4. Drafting C and Exchange Flashcards
Statute governing format of contract
s.2 LP(MP)A
Way to describe property on C for unreel land
By ref to conveyance in epitome
7.6.5
SCPC on if S gave IC, B also gives
What happens to SCPCs if property is not standard rated
Remove ‘exclusive of VAT’ on front + incorporate Condition A1
What does B’s S check about mortgage
CLLS draft agreed to? Offer accepted by B?
Two examples of latent incumbrances
RCs and RoW
Framework for drafting additional special conditions
Who is to perform, what, and when
What issues does S’s S check prior to exchange (3)
Existing loan, enquiries + C, and deposit
How can you stop the operation of s.62 LPA
Tick pre-printed special condition
What SCPC applies if standard rated
2
What will always be a variation to Formula B
Payment of deposit by TT (unless already sent)
What is no title guarantee
No remedy against S
Way to describe property on c for reg land
Address
SCPC on if S gave IC, B also gives
7.6.5
S.62 LPA
All fixtures and objects benefitting the property automatically pass w/ the property
SCPC 8.1
Property is at risk of B from date of C
What must Ss both get from their client prior to exchange
Signature on C, obtain instructions on completion, get authority to exchange
Who must execute PD for partnerships
All partners
What must always be done to document exchange
An attendance note
What incumbrances are listed in 4.1.2 as binding B
Specified, discoverable, or impossible for S to know
What does S’s S check for deposit prior to exchange
Agreed amount, received in advance, and how does S hold the deposit?
What does S’s S check prior to exchange for existing loan
Gets provisional redemption figure
What does Formula B rely on
Undertakings
IB(11.5)
S is advised to keep records of when undertakings given and when discharged
How are SCPCs incorporated
Expressly
How can you change presumed full title guarantee
Pre-printed special condition
Format for regularisation certificate as condition
The Seller will provide the Buyer with a Regularisation Certificate for [X building] constructed in [year] on the Property from [X] District Council, on or before the Completion Date.
What must B’s S report to him prior to exchange
Terms of C + ensure acceptable
Why is CLLS sent in draft for approval prior to exchange?
To ensure money will be advanced on completion.
SCPC on B deemed to buy subject to all listed in that section
4.1.2
What does B’s S check about deposit
Amount agreed + cleared funds in client account
Three possible ways to exchange
Person, post and by phone
4.1.2 covers what
Encumbrances that B buys subject to
What does s.2 LP(MP)A require of the C
Writing, incorporating all agreed terms, and signed by/on behalf of all parties
When do both sides become legally bound
On exchange
What happens if Formula B is varied
Must be confirmed in writing in Conveyancer’s Box
Why is it an issue if B occupies prior to completion
B may lose incentive to complete
SCPC on presuming title guarantee to be full
7.6.2
Why must M not be mentioned as specified incumbrance on front page of C
Undoes 4.1.2(d), as then becomes specified under (a)
SCPC on time for completion presumed to be 2pm
9.1.2
What issues must B’s S check
All docs + searches done and satisfactory; all issues dealt w/
How do you deal w/ pre-printed special conditions when picking those that apply
Cross through the ones not used + renumber
When is a property standard rated
Built in last 3 years or S opted to tax
Format for non-owning occupiers as special condition
The Seller will provide on the Completion Date an original Declaration of Waiver (in the form attached to this contract) signed by [X] and dated at the date of this contract.
What two kinds of encumbrances must S disclose
Latent and defects in title
What must B’s S check for the contract prior to exchange
Signed most recent agreed version?
What can happen if S fails to correctly describe the property on the contract
Can = MR + BoC under 10.1
Format for removal of part of property (e.g. fixture)
On or before The Completion Date, the Seller shall remove [x] currently located/affixed [location], provided the Seller makes good any damage caused to the reasonable satisfaction of the Buyer.
