Completion MCQs Flashcards
A man is buying the whole of a registered freehold residential property with the aid of a mortgage. The buyer’s solicitor is also acting for the buyer’s lender. The seller is a company.
Which one of the following best describes the pre-completion searches which the buyer’s solicitor should carry out?
An OS2 against the property, a K16 against the buyer and a company search against the seller.
An OS1 against the property, a K16 against the buyer and a company search against the seller.
An OS1 against the property and a K16 against the buyer.
An OS2 against the property and a company search against the seller.
An OS1 against the property and a company search against the seller.
An OS1 against the property, a K16 against the buyer and a company search against the seller.
Correct. An OS1 is the relevant priority search for the whole of registered land (OS2 is for sale of part but this is a sale of whole). A K16 needs to be carried out against the buyer because this is the relevant solvency search against the buyer when the buyer is an individual and the buyer’s solicitor should carry it out as they are acting for the buyer’s lender. A company search needs to be carried out against the seller as this is the relevant solvency search when the seller is a company. As this search does not give a priority period it must be carried out at the pre-completion stage even if it was also carried out earlier in the transaction.
A company bought the whole of a registered freehold commercial property for £275,000.
Assume that the following rates applied at the date of completion:
0% on the first £150,000
2% on the next £100,000
5% on the next £250,000
Which one of the following best describes the post-completion steps in respect of Stamp Duty Land Tax (‘SDLT’) which the buyer’s solicitor should have carried out?
The buyer’s solicitor should have sent Form SDLT1 to HM Revenue and Customs within 14 days of the date of completion together with the sum of £3,250 in respect of the SDLT payable.
The buyer’s solicitor should have sent Form SDLT1 to HM Revenue and Customs within 14 days of the date of exchange together with the sum of £3,250 in respect of the SDLT payable.
The buyer’s solicitor should have sent Form SDLT1 to HM Revenue and Customs within 14 days of the date of completion together with the sum of £5,500 in respect of the SDLT payable.
The buyer’s solicitor should have sent Form SDLT5 to Her Majesty’s Revenue and Customs within 14 days of the date of completion together with the sum of £3,250 in respect of the SDLT payable.
The buyer’s solicitor should have sent Form SDLT1 to HM Revenue and Customs within 14 working days of the date of completion together with the sum of £3,250 in respect of the SDLT payable.
The buyer’s solicitor should have sent Form SDLT1 to HM Revenue and Customs within 14 days of the date of completion together with the sum of £3,250 in respect of the SDLT payable.
Correct. The SDLT1 needed to be sent to HMRC within 14 days of the completion date together with the correct SDLT payable. Applying the rates that were given:
· 0% on the first £150,000 = £0
· 2% on the next £100,000 = £2,000
· 5% on the remaining amount (the portion above £250,000) i.e. the final £25,000 = £1,250
· Total SDLT = £3,250
A woman is selling a registered freehold property that she owns as tenants in common with a man. The man dies between exchange and completion. The buyer of the property will give an indemnity covenant in relation to positive covenants.
Which one of the following best describes the form of transfer deed that should be drawn up and the correct parties who must execute it?
A TR1 will be executed as a deed by (1) the woman selling and a personal representative and (2) by the buyer.
A TR1 will be executed as a deed by (1) the woman selling and a second trustee and (2) the buyer.
A TR1 will be executed as a deed by (1) the woman selling provided she is also a personal representative and (2) by the buyer.
A conveyance will be executed as a deed by (1) the woman selling and a second trustee and (2) by the buyer.
A conveyance will be executed as a deed by (1) the woman and a personal representative and (2) by the buyer.
A TR1 will be executed as a deed by (1) the woman selling and a second trustee and (2) the buyer.
Correct. A TR1 is the correct form of purchase deed for a registered freehold property. When there is a sole surviving tenant in common selling, a second trustee must be appointed and execute the purchase deed with the sole surviving tenant in common for the deceased tenant in common’s beneficial interest to be overreached. The buyer must execute as they are giving an indemnity covenant.
You act for the seller of a residential property, and have exchanged with completion to take place by 3 pm today (which is a Friday). The contract incorporates the Standard Conditions of Sale. The completion monies do not arrive from the buyer until 4.45 pm. There are no bank holidays in the next few weeks.
The seller was not living in the property and does not have a related transaction, and is not put to any practical inconvenience. However, it is too late to send the money to the bank to redeem the seller’s mortgage.
What should you do?
Claim four days’ interest from the buyer in accordance with the contract.
Advise your client that there is nothing that can be done as the money was received before you had a chance to serve notice to complete.
Claim one working day’s interest from the buyer under the contract.
Claim three days’ interest from the buyer in accordance with the contract.
Claim three days’ interest from the buyer in accordance with the contract.
Correct. When the contractual completion time is missed, completion is deemed to take place the next working day. This interest should compensate the seller for the additional interest that the seller will have to pay on the mortgage over the weekend.
You act on the purchase of commercial property. The purchase is part-funded by a commercial mortgage offered by a specialist lender, who has its own solicitor acting.
Which of the following options best reflects what you and the lender’s solicitor will do after exchange but before completion?
The lender’s solicitor will issue a draft legal charge for approval.
You will request a redemption statement from the lender’s solicitor to enable completion to take place.
You will provide a final form certificate of title, and the lender’s solicitor will undertake to send you the mortgage money following completion.
You will provide a final form certificate of title and undertakings relating to the mortgage money to the lender’s solicitor.
You will provide a draft form certificate of title for approval and undertakings relating to the mortgage money to the lender’s solicitor.
You will provide a final form certificate of title and undertakings relating to the mortgage money to the lender’s solicitor.
Correct. The final form of certificate of title will be in the form of a draft which should have been approved by the lender/their solicitor before exchange. The lender’s solicitor will require undertakings to ensure that you can only use the mortgage money for the appropriate purpose.
Question 11
A solicitor is acting for the purchaser of a property in England with registered title.
The purchaser is buying the property with the aid of a mortgage.
Contracts have been exchanged, requisitions on title made, and the solicitor has conducted a pre-completion priority search of the title.
Following completion, the solicitor will need to deal with post-completion matters involving payment of Stamp Duty Land Tax (SDLT) to HM Revenue & Customs and registration of the dealing at the Land Registry.
Registration at the Land Registry must take place within 30 working days of which date?
A. The date contracts are exchanged, to avoid interest becoming payable on outstanding SDLT.
B. The date of completion, to avoid interest becoming payable on outstanding completion monies.
C. The date of completion, to avoid the equitable title in the property reverting to the seller.
D. The date of the result of the priority search, to avoid subsequent entries being made on the title which bind the purchaser.
E. The date of completion, to avoid the mortgagee’s power of sale arising under the legal charge.
D - The date of the result of the priority search, to avoid subsequent entries being made on the title which bind the purchaser.
A woman bought a house in Wales for £300,000 five years ago. She has carried out extensive renovation and refurbishment works to it.
Contracts for the sale of the house to a buyer have been exchanged. The sale price is £450,000.
The buyer’s solicitor is preparing for completion. He is currently drafting a financial statement for his client and needs to include the tax payable upon completion of the purchase.
Which tax will be payable by the buyer upon completion of the purchase?
A. Stamp Duty.
B. Land Transaction Tax.
C. Capital Gains Tax.
D. Stamp Duty Land Tax.
E. Value Added Tax.
B - Land Transaction Tax.
