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Property Practice > Conveyancing > Flashcards

Conveyancing Flashcards

1
Q

What happens during the pre-contract stage

A

Take instructions
S gives B contract and evidence of title
B looks into title and encumbrances
B does searched and enquiries
report results of searches to B and lender

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2
Q

does S have to answer enquiries from B

A

no but an incorrrect answer may be misrepresenation

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3
Q

what happens in the pre-completion stage

A

if acting for lender - Bs solvency check
if acting for lender - draft mortgage deed
get client’s executed mortgage deed
submit title report to lender and ask for mortgage advance
ensure all docs and money are avaliable
do pre-completion searched

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4
Q

what to do on completion

A

pay remaining money

undertake to discharge mortgage

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5
Q

what happens after completion

A

pay tax
register
discharge mortgage and remove from title

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6
Q

which conveyances does the law society conveyancing protocol apply to

A

only residential conveyancing

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7
Q

can you act for buyer and seller

A

no - substantially common interest exeption doesn’t apply here

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8
Q

what to do if seller refuses to disclose contract race to potential Bs

A

refuse to act for seller

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9
Q

can you advise on or arrange a regulated mortgage contract

A

this is a regulated activity so would need to rely on s327 exemption
giving generic advice or arranging execution of an independently chosen mortgage is not regulated so can do this

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10
Q

what is a regulated mortgage contract

A

borrower is individual, it is the first legal charge of property in the UK and at least 40% is for occupation of borrower or immediate family

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11
Q

is CGT payable on conveyance

A

not if principle private residence relief applies - main residence throughout ownership
if garden of more than 0.5 hectars may pay CGT on excess unless extra was necessary for reasonable enjoyment of house
relief may be lost of part of house used only for business

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12
Q

is SDLT payable on residential or commercial transactions

A

both

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13
Q

is VAT payable on conveyance

A

if commercial building rented out and owned by company

if commercial B

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14
Q

how much SDLT for a first time buyer

A

nothing up to 300K

300-500K 5%

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15
Q

how much SDLT paid (if not first time buyer)

A 
up to 125K - 0%
125 - 250k - 2%
250 - 925K - 5% 
925k - 1.5m - 10%
1.5m upwards - 12%
on each portion
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16
Q

what is SDLT payable on

A

land but not chattels so can allocate fair amount to chattels to save on SDLT

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17
Q

which form is used to pay SDLT

A

SLDT1

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18
Q

how long to pay SDLT

A

14 days from completion or fine, interest and not registered

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19
Q

which transactions incidental to covenyance attract CGT

A

release of easements

gifts

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20
Q

can you register for VAT if you only sell exempt goods

A

no

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21
Q

VAT rate on sale of new residential freehold

A

zero-rated

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22
Q

VAT rate on subsequent sales of residential freehold (not first sale)

A

not in course of business so not VAT

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23
Q

VAT payable on sale of greenfield site (commercial)

A

exempt/option

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24
Q

VAT payable on supply of construction services (commercial)

A

standard rate

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25
Q

VAT payable on supply of professional services (commercial)

A

standard rate

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26
Q

VAT payable on sale of new commercial freehold

A

standard rate

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27
Q

VAT payable on sale of old commercial freehold

A

exempt / option

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28
Q

VAT payable on grant of commercial lease

A

exempt/option

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29
Q

what is a new/old commercial building

A

new commercial property is within 3 years from completion of building

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30
Q

How soon should S provide EPC

A

at earliest opportunity. Preferably within 7 days but in any event within 28 days

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31
Q

How to investigate title for registered land

A

S provide Official copies of registered title
B get copy of title plan from land reg
B check if there are any overriding interests by using searches and enquiries

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32
Q

what do the official copies of registered title show

A

entries on property, proprietorship and charges register

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33
Q

when must title deduction be done by

A

must done before exchange. Cannot object to it afterwards

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34
Q

what is investigation of title

A

to establish who owns the property and any incumberances

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35
Q

what does a typical sale contract say about incumberances

A

S sells property free of all incumberances unless it states otherwise so must identify incumberances and specify them in the contract

