Completion and Remedies - SGS 4

Question 1

What is Form TA13?

Answer 1

Completion Information and Undertakings Form.

Question 2

What steps does the Buyer’s solicitor have to carry out in preparation for completion?

Answer 2

1) Draft the transfer
2) Submit Form TA13
3) Obtain finance (from buyer itself or lender)
4) Submit pre-completion searches

Question 3

Whose solicitor drafts the transfer?

Answer 3

The buyer’s after exchange of contracts. It is sent to the seller’s solicitor for approval.

SCPC 7.3.2

Question 4

What form is used for a transfer of the whole of a registered title?

Answer 4

Form TR1

Question 5

Is the use of a TA13 required?

Answer 5

No, firms may have their own in-house forms.

Question 6

Name two pre-completion searches on registered land?

Answer 6

OS1 Form

Solvency search

Question 7

What is the ‘priority period’?

Answer 7

After an OS1 search, the searcher will have a 30 working day priority period over any other applications to register an entry in the register.

The application to purchase should be made in this period.

Question 8

What is a solvency search and why is it important?

Answer 8

Ensures that the company is solvent and is not subject to the rights of any liquidators or creditors.

Question 9

What steps does the seller’s solicitor have to carry out in preparation for completion?

Answer 9

1) Reply to the buyer’s TA13
2) Prepare a completion statement for the buyer’s solicitor
3) Request a redemption statement from the seller’s lender (if there is one)
4) Agree the form of Transfer and arrange for the seller to execute it.

Question 10

What is SCPC 7.3.1?

Answer 10

Requires the seller’s solicitor to reply to ‘written requisitions’ within 4 working days after receiving from the buyer’s solicitor.

Question 11

Who has to execute the transfer?

Answer 11

The seller must always execute.

If there is new covenants or indemnities being added to the transfer, the buyer must also execute.

Question 12

How is an instrument validly executes as a deed?

Answer 12

Signed in the presence of a witness.

Delivered as a deed.

Question 13

How can a company execute?

Answer 13

s44(1) and (2) state a company can execute with two authorised signatories or by a director with an independent witness.

MUST SAY EXECUTED AS A DEED IN THE TR1

Question 14

What four things should the buyer’s solicitor check before completion?

Answer 14

1) Completion information is satisfactory

2) The transfer is signed by the seller (and buyer if needed)

3) Mortgage documentation (the charge has been signed by the buyer)

4) That all necessary funds have been received from the buyer.
- Must be sent to solicitor via telegraphic transfer (bank transfer)

Question 15

When the seller’s solicitor confirms the receipt of the completion monies, what must they do?

Answer 15

Date the TR1 form and assemble:

1) The executed and dated TR1

2) The original title and other deeds related to the property.

3) The Seller’s solicitor’s undertakings (followed by DS1)

4) Originals of planning permissions/building regs/guarantees.

5) Receipts for payment of apportionments and receipts for any chattels purchased separately.

Question 16

What is a DS1 form?

Answer 16

Discharges the seller’s charge on the property. (Usually after the completion monies is sent so the seller can buy out their mortgage)

Question 17

How does the buyer’s solicitor register the charge if the property is bought with a mortgage?

Answer 17

s859A CA 2006

Must be registered in 21 days beginning with the day after the date of creation of the charge.

Form MR01 - £23 fee.

Question 18

What must the buyer pay after completion and by when?

Answer 18

Stamp duty land tax (SDLT) within 14 days of the ‘effective date’ (usually completion).

Question 19

What just the buyer’s solicitor do after completion under s4 and s27 of the LRA 2002?

Answer 19

Register the property at the Land Registry.

Question 20

What forms must be sent to the Land Registry in order to register the purchased property?

Answer 20

FORM AP1 - sent with copies of the following:

1) The Transfer (usually Form TR1)

2) The discharge of the seller’s charge (usually DS1)

3) The buyer’s charge (Debenture)

4) Registration certificate of the charge from Companies House.
+ a letter from solicitor confirming that the copy is a certified copy of the one registered at CH.

5) SDLT 5 acknowledgment. i’m

Question 21

What is the latest time a completion can take place by and what SCPC governs this?

Answer 21

2pm

SCPC 9.1.2

Question 22

How is compensation for delay calculated?

Answer 22

The contract rate above Barclays Bank base rate x The value of the property (less the deposit) / 365

(above) x the number of days of delay

Question 23

When can a party rescind?

Answer 23

Specific contractual provision

Implication of adverse effect on the business

After service of a notice to complete

Question 24

What is a notice to complete?

Answer 24

A notice to complete requires completion within 10 working days (excluding day of service) SCC 9.8.2

Question 25

What happens if the buyer fails to comply with a notice to complete?

Answer 25

The seller may rescind and:

1) Keep the deposit

2) Resell the property

3) Claim damages for breach at common law.

Question 26

What remedies are available at common law?

Answer 26

Damages - Hadley v Baxendale

Specific Performance

Misdescription - Claim under Misrepresentation Act 1967 - Derry v Peek (requires false statement made knowingly)