in order to cancel the contract in a situation where completion has occurred, albeit late. A notice to complete can only be served if completion has not yet occurred.

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14
Q

After service of a notice to complete, how long does the delaying party have to complete?

A

Ten days

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15
Q

Upon receiving a notice to complete, what must the buyer do if they have negotiated and paid a deposit lower than 10% to the seller?

A

Advance enough funds such that 10% of the purchase price has been paid over

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16
Q

What are the seller’s options when the buyer does not comply with a notice to complete?

A
  1. Rescind the contract
  2. Retain deposit
  3. Claim damages
  4. Resell property
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17
Q

What are the buyer’s options when the seller does not comply with a notice to complete?

A
  1. Rescind the contract
  2. Reclaim deposit with interest at the contract rate
  3. Claim damages
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18
Q

What remedies are available for other pre-completion breaches, depending on the breach?

A
  1. Specific performance
  2. Damages
  3. Rescission
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19
Q

Pre-completion, where a seller is claiming damages from a buyer, what is the limit on what can be claimed, and what is the effect of this?

A

Difference in value between contract price and value on resale, so if the resale value is higher, a claim for damages against the original buyer will not be available

20
Q

Under the Standard Conditions, in what two situations is rescission available pre-completion?

A
  1. Misrepresentation because of an error or omission
  2. Landlord’s consent to assignment is not forthcoming
21
Q

One of what two conditions must be met to rescind a contract for misrepresentation under the Standard Conditions pre-completion?

A
  1. Element of fraud or recklessness, or
  2. Property is substantially different from what the innocent party expected to take, to their detriment
22
Q

What is misdescription?

A

An error in the property particulars of the contract, e.g. the estate held, or the size of the property

23
Q

What must be true of the misdescription to allow damages or rescission pre-completion?

A

It must be significant

24
Q

Finished with Delayed Completion and Remedies, and on to Security of Tenure for Commercial Tenants:

What is the statutory protection given to commercial tenants under the Landlord and Tenant Act 1954?

A

Tenant does not have to vacate their property at the end of a contractual lease, unless the landlord uses one of the statutory methods of terminating the lease

25
Q

What are the four ways a tenancy protected by the 1954 Act can be terminated?

A
  1. Forfeiture by the landlord
  2. Surrender by both parties
  3. Landlord serves a valid section 25 notice (to terminate lease or suggest new lease), or
  4. Tenant serves a valid section 26 notice (to request a new lease)
26
Q

What are three types of tenancy to which the 1954 Act does not apply?

A
  1. Fixed term tenancy not exceeding six months
  2. Employee in property of employer
  3. Contracted out tenancy
27
Q

What are the three statutory requirements for a landlord to contract out of the 1954 Act?

A
  1. Health warning from landlord
  2. Declaration from tenant
  3. Reference in the lease
28
Q

If the landlord wishes to contract out of the 1954 Act, how long before the tenant completes the lease should the health warning explaining what security of tenure is, that the tenant will be giving up these rights, and that they should seek professional advice be sent?

A

14 days

29
Q

What is required for the tenant to waive the 14 day period?

A

Tenant signs a formal statutory declaration in front of an independent solicitor waiving the period

30
Q

Regarding the tenant’s declaration in response to the health warning (not the one waiving the 14 day period), what two things must it confirm?

A

Tenant confirms they:

  1. Have received the health warning
  2. Agree to contracting out and to the consequences
31
Q

Does the tenant’s declaration in response to the health warning (not the one waiving the 14 day period) need to be signed in front of a solicitor?

A

No

32
Q

What three things must the reference in the lease contain?

A

Reference to:

  1. Health warning
  2. Tenant’s declaration and/or statutory declaration
  3. The agreement to contract out
33
Q

What is a section 25 notice, and when must it be served?

A

A notice sent by the landlord informing the tenant that they require the premises back at the end of the term, or that they wish to enter into a new lease with the tenant, served between six and twelve months before they wish the tenancy to end

34
Q

What are the seven statutory grounds (three of which concern tenant fault and four of which do not), one of which must be contained in a section 25 notice?

A

Discretionary:
Tenant fault:

  • Failure to repair
  • Persistent delay in paying rent
  • Substantial breaches of other obligations

No tenant fault:

  • Landlord requires whole premises (if tenant only rents part)

Not discretionary:

  • Has suitable alternative premises for the tenant
  • Intends to demolish or reconstruct premises which cannot be done with tenant in occupation
  • Intends to occupy premises himself
35
Q

Which grounds are discretionary, meaning even where they are advanced and proved, the court can still order a new tenancy?

A

All three where the tenant is at fault, and the one concerning the landlord needing the whole of the property where the tenant only rents part

36
Q

Which grounds are mandatory, meaning once advanced, the court cannot interfere, and what are these also known as?

A

Alternative premises, demolish/reconstruct, intent to occupy.

Also known as no-fault grounds.

37
Q

What is a section 26 notice, and when must it be served?

A

A notice sent by the tenant requesting a new lease, served between six and twelve months before they wish the new tenancy to begin

38
Q

After receiving this notice, how long does the landlord have to inform the tenant if they intend to oppose the request?

A

Two months

39
Q

What must a landlord do in response to a section 26 notice if they are unwilling to agree to a new lease?

A

Justify their refusal by reference to one of the seven statutory grounds they would be able to use for their own section 25 notice

40
Q

What is a tenant entitled to if a landlord quits the lease using a no-fault ground?

A

Compensation, on the basis that they have not done anything wrong

41
Q

Why is the tenant not entitled to compensation where there is alternative premises?

A

Because they will not have suffered any loss

42
Q

What determines how compensation is computed when a tenant is entitled upon to termination due to a no-fault ground?

A

Whether the tenant has been in occupation for 14 years or less

43
Q

How is compensation calculated when the tenant has been in occupation for less than 14 years?

A

The ratable value of the premises, i.e. one year’s rent

44
Q

How is compensation calculated when the tenant has been in occupation for at least 14 years, or took over the business from someone and their combined tenancy is at least 14 years?

A

Twice the ratable value of the premises

45
Q

In a section 25 or 26 situation, what is the maximum length a court will order the new lease to be where the lease itself is silent as to term?

A

15 years

SQE1 - Property Practice (3 decks)

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