Completion

Question 1

What are the 2 steps for Completion to take place?

Answer 1

(1) Buyer’s solicitor send BALANCE of purchase price + release DEPOSIT to seller’s solicitor
(2) Once received, seller’s solicitor DATE TR1 + DATE MORTGAGE DEED

Question 2

Under the SC and SCPC, how should the funds on Completion be sent over?

Answer 2

By electronic bank transfer

Question 3

Under the SC and SCPC, if no completion date is set on exchange of contracts (rare), when will completion take place?

Answer 3

20 working days from EXCHANGE at 2pm

Question 4

Under the SC and SCPC, if completion takes place after 2pm on the same working day, when will it be deemed to take place?

Answer 4

Next WORKING day

Question 5

What is the effect of Completion on the Legal Title in:
(a) Registered Land
(b) Unregistered Land

Answer 5

(a) DOES NOT pass until Registration at HM Land Registry

(b) Passes at Completion and triggers Compulsory First Registration

Question 6

What are 2 key post-completion steps for the SELLER’s solicitor re any existing Mortgage?

Answer 6

(1) Redeem existing mortgage
(2) Forward DS1 form to buyer’s solicitor (evidence of mortgage discharge)

Question 7

What are the 4 key post-completion steps for the BUYER’s solicitor?

Answer 7

(1) REGISTERED - Register Transfer at HM Land Registry (AP1)

(2) UNREGISTERED - Compulsory first registration (FR1)

(3) Pay SDLT / LTT

(4) Register the mortgage

Question 8

In REGISTERED LAND, the transfer must be registered at HM Land Registry for legal title to pass. When must this be done by?

Answer 8

Land Registry Search (OS1/OS2) priority period - 30 working days from date of search

Question 9

In UNREGISTERED LAND, compulsory first registration must occur when the legal title transfers at completion.

(1) What is the effect of a failure to complete this?

(2) In what time period must this be done?

Answer 9

(1) Legal title pass back to the seller

(2) Within 2 MONTHS of completion

Question 10

When must the following be paid to HMRC following completion:
(1) SDLT
(2) LTT

Answer 10

(1) Within 14 days of completion
(2) Within 30 days of completion

Question 11

In REGISTERED LAND, following completion, what steps should the LENDER’S SOLICITOR take to register the buyer’s mortgage if the buyer is:
(a) Company (2 steps)?
(b) Individual (1 step)?

Answer 11

(a)
(i) Register charge at Companies House (within 21 days creation charge i.e. completion)
(ii) Register charge at HM Land Registry (within OS1/OS2 priority period)

(b) Register charge at HM Land Registry (within OS1/OS2 priority period)

Question 12

Under the SC and SCPC, if no completion date or time is specified, when will this be?

Answer 12

2pm 20 working days from date of EXCHANGE

Question 13

What are the 4 remedies for late completion?

Answer 13

(1) Contractual compensation
(2) Common law damages (breach of contract)
(3) Notice to complete
(4) Rescision / termination

Question 14

Is there an AUTOMATIC right to rescind / terminate the contract by a party in the case of late completion?

Answer 14

NO - a ‘notice to complete’ must be served first

Question 15

Which party can be made to pay ‘contractual compensation’ for late completion under:
(1) SCs
(2) SCPCs

Answer 15

(1) Buyer OR Seller
(2) ONLY Buyer

Question 16

What is the formula for calculating ‘contractual compensation’ under the SC and SCPC if defaulting party:
(a) Buyer
(b) Seller

Answer 16

(a) Contract rate x (Balance of purchase price - deposit)

(b) Contract rate x Balance of purchase price

Contract rate - in contract and if not SC/SCPC Barclays Base Rate + 4%

Question 17

Under SC and SCPC, can a party claim under both ‘contractual compensation’ and ‘common law damages’?

Answer 17

Yes BUT NO ‘double recovery’ - deducted from each other

Question 18

When is the earliest a ‘Notice to Complete’ can be served?

Answer 18

After contractual date / time of completion (e.g. after 2pm SC/SCPC)

Question 19

What is the effect of a Party serving a ‘Notice to Complete’?

Answer 19

Time becomes of the essence and completion must occur within 10 WORKING days

Question 20

If 10 working days has passed since the filing of a ‘Notice to Complete’, is the contract AUTOMATICALLY rescinded?

Answer 20

No - non-defaulting party choice RESCIND or not

Question 21

Under the SC and SCPC, If the non-defaulting party ‘Rescinds’ the contract, what happens to the DEPOSIT if defaulting party is the:
(a) Seller
(b) Buyer

Answer 21

(a) Pay deposit back to buyer
(b) Seller keeps deposit