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Property Practice > Chapter 11: Post-Completion (Stage 6) > Flashcards

Chapter 11: Post-Completion (Stage 6) Flashcards

1
Q

What must the seller’s solicitor do post completion?

A
  1. Report to client
  2. Discharge mortgage(s) if any
  3. Pay estate agent (if any)
  4. File closure
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2
Q

What must the seller’s solicitor report to the client post completion?

A

The seller’s solicitor must call the client to confirm completion has taken place, followed by written confirmation.

The seller’s solicitor will also remind the seller to cancel their buildings insurance

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3
Q

What must the seller’s solicitor do if the property being sold is subject to a mortgage?

A

The seller’s solicitor must transfer sufficient funds to the lender, in accordance with the mortgage redemption statement, to redeem the mortgage.

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4
Q

How will the seller’s solicitor discharge any mortgage(s)?

A

The seller’s solicitor must discharge any mortgage(s), using the appropriate HMLR form or method depending on the type of charge and depending on the lender’s instructions.

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5
Q

What should the seller’s solicitor do re mortgage if the land is unregistered?

A

If the property being sold is unregistered, the original mortgage deed should be sent to the lender, for them to acknowledge receipt of the redemption payment.

The mortgage deed will then be sent back to the seller’s solicitor, who should then send the mortgage deed to the buyer’s solicitor to comply with their undertaking to redeem the mortgage.

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6
Q

What must the seller’s solicitor do re the estate agent (if any)?

A

The seller must approve the estate agent’s bill, which the seller’s solicitor will usually pay out of the net sale proceeds on completion.

This sum will usually appear on the completion statement.

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7
Q

How will the seller’s solicitor close the file?

A

The seller’s solicitor will follow their firm’s procedures on file closure.

The bill for the legal fees is usually rendered on the day of completion + the solicitor is likely to have the funds in hand as they will have been included on the completion statement.

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8
Q

What will the buyer’s solicitor do post-completion for freehold?

A
  1. Report to client
  2. Registration of company charge( if any)
  3. Payment of SDLT
  4. Registration at HMLR
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9
Q

What will the buyer’s solicitor do post-completion if it is for a new lease?

A
  1. Register lease for term of over 7 years
  2. Apply for share in management company
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10
Q

How will the buyer’s solicitor report to the client post completion?

A

The buyer’s solicitor will call the client to inform the buyer of completion, followed by a written letter of completion, and will send a bill for their own legal fees.

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10
Q

What will the buyer’s solicitor do post-completion if acting in an assignment of existing lease?

A
  1. The seller’s solicitor will send the buyer’s solicitor the original lease + original share certificate (if applicable) and the original licence to assign (if applicable)
  2. The buyer’s solicitor will arrange for payment of SDLT,
  3. The buyer’s solicitor will serve notice to the landlord of the assignment to the buyer (and notice of any new mortgage created),
  4. The seller’s solicitor will prepare the final service charge adjustment (if retention has been agreed), and
  5. The buyer’s solicitor will arrange for registration at HMLR of the transfer of the lease + any new mortgages.
  6. If the seller holds a share in the property’s management company, the seller will provide a signed stock transfer form to transfer their share in that company to the buyer
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11
Q

What will the buyer’s solicitor do if the buyer is a company post completion?

A

If the buyer is a company, the buyer’s solicitor must register any company charge at the Companies Registry within 21 days.

This is a strict deadline.

If it is missed, a court order is needed to register the charge.

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12
Q

When will the buyer’s solicitor need to deal with stamp duty land tax?

A

Stamp Duty Land Tax may be payable when a freehold property is purchased or a new or existing leasehold is bought.

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13
Q

What registration requirements must the buyer’s solicitor sort post completion?

A

The buyer’s solicitor must register the title within the 30-working-day period for registered land or the 2-month period for unregistered land.

There are appropriate forms + lists of documents required for each method.

Once registration is complete, HMLR will make available for download and/or send the buyer’s solicitor official copies of title register + title plan (if the plan has been changed or it is a first registration.

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14
Q

What is the effect of first registration?

A

If the registration was a first registration, the unregistered title deeds no longer have any legal significance once the registration is completed + are then known as the ‘pre-registration deeds’

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15
Q

What registration requirements must the buyer’s solicitor comply with for post completion of a new lease?

A

If the lease is granted for a term of over 7 years, the buyer’s solicitor applies to register the lease at HMLR to create a new title for that lease.

If the property has been leased with a mortgage, the new mortgage will be registered at the same time + the tenant’s solicitor must serve notice of mortgage on the landlord after completion.

16
Q

When will the buyer’s solicitor apply for a share in the management company following completion of a new lease?

