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Property Practice (FLK2) > Completion > Flashcards

Completion Flashcards

1
Q

What Land Registry form is used for the transfer of the whole of a freehold/leasehold title?

A

Form TR1.

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2
Q

What Land Registry form is used for the transfer of only part of a registered title?

A

Form TP1.

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3
Q

What Land Registry form is used for the transfer of a portfolio of registered titles?

A

Form TR5.

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4
Q

Who usually drafts the transfer deed?

A

The buyer’s solicitor.

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5
Q

How does an individual execute the transfer deed?

A

An individual signs the transfer in the presence of an independent witness who also signs and prints their full name and address (s1(3)(a)(i), LPA MP 1989).

The transfer is considered delivered when it is dated, usually by the transferor’s solicitor.

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6
Q

What pre-completion search must be carried out before the purchase of registered land?

A

The buyer’s solicitor carries out an OS1 search with priority. This updates the official copies that were initially provided, and identifies any changes made.

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7
Q

What priority period does an OS1 search with priority confer?

A

It confers a priority period of 30 working days in favour of the person searching.

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8
Q

What pre-completion search must be carried out before the purchase of unregistered land?

A

The buyer’s solicitor carries out a land charges search of the Land Charges Registry (Form K15).

This identifies any incumbrances or other adverse matters registered against the owner/seller of the unregistered land.

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9
Q

What priority period does a land charges search confer?

A

It confers a priority period on the buyer of 15 working days.

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10
Q

When acting for buyer and lender, what search should the buyer’s solicitor carry out?

A

A bankruptcy search (Form K16) against the buyer to protect the lender.

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11
Q

If the buyer/seller is a company, what search should be carried out?

A

Both the lender and buyer’s solicitor will want a company search carried out to ensure there is no pending insolvency or crystallisation of a floating charge. There is no priority period.

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12
Q

What are requisitions on title?

A

Simple questions to elicit certain information that the buyer’s solicitor needs to complete.

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13
Q

What form is used for requisitions on title in residential/commercial transactions?

A

Law Society TA13-residential

CPSE form SCR (solicitor’s completion requirements)-commercial

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14
Q

What does the process of completion involve?

A

The balance of the purchase price being paid to the seller, and the legal title in the property being passed to the buyer.

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15
Q

How does the process of completion usually happen?

A

Completion now almost always happens by post, which is facilitated by the Law Society Code for Completion by Post.

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16
Q

What happens immediately following completion?

A

The seller’s solicitor holds the transfer deed and other deeds and documents to the buyer’s solicitor order-they can direct what happens to them.

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17
Q

When must the seller’s solicitor send the transfer deed and other deeds/documents to the buyer’s solicitor after completion?

A

No later than the end of the working day after completion.

18
Q

If the buyer is late in completing, what is the penalty?

A

The buyer pays interest on the purchase price less any deposit paid.

19
Q

If the seller is late in completing, what is the penalty?

A

The seller pays interest on the full purchase price.

20
Q

What is the Law Society interest rate?

A

4.1%

21
Q

Can a buyer also claim for common law damages if the seller fails to complete on time?

A

Yes, the buyer can also claim for common law damages for their losses. If the buyer is successful in a claim, the interest received under SCS is deducted from each sum.

22
Q

What effect does service of a notice to complete have on the defaulting party?

A

It has the effect of making time of the essence and the parties must then complete within 10 working days, the first day being the day after the notice it has been served.

23
Q

What must a buyer do in relation to the deposit if they have failed to complete on time?

A

If the buyer is the defaulting party, and they have not given a 10% deposit, they must make it up to 10% without delay.

24
Q

What remedies are available to a seller if a buyer fails to complete within the 10 working day period after service of a notice to complete?

A

-Rescind the contract

-Forfeit the deposit and any interest accrued on it

-Resell the property and any contents included

-Claim contractual damages

25
Q

What remedies are available to a buyer if a seller fails to complete within the 10 working day period after service of a notice to complete?

A

-Rescind the contract

-Demand return of the deposit with any interest accrued on it

-Claim contractual damages or even specific performance

26
Q

When must stamp duty land tax (SDLT) be paid in England?

A

Within 14 days after the effective date of the transaction.

27
Q

When must land transaction tax (LTT) be paid in Wales?

A

Within 30 days after the effective date of the transaction.

28
Q

When must charges created by companies be registered at Companies House?

A

Within a 21 day period of its creation, if not it is void against any administrators/liquidators.

29
Q

When must the Land Registry application for registered land be made and what form is used?

A

Must be made within 30 working days of the OS1 search to protect priority.

Form AP1 is used.

30
Q

When must the Land Registry application for unregistered land be made and what form is used?

A

Must be made within 2 months or the transaction is void.

Form FR1 is used.

31
Q

Outline the SDLT rates/brackets for residential transactions.

A

-Up to £250,000 – there is no SDLT payable

-Over £250,000-£925,000 – 5% payable

-Over £925,000-£1.5m – 10% payable

-Over £1.5m – 12% payable

32
Q

What is the first time buyer SDLT relief and what happens when it applies?

A

A discount (relief) is applicable for a first time buyer if the purchase price is no more than £625k.

If the relief applies, there is no SDLT for the first £425,000 of the purchase price and 5% on any part of the price over £425,000.

33
Q

What is the second property additional SDLT rate and how is it calculated?

A

If the buyer is buying a second property, then additional SDLT of 3% is charged on the whole of the purchase price.

You can calculate the SDLT that would be chargeable as usual, and then add 3% of the total purchase price.

34
Q

Outline the SDLT rates/brackets for non-residential transactions.

A

-Up to £150,000 – no SDLT payable

-Over £150,000-£250,000 – 2% payable

-Over £250,000 – 5% payable

35
Q

Is there relief for first-time buyers with LTT?

A

No, this does not apply to LTT in Wales.

36
Q

Outline the LTT rates/brackets for residential transactions.

A

-Up to £225,000, there is no LTT payable

-Above £225,000-£400,000 – 6% payable

-Above £400,000-£750,000 – 7.5% is payable

-Above £750,000 - £1.5m – 10% is payable

-Above £1.5m – 12% is payable

37
Q

Outline the LTT rates/brackets for non-residential transactions.

A

-Up to £225,000 – no LTT payable

-Above £225,000-£250,000 – 1% payable

-Over £250,000-£1m – 5% payable

-Over £1m – 6% payable

38
Q

What is capital gains tax (CGT)?

A

CGT is a tax on the profit when you sell or dispose of something that has increased in value.

39
Q

What elements need to be satisfied to give rise to CGT?

A

-There is a chargeable disposal

-Of a chargeable asset

-By a chargeable person

-Which gives rise to a chargeable gain

40
Q

What is Private Residence Relief?

A

This is a tax relief that applies so that a person does not pay CGT if they sell or dispose of their home.

41
Q

What conditions must be met for Private Residence Relief to apply?

A

-It has been the person’s main home for all the time they have lived in it

-They have not let it out

-It has not been used for business purposes

-The grounds are less than 5,000 square metres

-It was not bought just to make a gain

Property Practice (FLK2) (11 decks)

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