Completion Flashcards
What is the TR1 Form?
Used for the transfer of both freehold and leasehold land where the WHOLE of the land is being sold.
Section 52 Law of Property Act 1925 (‘LPA 1925’) confirms that the Transfer
must be in the form of a deed in order to transfer the legal estate in land to the
buyer.
What is a completion and undertaking form?
Sent to the buyers solicitor from the seller’s solicitor to obtain practical information about completion to ensure it runs smoothly.
The form will also make a request for:
- an undertaking from the sellers solicitor that any outstanding mortgages will be redeemed (therefore discharged) before completion
- a completion statement from the seller that sets out the balance of funds required to complete
- details of the seller’s solicitorrs bank account
- info on how to obtain keys to property
In a TR1 form, if a second trustee needs to be appointed because the sale is by a surviving tenant in common, what wording should be included n Panel 11 of the TR1 Form ?
‘For the purpose of giving a valid receipt for the purchase price, [NAME OF SOLE PROPRIETOR] (‘Current Trustee’) in exercise of the power
under section 36(6) of the Trustee Act 1925 appoints [NAME OF ADDITIONAL TRUSTEE] to be a trustee of the Property with the Current Trustee.’
Finance (Buyer)
Buyres solicitor will send the buyer a final financial statement outlining what the buyer must pay in order for completion to go ahead.
It will comprise the sale price of the property plus the price of any chattels minus the deposit paid exchange plus or less any ‘apportionments’. Apportionments are items to be added ordeducted (exchange
What pre-completion searches is the buyer required to carry out for registered land?
- Land Registry “Priority” Search USING Form OS1
Has two purposes:
a. This ensures that no further entries have been made on the register since they were supplied to the buyers solicitor at the beginning of the transaction.
B. The search also provides the buyer a 30 working day “priority period”; the buyer will take priority over any new entries placed on the register during this time. The priority will be lost if the buyer does not register the purchase within those 30 working dyas however .
- Solvency searches on the seller - If the buyer is a company.This is done at Companies House
- Solvency search on the buyer - where the buyers solicitor is also acting for the bank/lender providing the buyer’s mortgage. The search is for the benefit of the bank
A. If the buyer is a company, a company search is carried out at Companies House to check solvency of the buyer and establish that the buyer is still in existence.
b. Where the buyer is an individual, a bankruptcy search is carried out on a Form K16. A K16 form is sent to the Central Land Charges CLC Department to carry out a solvency search on individual buyers. Al
What pre-completion searches is the buyer required to carry out for UNregistered land?
- K15 Search to the Central Land Charges Department to ensure there are no new or unexpected third party rights burdening the property. The K15 search also gives the buyer a 15 working day protection period where the buyer will take priority over any new entires placed.
- Solvency search on the seller . This is only done If the buyer is a company. This is done at Companies House.
- Solvency search on the buyer - This is done Where the buyers solicitor is also acting for the bank/lender providing the buyer’s mortgage. The search is for the benefit of the bank
A. If the buyer is a company, a company search is carried out at Companies House
b. Where the buyer is an individual, a bankruptcy search is carried out on a Form K16. A K16 form is sent to the Central Land Charges CLC Department to carry out a solvency search on individual buyers.
What pre-completion steps does the buyer have to take?
- Prepare the Purchase Deed TR1 Form
- Complete information and undertaking form
- Obtain finances - send the buyer a financial statement outlining what buyer must pay for completion to go on
- Submit pre-completion searches
What pre-completion steps does the seller have to take?
- Reply to the buyer’s completion information and undertakings form
- SCPC 7.3.1 requires the sellers solicitor to reply to the completion information and undertaking form sent to them within 4 working days of receiving it. - prepare a completion statement for the buyer’s solicitor and request aredemption statement from the seller’s lender(s) (if any);
a completion statement (usually only necessary
where more than just the balance of the purchase price is payable) is sent by
the seller’s solicitor to the buyer’s solicitor showing the total amount due from
the buyer on completion and how this sum is calculated.
- agree the form of Transfer and arrange for it to be executed by the seller
Approve or make any necessary amendments to the buyers draft of the transfer form. once approved, the buyers solicitor will prepare an engrossed form TR1 which is the purchase deed in final form
EXECUTION THE TRANSFER
Solicitors arrange for the engrossed TR1 to be executed by the clients.
The seller must ALWAYS EXECUTE IT.
The Buyer must execute the form if :
- the buyer is entering into new restrictive or positive covenants;
- giving the seller an indemnity covenant
- a trust is declared (i.e. where joint purchasers declare that they are holding the property as tenants in common); or
a second trustee is being appointed