A

If the leasehold property is located in a block to be managed by a management company, the buyer may need to apply for a share in the management company.

17
Q

What might need to be done re the management company following completion of an assignment of an existing lease?

A

If the seller holds a share in the property’s management company, the seller will provide a signed stock transfer form to transfer their share in that company to the buyer

18
Q

What will be included in the pre-contract package for freehold transactions?

A
  1. Draft contract,
  2. Property Information Form,
  3. Official copies of title register (if registered), or epitome of title (if unregistered).
19
Q

What will be included in the pre-contract package for leasehold transactions?

A
  1. Draft contract,
  2. Property Information Form, and
  3. Official copies of title register (if registered) or epitome of title (if unregistered).

Plus:
4. Leasehold Property Information Form,
5. Copy of draft lease or existing lease,
6. Possibly a copy of any head lease or landlord’s title

20
Q

What searches will be carried out in a freehold transaction?

A
  1. Local search,
  2. Drainage,
  3. Environmental,
  4. Commons registration,
  5. Chancel repair
21
Q

What searches will be carried out for a leasehold transaction?

A
  1. Local search,
  2. Drainage,
  3. Environmental,
  4. Commons registration,
  5. Chancel repair,
  6. If landlord is a company, carry out a company search
22
Q

What enquiries will be made in a freehold transaction?

A

Standard form pre-contract enquiries about:
- boundaries,
- third party rights,
- disputes,
- notices, and so on.

Enquiries + review of seller’s title

23
Q

What enquiries will be made in a leasehold transaction?

A

As for freehold, plus:

  1. Leasehold enquiries regarding 3 years’ service charge accounts, rent, insurance
  2. Review of leasehold title,
  3. Review of landlord’s title
  4. Review of date of lease in relation to continuing liability for covenants
  5. Consider liability on assignment
24
Q

What draft contract is used in a freehold contract?

A

Usual form of Contract Incorporating Standard Conditions of Sale and any other special conditions

25
Q

What will the draft contract include for leasehold transactions?

A

As for freehold plus:

  1. Draft lease may be attached to the contract
  2. Relevant Standard Conditions are:
    - apportionments,
    - existing leases,
    - new leases
  3. Consent to assignment of lease PLUS:

i. buyer’s solicitor to review draft lease/existing lease to ensure covenants are acceptable and not too onerous,

ii. may need to review/prepare licence to assign

iii. stock transfer form if seller owns share of management company

26
Q

What mortgage considerations are there in a freehold transaction?

A
  1. Review mortgage offer,
  2. Review Lender’s Handbook, to ensure title and search results comply,
  3. Arrange for mortgage deed to be signed
  4. Submit Certificate of Title to lender
26
Q

What are the mortgage considerations in a leasehold transaction?

A

As for freehold plus:

  1. Check Lender’s Handbook terms regarding leases and clauses that are unacceptable.
  2. Check length of term of lease is adequate for lender
27
Q

What will be used for exchange in freehold transactions?

A

The Law Society’s Formulae for Exchange of Contracts

28
Q

What will be used for exchange in leasehold transactions?

A

As for freehold plus:
1. If a grant of a new lease, once exchanged, lease will be engrossed and issued for signature as original + counterpart

29
Q

What is done pre-completion in freehold transactions?

A
  1. Usual Land Charges Department and/or Land Registry priority searches
  2. Prepare transfer deed
  3. Check the Completion Information and Undertakings from
  4. Prepare completion statement
30
Q

What is done pre-completion in leasehold transaction?

A

As for freehold plus:

  1. Obtain landlord’s consent (if required)
  2. Ready engrossed lease ready for signature if granting new lease
  3. Prepare detailed completion statement including apportionments of rent service charge + any other sums due
31
Q

What happens at completion in a freehold transaction?

A
  1. Transfer or receive funds
  2. Date transfer deed
  3. Send or receive documents of title
32
Q

What happens at completion for leasehold transactions?

A

As for freehold plus:

  1. Complete licence to assign (if required)
  2. Complete and date lease + counterpart or assignment of existing lease
33
Q

What is done post completion in freehold transactions?

A
  1. Pay estate agents
  2. Submit SDLT return
  3. Register transfer and mortgage, if any, at HMLR
34
Q

What is done post completion in leasehold transactions?

A

As for freehold plus:

  1. Prepare notice of assignment to serve on landlord, if assignment of lease
  2. Prepare notice of charge to serve on landlord, if buyer has mortgage
  3. Send stock transfer form (if applicable) to landlord/management company to obtain new certificate for buyer

Property Practice (15 decks)

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