completion (week 5)

Question 1

who drafts the contract?

Answer 1

seller’s solicitor

Question 2

who drafts the transfer deeds? (default position)

Answer 2

buyer’s solicitor

Question 3

what is a TR1 form?

Answer 3

transfers the whole of a freehold or leasehold title

Question 4

what is a TP1 form?

Answer 4

for registered land
used for the transfer of part only of a registered title

Question 5

what is a TR5 form?

Answer 5

for registered land
used for transfer of a portfolio of registered titles (and may include unregistered titles)

Question 6

what is the main difference between TP1 and TR5?

Answer 6

TR5 contains a table where a number of properties and their titles (if registered) can be set out

Question 7

when must stamp duty land tax be paid? (what is the timeframe)

Answer 7

within 14 days

Question 8

when must land transaction tax be paid within? (what is the timeframe?)

Answer 8

within 30 days

Question 9

when is a TR1 form sent after completion? (how many days)?

Answer 9

needs to go out by the end of the next working day

Question 10

if there are no positive covenants - does the buyer need to sign the transfer (TR1)?

Answer 10

No they do not need to sign it if there are no positive covenants

Question 11

when is an OS1 search used? (pre-completion search)

Answer 11

pre-completion search used for buying the whole land

Question 12

when is an OS2 search used? (pre-completion search)

Answer 12

pre-completion search used for buying part of the land

Question 13

what is a requisition on title?

Answer 13

these are much simpler than pre-exchange enquiries but cover the necessary information for completion. used generally to refer to questions that the buyer’s solicitor needs answering before completion.

Question 14

what is the requisition on title called for a residential?

Answer 14

TA13 = completion information and undertakings

Question 15

what is undertaking?

Answer 15

it is a promise for the solicitor to do something eg, undertakes redeem the mortgage
not the same thing as discharging the charge

Question 16

who is the defaulting party? and who is the non-defaulting party?

Answer 16

defaulting party = party who fails to complete
non-defaulting party = party who is ready to complete

Question 17

if a party fails to complete by the time and date specified in the contract - what happens?

Answer 17

they are required to pay interest for each day’s delay

Question 18

if the buyer is late - how much interest do they pay?

Answer 18

buyer pays interest on purchase price (minus any deposit paid)

Question 19

if the seller is late - how much interest do they pay?

Answer 19

seller pays interest on the full purchase price

Question 20

what is recission?

Answer 20

remedy where contract is set aside and parties are put back in the position in which they were before the contract was made

Question 21

what is the process if a party has failed to complete on time?

Answer 21

after one party has failed to complete - the non-defaulting party can serve nice to complete on the other. having the effect of making time of the essence.
parties must complete within 10 working days (excluding date on which notice was given)

Question 22

when must a commercial property register a charge given by a company at companies house? (what is the time frame?)

Answer 22

within 21 days of the creation of the charge.

Question 23

what is a certified copy?

Answer 23

it is a copy that has been stamped and signed by a solicitor to confirm that it is a true copy of the original;. usually treated as equivalent to the original doc for evidential purposes.

Question 24

how is stamp duty calculated?

Answer 24

Where VAT is payable on the purchase price, the SDLT calculation is based on the purchase price including VAT
contents of property not included

Question 25

what is the discount applicable for 1st time buyers on SDLT?

Answer 25

if first home purchase price is no more than £625,000. If discount applies there is no SDLT for first £425,000 of purchase price and then 5% on any part over that price.

Question 26

if a person is buying a second property - what is the additional SDLT charged on the whole of the purchase price?

Answer 26

extra 3%
calculate the SDLT that is the usual chargeable and then add 3% of the total purchase price

Question 27

what is capital gains tax?

Answer 27

tax on the profit when you sell something that has increased in value

Question 28

when does capital gains tax arise?

Answer 28

where there is a chargeable disposal
of a chargeable asset
by a chargeable person
which goes rise to a chargeable gain

Question 29

what is private residence relief?

Answer 29

this applies so that a person doesnt pay CGT if they sell or dispose of their home

Question 30

what are the conditions that need to be met so that private residence relief applies?

Answer 30

it has been the person’s main home for all the time that they have lived in it
not let the property out (exception lodger)
not been used for business purposes
grounds including all buildings are less than 5,000 square meters
not bought just to make a gain

Question 31

can married couples and civil partners have one home each for the purposes of private residence relief?

Answer 31

no, they cannot = they can only treat one property as their main home between them

Question 32

if solicitor is acting for both buyer and seller - what searches must they carry out pre-completion?

Answer 32

OS1 - registered land
bankruptcy search to protect lender (form K16)