Completion Flashcards
Pre-completion searches
OS1: search against title with priority of 30 working days
K15: land charges search against full name of the seller, 15 working days priority
K16: bankruptcy search against full name of the buyer (if acting for a lender as well), 15 working days priority
Company search: against company name of seller, no priority period
Form of transfer
Transfer of land must be in the form of a deed (usually TR1 is used)
Completion process
- Buyer’s solicitor traditionally drafts the transfer
- Seller executes the transfer when money arrives from the buyer’s solicitor
- Buyer sometimes can also execute the deed (e.g. indemnity covenant given to the seller to observe the positive covenants OR making a declaration of trust)
- Property and the money change hands
The Law Society Code for Completion by Post
The seller’s solicitor is treated as an agent for the buyer’s solicitor
As soon as possible, and no later than the end of the working day after completion, the seller’s solicitor undertakes to send the transfer deed and other deeds and documents to the buyer’s solicitor
Seller’s solicitor usually also undertakes to redeem the mortgage
Formalities of a deed
- Intended as a deed
- Delivered (done by dating)
- Validly executed (signed in the presence of an independent witness who must attest their signature)
Executing a transfer deed: company
Company seal attached, and signed by two directors, or one director and the company secretary
No company seal, but signed by two directors or one director and the company secretary
Signed by one company director and witnessed by an independent witness
Signed by a senior employee (not a director or the company secretary) who is authorised under a power of attorney
Post-completion: Stamp Duty Land Tax (England)
When should it be paid?
SDLT return must be submitted and tax paid within 14 days of completion to avoid penalties
Post-completion: Land Transaction Tax (Wales)
LTT return must be submitted and tax paid within 30 days of completion to avoid penalties
Post-completion: registration of charge at Companies House
Must be done within 21 days of the creation of the charge
Failure to register: charge will be void against any liquidator or administrator
Companies House have no discretion to extend the timeline, it will be necessary to apply for a court order to allow the filing out of time
Post-completion: Land Registry application form
Documents to send in addition:
The transfer deed, SDLT5 or WRA certificate that proves payment of tax, discharge of seller’s mortgages, certificate of registration at CH
Unregistered land: epitome of title and deeds referred to in it, land charges searches for the seller and previous owners in the chain of title
Both: buyer’s conveyancer should specify whether are are overriding interests or not
Capital Gains Tax: principal private dwelling exemption
Conditions:
- has been the person’s main home for all the time that they lived in it
- they have not let it out (other than taking a lodger)
- it has not been used for business purposes (using a room as a temporary office is ok)
- the grounds including all buildings are less than 5,000 square metres
- it was not bought just to make a gain
Married couples and civil partners can only treat one property as their main home between them (they can’t have one each)
Capital Gains Tax
If a taxpayer has made losses on assets during the tax year, they may offset that against gains made
A taxpayer is also entitled to annual exemption (£3,000)