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36
Q

what are incumberances

A

third party rights that bind the property

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37
Q

how to investigate title for unregistered land

A

check if reg, pending reg or caution against reg
if unreg prove with deeds
S gives B copy of deed and originals on completion (or certified copies if selling part)
find good root of title
prepare epitome
search against estate owners in epitome using k15

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38
Q

who gives B the deed for unreg land

A

seller or if a mortgage then lender

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39
Q

what happens on first reg if there is a caution against reg

A

land reg notifies cautioner

they must prove their right within specified time or they lose it

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40
Q

how to check if unreg land is registered, pending registration or has a caution against registration

A

index map search at land reg on form SIM with a plan of the property

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41
Q

what is vertification of title

A

on completion when B’s solicitor examines original deed to check they are the same as the copies

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42
Q

how to mark original deed in a sale of part

A

a memorandum of the sale of part is marked on the original deed

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43
Q

how to find root of title

A

find it in deeds

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44
Q

what is root of title

A

the doc from which the title investigation begins. usually the most recent doc that meets the requirements

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45
Q

requirements for good root of title

A

shows who owns legal and equitable interest
describes the land
do nothing to cast doubt on title
be at least 15 years old
need unbroken chain of ownership from root up to seller. Need documentary evidence of all changes of ownership

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46
Q

which documents are most likely to give good root of title

A

conveyance
mortgage
deed of gift
assent

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47
Q

when can B call for docs that pre-date the root of title

A

when the root doc refers back to a third party right

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48
Q

who prepares epitome of title

A

seller

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49
Q

what is the epitome of title

A

schedule of docs from and including root of title to present day.
numbered and in chronological order
attached to epitome are copies of each doc

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50
Q

what document is needed for the title investigation if the owner of the property has died

A

grant of probate

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51
Q

what should buyers solicitor do once they receive the epitome of title

A

make searches against all estate owners revealed in epitome and attached docs for period of ownership (or since 1926) even if period of ownership pre-date root of title

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52
Q

how to search against estate owners revealed on epitome

A

use form k15

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53
Q

does the buyer need to search against the lender when searching against estate owners revealed on epitome

A

not - only if they are in possession

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54
Q

what else should buyer’s solicitor check when doing searches to prove title

A

check title deed to see if description of property is consistent throughout
check each title for incumberances
check each doc was properly executed as a deed

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55
Q

can you rely on searched done previously by others in previous sales

A

yes

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56
Q

when do restrictive covenants bind unreg land

A

only if registered properly

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57
Q

where do easements appear

A

reg land - charges and property register
unreg land - conveyance
property reg shows financial contributions to easements

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58
Q

where is info regarding mines and minerals found

A

reg land - property register

unreg land - conveyance. do index map search to see if they have seperate title on form SIM

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59
Q

how to tell if the equitable interest is held as JT or TinC

A

assume JT unless restriction appears in proporietorship register or conveyance

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60
Q

does the seller have a duty to disclose problems with the property

A

no but cannot give misleading answers to questions

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61
Q

what are the essential pre-contract searches

A 
sellers enquiries
environmental search 
survey 
flooding 
water and drainage 
local land charges search and standard enquiries of local authority (local search)
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62
Q

what are the non-essential pre-contract searches

A 
chanel and repair 
commons
mining 
railway
canal and river trust
highways 
unregistered land searches
company search 
bankruptcy / insolvency search
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63
Q

pre-contract enquiries of seller

A

essential

disputes, occupying parties, convenant compliance, planning permission, boundaries, VAT status

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64
Q

envronmental searches

A

essential
desktop search to check for contamination
if risk of contamination do physical survey
consider insurance

65
Q

flood search

A

essential
re flood
insurance

66
Q

professional survey

A

essential
lender will want valuation
full structural survey or homebuyers valuation and survey

67
Q

local land charges search and standard enquiries of local authority (aka local searches)

A

essential
LLC1 and CON29
planning permission, contaminated land, road repair liability, financial charges, restrictions on land, tree preservation order, conservation area, smoke control order

68
Q

optional enquiries to local authority

A

CON29O

environmental pollution and common land attached to property

69
Q

water and drainage search

A 
essential 
raise with water company using CON29DW
are they adopted
connected to public water supply
connection to public sewer for foul and surface water
70
Q

chancel and repair search

A

in reg land - overriding status lost in 2013 but if last transfer for value was before this date it will bind buyer
in unreg land - only binding if referred to in titled deed or protected by caution
consider insurance

