Exchange of Contracts (Stage 3)

Question 1

Exchange of contracts is the point when the matter of conveyance becomes _________ ________ on the ______ and the ______

Answer 1

legally binding, seller, buyer

Question 2

On exchange, the ________ interest in the property will pass to the buyer

Answer 2

equitable

(note: the legal interest doesn’t pass until registration for registered land, and completion for unregistered land)

Question 3

What are the three methods of exchange of contracts?

Answer 3

1. Person
2. Post
3. Phone

Question 4

What is the Formula A method of exchange by phone?

Answer 4

Where one solicitor (usually the seller’s) holds both signed parts of the contract. B’s solicitor would have sent the signed contract and deposit cheque in advance. S’s solicitor confirms both parts are the same and inserts the exchange and completion dates on both

Question 5

What is the Formula B method of exchange by phone?

Answer 5

Where each solicitor holds their own client’s signed part of the contract. They confirm the versions are the same and send their signed part to the other

Question 6

What is the Formula C method of exchange by phone?

Answer 6

When there’s a chain of transactions, deposit monies are to be sent directly to another firm further up the chain. Calls are made to confirm solicitors are ready and to confirm actual exchange

Question 7

Memorandum of Exchange is a central part of the requirements of the formulae and is designed to ensure that both solicitors have a contemporaneous and accurate written record of the conversation which effected exchange.

Give 5 things that will be detailed on the MoE?

Answer 7

1. Solicitors names
2. Date and time of exchange
3. Exchange formula used (and any variations)
4. Completion date
5. Amount of deposit paid

Question 8

What should the buyer’s solicitor consider doing if the parties have agreed a completion date which is more than a couple of weeks after exchange?. Answer for:
1. Registered land
2. Unregistered land

Answer 8

1. Registered - Registering the estate contract on the charges register
2. Unregistered - Register the estate contract as a C(iv) estate contract against seller’s full name

Question 9

What should the parties do if they wish to vary the contract after exchange?

Answer 9

Re-execute a new contract with new terms