Contract Conditions Flashcards
What must the seller disclose in terms of incumbrances and defects in title?
Whether there are any latent incumbrances or defects in title
What are latent incumbrances?
Rights burdening the property not apparent on inspection
What are examples of latent incumbrances?
Covenants and easements
What are defects in title?
Issues that cast doubt on seller’s ownership
What is an example of a defect on title?
If a deed containing covenants has been lost
In the Standard Conditions of Sale, what are the incumbrances subject to which the property is sold?
1) Those specified in contract
2) Those discoverable on inspection before date of contract
3) Those seller does not and could not reasonably know about
4) Those, other than mortgages, which buyer knows about
5) Entries made before the date of contract in any public register except those maintained by Land Registry / Land Charges Department
6) Public requirements
In the Standard Commercial Property Conditions, what are the incumbrances subject to which the property is sold?
1) Those specified in contract
2) Those discoverable on inspection before date of contract
3) Those seller does not and could not reasonably know about
4) Those, other than mortgages, which buyer knows about
5) Public requirements
What is the difference between SCS and SCPC on incumbrances?
SCS – seller needs to disclose any incumbrances registered at Land Registry, Land Charges and Companies House – or be in breach.
SCPC – buyer deemed to buy subject to incumbrances which would be revealed by buyer’s searches and enquiries
What are title guarantees?
A guarantee by the seller to the quality of title
What are the different title guarantees in Contract?
1) Full title guarantee (the default)
2) Limited title guarantee
3) No title guarantee
What is full title guarantee?
Property is free of all incumbrances other than those in contract – which seller guarantees
What is limited title guarantee?
Given by sellers with little knowledge (i.e. executors) – meaning no incumbrances have been created since seller’s period of ownership
What is no title guarantee?
Does not guarantee seller’s right to sell, or that property is free of incumbrances.
What is the effect of no title guarantee?
Seller has no remedy against them if title issue arises after completion
When might a property be sold with no title guarantee?
If administrator or liquidator is selling
What is the default completion date of SCS and SCPC?
20 working days after the date of the contract
What is the time for completion under SCS and SCPC?
2pm
Can a party walk away from transaction if the other party does not complete on time?
Not until they serve a notice stating time is of the essence
What is meant by time is not of the essence until a notice to complete is served?
Default position of standard contract, meaning if a party fails to complete, the other can claim damages for the breach but cannot walk away from transaction unless a notice to complete is served first which details a specified time
How is a deposit paid in the SCS?
By cheque or electronically
How is a deposit paid in the SCPC?
Electronically
Who is deposit paid to?
Seller’s solicitor as stakeholder / agent
What is a deposit stakeholder?
Solicitor will hold and keep funds safe until completion
What is a deposit agent?
Seller can demand deposit immediately after exchange
