Completion Flashcards
Buyer’s solicitor’s checklist before completion
- draft the transfer deed for the seller’s solicitor’s approval
- once approved by the seller’s solicitor arrange for the buyer to sign if it contains indemnity covenants (or any other obligation on the part of the buyer)
- send the requisitions on title to the seller’s solicitor
- carry out relevant pre-completion searches
- send certificate of title of lender and request the loan advance in time for completion
- send the buyer a statement of money needed to complete the purchase
- Stamp Duty Land Tax form approved by client
Seller’s solicitor’s checklist before completion
- approve transfer deed drafted by the buyer’s solicitor
- arrange for the transfer to be executed by the seller
- reply to requisition on title
- request a redemption statement from the seller’s lender (if any)
- in a residential sale, ask the seller or agent to take final meter readings
Who drafts the transfer deed?
Used to be seller’s solicitor drafted the contract and the buyer’s solicitor drafted the transfer deed.
This is still the default position taken in the SCS and SCPC
But recently it is common for seller’s solicitor to draft both.
Form of the transfer
Must be a deed.
TR1 - most common this transfers the whole of a freehold or leasehold title
TP1 - used for a transfer of part of a registered title
TR5 - used for the transfer of a portfolio of registered titles (and can include unregistered titles)
Unregistered land - any deed but usual to use TR1
Sections of TR1
1: title number(s) of the property, in unregistered leave blank
2: Property - brief description (address)
3: Date - handwritten in ON COMPLETION
4: Transferor -names of sellers, if different from when bought it (eg marriage) certificate should be provided. Any trustees appointed, is company, registration number
5: Transferee for entry in register - buyer’s full names (max of four)
6: Transferee’s intended address - put address of the property being bought
7: transfer wording
- Consideration (1. money, nothing (gift), 3. other type of consideration (paying off debt, swapping houses))
- what type of title guarantee: full or limited (if not giving any leave blank)
- Declaration of trust
- additional provisions: eg indemnity covenant, appointment of second trustee for overreaching
- execution:
transferor must always execute tr1
transferee sometimes
When must the transferee also execute the TR1?
- If they are tenants in common or agree to hold the property on trust for someone else
- they are providing an indemnity covenant or any other obligation
How does an individual execute the transfer deed?
Individual signs in the presence of an independent witness who also signs and prints their full name and address
Transfer is considered delivered when it is dated.
How does a company execute the trust deed?
Different options for a company executing a trust deed (may have their own policies)
Options:
- Company seal attached and signed by two directors or one director and the company secretary
- no seal but signed by two directors or one director and the company secretary
- signed by one director and witnessed by an independent witness
- signed by a senior employee who is authorised under a power of attorney
Process for transfer deed
- Agreed by solicitors
- executed
- held by the relevant solicitor undated ready for completion
What are pre-completion searches concerned with?
(1) the property
(2) the parties
Mainly to check and protect the buyer’s (and lender’s) ability to obtain title to the property as per the contract.
What is a priority period?
The amount of time when registration will be protected by priority. This means that if the transfer is registered within the priority period conferred the buyer’s transfer will take place over any other applications.
Not running a search could lead to a negligence claim.
Priority period: Registered land
Search for priority against the title number. Updates official copies that were initially provided and identifies any changes that were made against the title number.
For whole of land: OS1
Part of land: OS2
Confer a priority period of 30 working days.
“search from” date - should be used from the date of the official copies already received.
Priority period: unregistered land
Form k15, land charges search of land charges registry.
Identifies any incumbrances or other adverse matters.
Priority period of 15 working days.
Only carried out against the seller.
Solvency searches
If acting for lender (or lender and buyer):
- carry out bankruptcy search against buyer K16 to protect lender, confers priority period of 15 working days
- if buyer is a company - company search to check no insolvency or crystallisation of a floating charge (no priority - so carried out late as possible or earlier and repeated)
Against seller:
- if individual just rely on OS1
- if company carry out company search to check no insolvency or crystallisation of a floating charge (no priority - so carried out late as possible or earlier and repeated)
Requisitions on title
Concern questions about title deeds that need answering before completion.
Residential: TA13 “completion information and undertakings”
Commercial: CPSE form SCR (Solicitor’s completion requirements)
Vacant possession - arrangements for keys, authority for any tenant to pay rent to buyer following completion
Deeds and documents - unregistered ask for list of deeds and documents to be sent on completion
Completion - confirmation will take place according to Law Society’s Code for completion by post
Money - ask for seller solicitor’s account detail and exact amount payable
Mortgages and charges - Ask the seller’s solicitor to list any mortgages secured on the property and confirm their undertaking to redeem them on completion
Seller’s solicitor’s undertaking to redeem mortgage
Seller’s solicitor will undertake in the Law Society Code for Completion by Post to redeem the mortgages against the property which it will have already notified to the buyer’s solicitor:
To undertake forthwith to pay the lender the money required to redeem the mortgage and to forward Form DS1 to the buyer’s solicitor as soon as the seller’s solicitor receives it from the lender.
NOT to discharge the charge - this is not within their power (bank’s job). Will be discharged after the loan is redeemed.
Lender will either discharge the charge at the Land Registry electronically or provide form DS1 which can be produced at the Land Registry to discharge the charge.
What is the Completion Information and Undertakings Form?
The Completion Information and Undertakings Form is sent by the buyer’s solicitor to the seller’s solicitor to obtain information about completion.
Form TA13 is one example of the Completion Information and Undertakings Form. Firms can use their own in house version.
The Completion Information and Undertakings Form is completed by the seller’s solicitor and signed by the seller’s solicitor. This is important as only a solicitor can give an enforceable undertaking and the Completion Information and Undertakings Form requests an undertaking in respect of the seller’s mortgage / charge
What are pre-completion requisitions on title?
They ask for key information regarding completion and deal with relevant undertakings required from the seller’s solicitor.
Whilst the pre-completion requisitions on title deal with undertakings they also ask for practical information regarding completion.
Requisitions on title are questions asked of the seller’s solicitor regarding practical information for completion and dealing with relevant undertakings required from the seller’s solicitor.
