Contract drafting Flashcards
Title number
Class of title should be added in brackets after title number
Specified Incumbrances - Mines and minerals
If the property register has an entry which excludes mines and minerals then this needs to be entered.
Specified Incumbrances - Restrictive covenants in charges register
Any restrictive covenants referred to in the charges register need to be included
Specified Incumbrances - Restrictions
Any restrictions regarding charges or dispositions by sole proprietors will be removed on sale so do not need to be included.
Specified Incumbrances - Mortgages
These will be discharged on completion so will not need to be added.
Specified Incumbrances - Indemnity covenants
This is a personal covenant given by the seller; as this is not something which will bind the buyer after completion, it should not be included.
Specified Incumbrances - Example wording
The mines and minerals exception in entry 2 of the Property Register and the covenants in entry1 of the Charges Register
Contract Rate
Need to put ‘The Law Society’s interest rate from time to time in force’
Pre-printed Special Condition 3(a)
If they’re buying any contents then keep this in. If they’re not then exclude it.
Pre-printed Special Condition 3(b)
If the seller is taking any fixtures then keep this in. If they’re not then exclude it
Pre-printed Special Condition 4
If the property is sold with vacant possession then remove the second part. If it is sold subject to leases or tenancies keep in second part and get rid of first part. Additionally, add in tenancy details or lease details
Pre-printed Special Condition 5
This should be deleted if there is no agreement to bring forward the time of completion
Pre-printed Special Condition 7
If there is an occupier keep this in and include the name of the occupier e.g a seller’s partner. If there isn’t an occupier then remove this.
Pre-printed Special Conditions 1, 2 and 6
Should always stay in
Additional Special Conditions
1) Appointing a second trustee
2) Limited or no title guarantee
3) If the seller will require an indemnity covenant from the buyer
4) Disclosing a defect in title
5) A deposit of less than 10%
6) VAT
7) If the seller has agreed to purchase and provide defective title insurance
Additional Special Conditions - Example of condition when seller has agreed to purchase and provide defective title insurance or restrictive covenant insurance
Prior to completion the Seller will at its own expense arrange a [restrictive covenant] [defective title] indemnity insurance policy for an insured sum of at least [normally current value] in respect of [the covenants] [the restrictive covenant] referred to in entry [number] of the Charges Register in title number []such policy to be in a form approved by the Buyer (such approval not to be unreasonably withheld or delayed) and to be handed over by the Seller to the Buyer on or before completion.
Additional Special Conditions - Defective title insurance or restrictive covenant insurance - Wording if you know the amount
The seller can produce a [Defective Title Insurance Policy] [Restrictive Covenant Indemnity Policy] in respect of this [Conveyance] and prior to completion will at her own expense arrange for the insured sum to be increased to [£440,000] and will hand the policy over to the buyer at completion
When will you need a special condition for defective title insurance or restrictive covenant insurance
If a property is subject to covenants, but the nature of those covenants and the wording of them is unknown - restrictive covenant indemnity insurance. Or if a document listed on title is lost then you need defective title insurance. The entry in the Charges Register will make it clear that the details were not available when the property was first registered.
Additional special conditions - Deposit being paid to the seller’s conveyancer as agent for the seller
The deposit can be released to seller immediately after exchange and can be used by the seller for any purpose. E.g to use the deposit as a deposit on a related purchase of a house for the seller. Wording to use ‘The deposit shall be paid to the seller’s conveyancer as agent for the seller [and Standard Condition 2.2.6 is varied accordingly].’
Additional special condition - Removing fixtures
Fixtures automatically pass with the land unless a special condition is included giving the seller the right to remove them.
Additional special condition - Not making good any damage caused by removing fixture
Making good any damage caused by removing fixtures is a usual condition so if you don’t want to make good any damage then this needs to be included as a special condition.
Additional special condition - Removing fixtures - Example of removing fixture and not making good any damage caused by removing it
The antique grandfather that is secured to the floor and wall in the living room of the property is excluded from the sale. The seller may at any time before completion remove it from the property and shall not be required to make good any damage caused
Additional special condition - Contents
Contents, fittings or chattels which are to be included in the sale must be specifically identified in the contract either by special condition or by making use of the printed special condition 3(a) which refers to the contents which are itemised on a list attached to the contract. USE ONE OR THE OTHER
Additional special condition - Contents - Example wording if using special condition
The sale includes all the fitted carpets and curtains at the property and the buyer is to pay the contents price for them.