71
Q

mining search

A

CON29M

confirm if mining took place

72
Q

canal and river trust search

A

liability for repair or maintenance

any previous floods

73
Q

railways search

A

network rail don’t answer these. Use CON29

obligation to repair and restrictions on building works

74
Q

highways

A

CON29
doesn’t include info on verges and pavements
send plan to highway authority asking for publically maintainable highway to be marked on it

75
Q

unregistered searches

A

index map search with form SIM and land charges department search against previous estate owners

76
Q

company search

A

when seller is company at companies house
look for fixed or floating charges to discharge on completion
check for insolvancy
also do company search against any corporate estate owners revealed in epitome

77
Q

bankruptcy / insolvency search

A

solicitor acting for lender should search against borrower
use K16 to land charges department if it is an individual
if it is a company do a company search instead

78
Q

what is the rule in Halsall v Brizell

A

cannot take benefit of positive covenant without taking burden of it too
exception to the rule that positive covenants don’t run with the land
benefit and burden must be conferred by same transaction
need correlative relationship between benefit and burden
must have choice to disclaim benefit to free themselves of burden

79
Q

where are mortgages found

A

charges reg (and maybe proprietorship reg) and title deeds on epitome

80
Q

where are details of the restrictive covenants found

A

charges reg or conveyance

81
Q

in unregistered land when is a post - 1925 restrictive covenant binding on buyer

A

only if registered as a D(ii) charge against name of original covenantor
check with land charges search

82
Q

where are details of the positive covenants found

A

charges reg or conveyance if un reg land

83
Q

how to tell if seller gave indemnity covenant when they bought property

A

check proprietorship reg

84
Q

what should you assume about a covenant that you know exists but for which the details are lost

A

assume it is restrictive and binding on buyer

get insurance

85
Q

when do leases bind

A

if registered - binding
if not registered binding if overriding
overriding - if legal lease for 7 years or less or equitable lease plus actual occupation

86
Q

where to find a lease

A

title deed for unreg land (unless parol lease which is binding but not made by deed)

87
Q

what is a notice

A

entry on charges register indicating burden

88
Q

do you need consent of owner to place a notice on register

A

no

89
Q

what is the effect of a notice

A

it doesn’t guarantee interest is valid or exists. Doesn’t give them any rights over property. it ensures priority of interest in notice is protected against subsequent interests

90
Q

what to do if searches reveal a notice

A

ask S to ascertain what is relates to and refuse to proceed until S has it cancelled at land reg before contract exchange

91
Q

Do home rights bind buyer

A

yes if protected by notice or class F charge by date of transfer of property to buyer

92
Q

what to do if searches disclose a home right

A

buyer should obtain from non-owning occupier a release of all rights in the property and agreement to vacate. Usually in the contract

93
Q

When do the standard conditions of sale apply (SC)

A

residential and simple commercial sales

94
Q

when do the standard commercial property conditions apply (SCPC)

A

high value commercial property transactions

95
Q

what are the three parts of the SC and SCPC

A

particular of sales - burdens on property, title number and class or root title, full or limited guarantee, financial terms of transaction
standard conditions - terms that govern transaction unless parties specifically agree something else
special conditions to meet requirements of specific transaction

96
Q

what are the two parts of the SCPC

A

part 1 applies unless excluded and part 2 applies if specifically included

97
Q

full guarantee or limited guarantee

A

sell with full if they own whole legal and equitable title

sell with limited if they have limited knowledge of the property eg executor or trustee

98
Q

when does the legal interest in the property pass from seller to buyer

A

on completion

99
Q

with both full and limited guarantee seller impliedly covenants that…

A

they have the right to dispose of the land
they will do all they reasonably can to transfer the land
if leasehold, the lease is subsisting at the time of disposal and there is no breach of covenant making the lease liable to forefiture.
for full guarantee only - the land is free from incumberances other than those S doesn’t know of and couldn’t reasonably know of

