Completion Flashcards
What are the pre-completion tasks that the buyer’s solicitor needs to carry out before completion?
1) Pre completion searches OS1 (Land Registry Search)
2) Company Search against seller or search for bankruptcy if against an individual through central land charges department
3) Draft TR1 (Purchase Deed)
4) Ensure Funding is received from buyer and lender: send financial statement to buyer and CLLS certificate of title to lender
5) Send standard requisitions on title to seller’s solicitor
What is an OS1 search?
It is a search in the land registry regarding the title of the property.
Purpose of this search is to check whether any further entries have been made on the register of title to the property since the date of the official copies which were supplied at the beginning of the transaction (the ‘search from date’)
It also freezes the register for a period of 30 working days.
If the buyer completes and applies to register their name as the new owner during this priority period, no other interests can be lodged in priority to the buyer’s interest.
What is a TR1 form?
It is a purchase deed which must be drafted by buyer’s solicitor before completion.
A standard form TR1 is used for the transfer of both freehold and leasehold registered land (where the land being transferred comprises the whole of the land in the registered title).
If only sale of part TP1 is used and TR5 is used to transfer larger portfolios.
TR1’s also used for unregistered land.
What is a CLLS certificate?
It is the certificate of title to a property, which is used for a lender to determine whether they will want to provide a mortgage to a buyer.
What are standard requisitions?
Questions from buyer’s solicitor to seller’s solicitor dealing with straight forward matters like where keys are, bank details of the seller’s solicitor firm, etc. before completion.
May also deal with questions about whether the seller’s solicitor is prepared to undertake to discharge the seller’s registered financial charges.
When would a seller be prepared to undertake a discharge to the seller’s registered financial charges?
Once he has received the redemption statement from seller’s lender to be sure sale of proceeds will be sufficient to discharge the seller’s mortgage.
Why is a company search necessary?
To check seller is not insolvent and still exists.
Which additional pre completion search would be carried out if you were acting for a buyer of residential property, where the buyer was taking out a mortgage?
a bankruptcy search against the buyer- company search if the buyer is a corporate entity.
What are the post completion matters to be carried out by the buyer’s solicitor after the purchase of a registered freehold property?
Register new charge if buyer is a company using MR01 to companies house within 21 days beginning with the day after the day on which the charge is created
Pay SDLT and File Land Transaction Return using SDLT1 to HMRC within 30 days of completion
Register:
- discharge of seller’s old charge
- the transfer
- the buyer’s new charge
Using AP1 to the land registry within priority period of OS1 search (ie. within 30 working days from date of search result)
What does the seller’s solicitor of unregistered land need to give to the buyer’s solicitor to investigate title?
Title deeds
What does the enforceability of any third party rights burdening the property of unregistered land depend on?
It depends on whether the third party rights were registered at the Central Land Charges Department against the owner of the property at the time of creation.
Therefore buyer’s solicitor needs to ensure that searches were carried out against all previous known owners of the land for the period of their ownership.
What form must the buyer’s solicitor send to the Central Land Charges Department to determine whether there are any third party rights burdening the land?
K15 form to the Central Land Charges Department. It gives protection period of 15 working days. It is necessary to complete the purchase within this period.
What is required from the buyer’s and seller’s solicitor in terms of finance?
Seller’s solicitor needs to send a completion statement to buyer’s solicitor to let him know the amount required to complete.
The buyer’s solicitor then needs to send a financial statement together with the bill for legal fees to the buyer.
The buyer’s solicitor will need to make sure that the lender received the certificate of title and ensure that the funds will arrive in good time for completion.
The buyer will need advance warning to send the required funds to the solicitor in time for completion. Many banks will require advance notice to allow buyer to withdraw money.
What are the pre-completion tasks that the seller’s solicitor needs to carry out before completion?
Agree to the purchase deed
Execute the purchase deed
Reply to requisitions on title
Finance
What must the seller’s solicitor do in terms of the purchase deed prior to completion?
The seller’s solicitor must amend, agree, and approve the purchase deed (generally a TR1 form) drafted by the buyer’s solicitor to ensure that the document accurately reflects the terms of the contract.
Once purchase deed is approved, the buyer’s solicitor will prepare an engrossed purchase deed.
What must the seller’s solicitor do in terms of executing the purchase deed prior to completion?
The seller’s solicitor must arrange for the engrossed purchase deed to be executed.
If it’s execution by individuals, they must sign the purchase deed in the presence of a witness who will also sign the deed, including the witnesses name and address.
If its an execution by companies:
1) common seal of the company to be affixed to the purchase deed in presence of officers (a secretary and director or two directors), who must sign and describe the office they hold within the company.
2) Officers of company (company secretary and director or two directors) who must sign and describe the office they hold within the company.
3) Single director signs in the presence of a witness who attests the signature by also signing the deed -including the director’s office, name and address of witness.
What must the Seller’s solicitor do with respect to the submitted requisitions on title before completion?
SCS 4.3.1 and SCPC 6.3.1 require seller’s solicitor to reply to requisitions within four working days after receiving them
What must the seller’s solicitor do in terms of finance before completion?
The seller’s solicitor must send a completion statement to buyer’s solicitor showing the amount which is due for completion.
He must also get the redemption figure from the bank - if seller in negative equity, then solicitor must ensure the seller has enough cash to redeem the mortgage when the property is sold.
The seller’s solicitor must send the seller his bill for his services.
Describe the steps involved with completion over telephone.
1) Preliminary check:
Buyer’s solicitor must ensure that account has enough funds from the lender and buyer.
Seller’s solicitor must ensure that it has signed the TR1 form (if registered land) and has obtained a redemption figure from the seller’s lender.
2) First phone call:
Seller’s solicitor confirms undertaking to redeem seller’s mortgage and provide a DS1
on receipt, which shows that the original seller’s mortgage has been discharged.
Buyer’s solicitor agrees to forward the completion funds.
3) Between first and second phone call:
Buyer’s solicitor instructs its accounts department to transfer completion funds to the seller’s solicitor.
Seller’s solicitor waits until seller’s solicitor’s accounts department notifies them of
receipt of funds.
4) Second phone call:
Buyer’s solicitor agrees to complete - i.e. release funds to seller and date any new
mortgage (if any)
Seller’s solicitor confirms receipt of funds and agrees to complete (i.e. DATE the TR1)
By what time must completion occur to be ‘on time’?
SCPC 8.1.2 provides for 2pm unless otherwise stated in contract.
How do you calculate the daily amount of compensation payable under the contract in the event of delayed completion?
If the contract rate is 4% per annum above the base rate and the base rate of Barclays Bank for ex. is 1%, then it will be 5% all together.
The interest is calculated on the balance of the purchase price minus any deposit already held by the seller.
Then to find out daily interest, you need to divide the amount of the .05% by 365 days. Rounded to two decimal points per day.
When does a notice to complete need to be served by?
It must be served at any time on the completion day. SCPC 8.8.1
When is a notice sent by fax deemed to arrive?
One hour later SCPC 1.3.7(d).
When is a notice sent by fax after 4pm deemed to arrive?
If it is sent after 4 pm it is deemed to arrive the next working day.