3.2.1 SCPC
Deposit presumed to be 10%
What is the deposit presumed to be + per what
10%, 3.2.1
O(11.2)
S must comply w/ undertakings within agreed or reasonable time
Property is at risk of B from date of C
SCPC 8.1
When is actual indemnity covenant given
In Purchase Deed
Three financial agreements B’s S should check prior to exchange
Deposit, mortgage and draft financial statement for B
What happens to formatting of removal of part of property if subject to LB consent
Put ‘provided the Seller receives LB consent from X DC…’
What contents automatically pass w/ the property per s.62 LPA
All fixtures and objects benefitting the property
SCPC on B buys free of mortgage
4.1.2(d)
Procedure for exchange
S confirms holding signed C + BS confirms deposit; completion dated agreed + written; exchange agreed; C dated + undertakings given
How can you vary deposit presumed to be 10% under 3.2.1
By special condition
7.6.2
Title guarantee presumed to be full
Format for repair of property (for breach of PC)
Prior to the Completion Date, the Seller shall put [the fence on the boundary of the Property] into a good state of repair in accordance with covenant [x] of the Schedule of covenants contained in the Charges Register of Title Number [x]
9.1.2
Time for completion presumed to be 2pm
What DoC does S have from exchange, towards the property
Reasonable care, NOT to insure
What do Ss need to report to client post-exchange
Inform them of exchange, completion date, financial issues and provide for signing TR1
How do you change time for completion
Special condition
What encumbrances need S NOT disclose
Any listed in 4.1.2
What is limited title guarantee
No 3rd party rights since last sale
What must solicitor do if S accepting reduced deposit
Explain consequences
How does S usually hold B’s deposit
As stakeholder per 3.2.2
S must comply w/ undertakings within agreed or reasonable time
O(11.2)
Wording of IC
“The Transferee covenants with the Transferor to observe and perform the covenants contained or referred to in entry [X] of the Charges Register of title number [X] and to indemnify the Transferor against any liability for any future breach or non-observance of those covenants.”
How MIGHT Formula B be varied (2)
Stating deposit already received and/or including undertaking to send C on another day
What if TiC wants to give full, but 2T only giving limited?
Use special condition
How are specified incumbrances referenced on contract
‘SI: the matters set out at item [x] of the Charges Register of title number [XXXXX]’
How do you avoid issue of B losing incentive to complete, by occupying prior to completion
B only occupies as licensee w/ special conditions in contract on e.g. hours of access
Who can sign on exchange of Cs (other than individual)
Authorised 3rd, S, or officer/P of company/Partnership
When would you not tick pre-printed special condition, even if wanted to stop operation of s.62
If using special condition instead
What docs/instructions must S’s S check prior to exchange
Contract and completion date
Who drafts contract and how
S’s S, using Heads of Terms
What to do on special conditions if lessor staying in occupation after sale of freehold
Give details of lease, including ‘occupying pursuant to lease dated [X]’
When is wording of indemnity covenant agreed
Contract
S is advised to keep records of when undertakings given and when discharged
IB(11.5)
What procedure for exchange by phone
Formula B
What documents/instructions must B’s S check prior to exchange
Contract and completion date
What is the guarantee w/ full guarantee
Right to sell + free from 3rd party rights other than those disclosed or impossible
What must person in actual occupation sign
Declaration of Waiver and promise to vacate on or before Completion Date
What Special Condition will always be checked - one or the other
4 - vacant possession or subject to lease
If selling subject to lease in favour of Michael Wood, granted 11th January 2018 for a term of 10 years, what would you write in SCPC SC 4
lease to Michael Wood (occupying pursuant to a 10-year lease dated 11 January 2018)
What is the only possible Condition under Section 9 of the SCPCs which might be checked
Condition A1 - not a taxable supply
Three examples of things that may be a condition on a contract
Obtain Regularisation certificate, obtain retrospective planning permission, obtain restrictive covenant insurance
What to say about undertakings at exchange
They are personally binding and note O(11.2) and IB(11.5)