100
Q

what is the contract rate

A

interest charged if party is late in completing. interest is charged on purchase price less deposit
2-4% is normal

101
Q

what if B fails to complete

A

S can forefit and keep the deposit

102
Q

how to pay the deposit

A

cheque or electronic transfer - SC
electronic transfer only - SCPC
must be paid into bank in name of seller’s solicitor or coneyancer nominated by seller’s solicitor (if SC2.2.5 is used)

103
Q

what is SC 2.2.5

A

Seller can use deposit to fund next property

104
Q

how is a despoit held and what difference does it make

A

held by seller’s solicitor as stakeholder - cannot give it to seller until completion
held by seller’s solicitor as agent - it can be released to seller immedately after exchange

105
Q

when is a despoit held as agent instead of stakeholder

A

when buyer agrees

106
Q

when does risk of damage to property pass to buyer

A

on exchange of contracts so buyer must complete even if property is damaged between exchange and completion

107
Q

does seller need to insure freehold

A

no - not unless required by special condition

108
Q

what are the 3 VAT options in the SC and SCPC

A

purchase price is exclusive of VAT and VAT will be added on top (SCPC2)
purchase price is inclusive of VAT so VAT cannot be added on top (SC1.4 or special condition for SCPC)
purchase price is exclusive of VAT so VAT can be added on top if law changes between exchange and completion but won’t opt to tax (SCPC part 2 condition A1)

109
Q

where are the mortgage terms and conditions found

A

in the mortgage offer for residential and simple commercial loans
or
a commitment letter with terms sheet attached followed by facility agreement containing terms of lending arrangements if complex loan

110
Q

can the lender withdraw the mortgage offer after exchange

A

yes mortgage offer may allow this

111
Q

when are mortgages legal

A

when made by deed and completed by registration

112
Q

do all mortgage deeds contain a power of sale

A

this is implied into all mortgage deeds but often they include an express power too

113
Q

what must the buyer’s solicitor explain to the buyer regarding the mortgage

A

the obligations under the mortgage deed, consequences of defaulting, and powers of lender in the event of default

114
Q

can solicitor act for borrower and lender even if there is a conflict

A

yes as long as there is a substantially common interest and safeguards are in place

115
Q

what to do if a conflict arises between lender and borrower where you act for both

A

cannot proceed with purchase using lender’s funds until resolved to lender’s satisfaction

116
Q

what must the lender be provided with to show that the property has good and marketable title

A

certificate - won’t exchange until they have this.

117
Q

what does the certificate of good and marketable title include

A

confirms no legal problems with the property
who will own property once sale is completed
the completion date when funds are needed
also in more complex commercial version:
report about property
summary of info ascertained in title investigation and pre-contract searches

118
Q

who is the certificate / report addressed to and prepared by

A

prepared by buyer’s solicitor

addressed to buyer or to buyer and lender

119
Q

what if the info in the certificate / report to lender if wrong

A

lender can sue because it contains waranties about correctness of info

120
Q

when is the certificate given to the lender

A

immediately prior to completion of the loan

drafts given earlier

121
Q

do you need your client’s authority before exchanging contracts

A

yes must get this authority in writing with note on file or liable in negligence

122
Q

can you sign the contract on behalf of your client

A

yes if they have given you the express authority

123
Q

3 ways to exchange contracts

A

in person, in post or by telephone

124
Q

3 protocols for exchanging contracts

A

Formula A, B and C

125
Q

formula A for exchange of contracts

A

one solicitor has both parts of contract duly signed so one solicitor sends the client’s signed part already. Solicitor undertakes to send it the same day by DX or first class post once signed. Buyer undertakes to send deposit funds the same day

126
Q

formula B for exchange of contracts

A

each side holds their own client’s signed contract and the same day sends by DX or first class post or personally to the other side duly dated. Buyer sends deposit

127
Q

formula C for exchange of contracts

A

for residential property in a chain

128
Q

how to record the exchange of contracts

A

record details, time and formula in top corner of front page of contract. Do this at time of phone call exchanging. also note in file the date, time and formula, deposit and identity of solicitor exchanging.

