Exchange

Question 1

Who usually drafts the contract?

Answer 1

The Seller’s solicitor

Refers to heads of terms and includes a contract bundle with official copies, protocol forms, and the contract itself.

Question 2

What does the buyer’s solicitor check the draft contract against?

Answer 2

Heads of terms

The buyer’s solicitor amends the contract based on this comparison.

Question 3

What are the pre-exchange steps for the seller’s solicitor?

Answer 3

1. Prepare two clean copies of the contract and send one to the buyer’s solicitor.
2. Arrange for the contract to be signed by or on behalf of the seller and by any non-owning adult occupier.
3. Agree a completion date in principle with the client and other solicitor.
4. Request a redemption statement from the mortgagee made up to the proposed completion date.

Question 4

What are the pre-completion steps for the buyer’s solicitor?

Answer 4

1. Check there are no outstanding points regarding investigation of title, surveys, and searches/enquiries.
2. Check there are no outstanding points regarding the mortgage.
3. Arrange for the contract to be signed by or on behalf of the buyer.
4. Report to the client.
5. Report to the lender.
6. Obtain cleared funds for the agreed deposit.
7. Advise client regarding insurance.
8. Agree a completion date in principle with the client and other solicitor.

Question 5

Fill in the blank: The exchange used to be conducted on the phone but now often uses _______.

Answer 5

Law Society Formula B

Question 6

What do solicitors undertake to do during the exchange?

Answer 6

• Solicitors undertake to hold the signed contract to the other solicitor’s order
• Post signed contract that day by first class post or DX or hand delivery
• To send deposit (buyer’s sol)

Question 7

What is Formula A used for?

Answer 7

When the same solicitor holds contracts signed by both seller and buyer

Question 8

What is the purpose of Formula C?

Answer 8

Used for chain transactions

It ties related sales and purchases together.

Question 9

What happens after exchange?

Answer 9

• Need to prepare a memorandum of exchange with key contract terms for the file
• Wise to keep a copy of the signed contract
• Risk passes to buyer
• Book removal van
• Buyer holds an equitable interest in the property

Question 10

How can the buyer’s equitable interest in unregistered land be protected?

Answer 10

May be protected by a notice in the register or a class c(iv) land charge

Only really necessary if completion is a long way away