7. Legal Aspects Of Property Purchase

Question 1

What is a licenced surveyor?

Answer 1

Alternative to a solictor. Qualified in conveyancing only, but not other legal matters

Question 2

Are legal fees refundable?

Answer 2

Solicitor’s own fees may be partly refundable if the sale doesn’t go through, but search fees are non-refundable.

Question 3

What is professional negligence?

Answer 3

Where a legal professional fails to rpovide a duty of care.

Question 4

What must a client prove to establish that professional negligence has taken place?

Answer 4

1. Duty of care has been owed and breached
2. Loss, damage or inconvenience has been caused as a result

Question 5

What is the Law Society? What is its role?

Answer 5

A professional body of sols. Provides strict standards & takes disciplinary action if these are not met

Question 6

Who does a solicitor’s professional indemnity insurance protect?

Answer 6

Their clients. It does not protect sols from financial repercussion from professional negligence.

Question 7

What is the document that is formed as a result of the investigations of title?

Answer 7

COT

Question 8

What 3 things does the COT need to establish?

Answer 8

1. Property is what it is claimed to be
2. Vendor has legal ability to sell
3. Property is free from restrictions which would inhibit the sale

Question 9

What can be done if a solictor’s searches find that the title is defective?

Answer 9

Insurance can be taken out against defective titles, either to protect the buyer, the lender or both

Question 10

What is a Puisine Mortgage? What does this mean for the lender?

Answer 10

When the lender lends against unregistered property and they do not possess the title deeds. As a reult, their rights would be the same as a second charge holder on unregistered land

Question 11

When are Land Registry Searches needed? What is included in the searches? (3)

Answer 11

Needed for registered property
1. Property Register
2. Proprietry Register
3. Charges Register

Question 12

When are Land Charges Registry Searches needed? What do they check for? (2)

Answer 12

Needed for unregistered property
1. Puisine Mortgages
2. Spousal interest

Question 13

What do the Local Land Charges Registry and local authority enquiries search for? (2) Which one of these is in the process of being moved to another register?

Answer 13

1. Obligations and restrictions - being moved to land registry since 2018
2. Town planning and road changes

Question 14

When are bankruptcy searches conducted? (2)

Answer 14

1. By lender against borrower
2. sometimes against vendor to see if they are legally able to receive the funds

Question 15

What is Commons registration used for?

Answer 15

To check for commonly owned property, e.g. village greens, land belonging to the lord of the manor, undeveloped countryside etc

Question 16

Which type of mortgage might solictor’s searches not be needed for? What happens instead?

Answer 16

Remortgages - lenders will sometimes allow the borrower’s solictors to arrange search indemnity insurance instead. This protects both the lender and borrower.

Question 17

Who is responsible for filling out the property information form? What information does it include?

Answer 17

The Vendor.

Provides info on what is included with the property, as well as utility services, disputes/sharing arrangements with neighbours, changes/planning, guarantees, fixtures and fittings etc

Question 18

What is the name for the contract between the lender and the borrower?

Answer 18

The mortgage deed

Question 19

What is the name of the contract exchanged between the buyer and vendor?

Answer 19

The sales contract

Question 20

What events occur simultaneously with the exchange of contracts? (4)

Answer 20

1. Deposit is paid
2. Completion date agreed
3. Settlement figures obtained (for outstanding mortgages)
4. Signing of the mortgage deed

Question 21

At what point does the buyer become the legal owner of the property and does the lender get a legal charge?

Answer 21

On completion

Question 22

How long does the buyer’s sol have to file a tax return for SDLT?

Answer 22

14 days from completion

Question 23

What are disbursements?

Answer 23

Expenses paid for by the solicitors on the buyer’s behalf, e.g. search fees, registration fees, stamp duty

Question 24

When does the buyer have to pay the solictor for fees and disbursements?

Answer 24

Post completion