129
Q

what pre-completion checks should be done

A

if reg - land reg search against title number on OS1 (or OS2 and plan if part sale)
if unreg - do land charges search against seller on form K15
if reg - special land charges search on K16 (bankruptcy search)
if unreg do bankruptcy search using land charges search by adding buyers name to K15 that you will already be doing against the seller
or if company do bankruptcy search at companies house

130
Q

priority period conferred by pre-completion land reg search against title number (OS1/OS2)

A

30 working days from date of search. submit reg application by noon on day 30

131
Q

priority period conferred by pre-completion land charges search on K15

A

15 working days from date of result

132
Q

in whose name should the pre-completion land register search be done (os1/os2)

A

the lenders if there is a mortgage

133
Q

how long is the priority period conferred by a bankruptcy search on a company at companies house

A

no priority period

134
Q

how soon after exchange of contracts does completion take place

A

4 weeks / 20 working days

135
Q

requirements of a deed

A

signed, clear on its face its a deed, delivered
witnessed if private individual
if company either seal, 2Ds/DandS or 1 D and witness

136
Q

who executes the transfer deed to transfer the land (TR1)

A

the seller

but buyer also does this if they are entering into an obligation or making a declaration eg indemnity covenant

137
Q

when is a deed delivered

A

when it is executed if it makes clear on its face it is a deed
so if it isn’t to take effect immediately you will have to make this clear

138
Q

what deed is used to transfer the land

A

TR1 or if part only then TP1

or if unregistered can use TP1/TR1 or conveyance

139
Q

what does the lender need to receive before they will release the mortgage advance

A

certificate of title
OS1 in name of lender
bankruptcy search
executed mortgage deed but not completed

140
Q

what is a completion information form used for

A

to agree practicalities of completion. Buyer sends this to seller to complete. include an undertaking to discharge mortgage.

141
Q

what is a financial statement

A

send from buyers solicitor to buyer to inform them of funds needed to complete

142
Q

when does completion take place

A

once full funds are received by seller

143
Q

what happens when seller receives the full funds

A

seller dates the TR1 and THEN the lender dates mortgage deed

144
Q

how to complete in person

A

buyers solicitor checks title deeds match the copies. Seller hands over title docs

145
Q

how to complete by post

A 
BS sets out what S should do. S does this for free. 
S will check title deeds on behalf of BS.
S sends docs to BS by DX or first class post
S gives implied undertaking that they will comply with BS instructions
146
Q

if completing by post how can the buyer be sure the the seller will comply with the instructions to check the title deeds

A

sellers solicitor gives an implied undertaking

147
Q

what to do if first registration is triggered (form and time)

A

2 months

form D1 - set out overriding interests

148
Q

how to pay SDLT (forms and time)

A

14 days from completion
send payment and tax return
get WRA certificate

149
Q

how to register a mortgage if taken out pay a company and how long to do this

A

register at companies with 21 days of completion

150
Q

what if a mortgage taken out by a company is not registered at companies house

A

void against liquidators and administrators of borrower and borrower’s creditors

151
Q

how does the lender register a mortgage

A

register a charge using AP1

152
Q

how to discharge a mortgage (forms etc)

A

once lender receives mortgage money they complete DS1 and send it to S to send to B who apply’s for mortgage to be discharged
or
do it electronically - notify B that they don’t need to do anything else because it will be discharged automatically

153
Q

remedies if you don’t complete on time

A

SC and SCPC say time is not of the essence until notice to complete is served so you cannot rescind, only get damages
SC - B and S can pay damages
SCPC - only B liable to pay damages

154
Q

when must the transaction be completed by

A

2pm or counts as next day

155
Q

how to calculate compensation payable when completion is delayed

A

period between completion date and actual completion
on remainder of amount to be paid
if non-paying party at fault exclude those days

156
Q

how to make time of the essence

A

serve notice to complete

157
Q

when can you serve notice to complete

A

after contractual completion date

158
Q

effect of serving notice to complete

A

10 working days to complete or can rescind (not obliged) and get damages

159
Q

when can contract be rescinded so transaction is not completed

A

notice to complete is served and 10 working days expired
fraud / reckless misrepresentation or property will be substantially different in quality, quantity o tenure from what they were led to expect. (less serious misrep would only allow damages)

Property Practice (13 decks)

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