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Property Practice > Freehold transactions > Flashcards

Freehold transactions Flashcards

1
Q

What are the two milestones in a conveyancing transaction?

A
  1. Exchange of contracts
  2. Completion
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2
Q

What happens at completion (basic level)?

A
  1. Balance of purchase price paid to seller;
  2. Deposit paid on exchange is released;
  3. Transfer deed is dated/completed; and
  4. Mortgage deed dated

(in that order)

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3
Q

Is exchange of contracts compulsory? Explain the advantages.

A

No.

Useful:
- Fixes date / time
- Gives time to make final preparations
- Useful if want certain things to be done before completion
- Contract terms can be relied on if anything goes wrong between exchange and completion

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4
Q

What gap should there be between exchange of contracts and completion?

A

None required, can be simultaneous.

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5
Q

What are the three stages in a property transaction and how do they fit around exchange of contracts / completion?

A

Pre-contract stage

(Exchange of contracts)

Pre-completion stage

(Completion)

Post-completion stage

(buyer)

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6
Q

What does caveat emptor mean? Explain.

A

Buyer beware.

Seller limited duty disclose info about property

OTHER than limited matters of title (eg defects)

Not liable defects buyer later discovers

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7
Q

What enquiries should a buyer raise with seller before exchange?

A

(inter alia)
- Boundaires
- Access
- Disputes
- Outgoings
- Previous work carried out at the property

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8
Q

What does caveat emptor not entitle the seller to do?

A

misleading answers - could give action for misrepresentation.

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9
Q

First step in pre-contract stage

A

Both sides take instructions and do conflict check

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10
Q

What are responsibilities of seller’s solicitor in pre-contract stage?

A

Investigate title and produce evi of title to buyer

Respond to buyer’s enquiries

Draft contract !

Submit pre-contract package of documents to buyer’s solicitor.

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11
Q

What should buyer’s solicitor pay close attention to in pre-contract package of docs?

A
  1. Seller able to sell property (i.e. has title to the land)
  2. No encumbrances e.g. restrictive covenants
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12
Q

What should pre-contract package of docs usually contain?

A

Evi of title
Draft contract

Usually a provision prohibiting further queries (requisitions) on title after exchange

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13
Q

What are requisitons?

A

Queries from buyer to seller re title of land

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14
Q

Who should buyer’s solicitor report results of pre-contract searches to?

A

Buyer and buyer’s lender

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15
Q

Are any fees exchanged on exchange of contract?

A

Usually buyer pays deposit (typically 10%) which held by seller’s solicitor until completion

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16
Q

What happens at pre-completion stage?

A
  • Draft transfer deed (buyer) and approve (seller)
  • Draft and execute mortgage deed if acting for lender
  • Raise pre-completion searches/enquiries (buyer) and reply to them, inc undertaking to discharge seller’s mortgage (seller)
  • Submit report on title/certificate of title to lender and request any mortgage advance (buyer)
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17
Q

What happens on completion?

A

Buyer pays balance of purchase money.

Seller hands over keys to property.

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18
Q

What are sellers’ responsibilities at post-completion?

A

Ensure mortgage discharged as per completion information form

Send TR1 form to buyer’s solicitor

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19
Q

What is the Law Society Conveyancing Protocol?

A

Instructions for conveyancers on how to carry out a residential sale and purchase

Accompanied by series of standard docs issued under the ‘TransAction’ brand

(e.g. TA06 form sent from seller’s solicitor to seller for standard pre-contract enquiries)

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20
Q

Law Soc Conveyancing Quality Scheme (CQS) - firm entry requirements

A

Comply with:
1. LSCP (Protocol)
2. Client Service Charter
3. Mandatory training and enforcement procedures

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21
Q

Why would a firm want to be part of CQS?

A

Required if want to be on panels of solicitors approved by residential mortgage lenders

ie can act for lender

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22
Q

Second step of pre-contract stage?

A

Both parties investigate title

(seller’s solicitor produces evidence to buyer)

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23
Q

Under what conflict rule can you act for two buyers who are competing against each other?

A

Para 6.2(b) - Competing for the same objective

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24
Q

When can you act for joint buyers? What should you advise them on?

A

Yes if comply conflict rules

May need to advise them SEPERATELY on how they want to hold equitable interest (esp if not married)

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25
Q

Can u act for lender and buyer?

What conflict rule?

What must u do?

A

Yes - unless conflict rules prevent.

Substantially common interest;

Both clients given informed consent;

Appropriate safeguards to protect confidential info;

AND

Satisfied reasonable to act

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26
Q

what is the only ever tiny little percentage that will allow u to act for buyer and seller

A

Only in exceptional circumstances. High risk of conflict.

Must be competing for same objective.

Must be in best interests and be able to justify to SRA.

Careful of bargaining power.

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27
Q

When is risk of conflict high when acting for borrower and lender?

A
  • Mortgage is NOT a standard mortgage
    (i.e.normal part of lender’s activities and standard terms)
  • Mortgage is standard but you do not use the approved cert of title

(ahh yes because mortgagee could argue about it)

(both usually not an issue in resi, large comm prop often not standard)

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28
Q

on what conflict rule allows the below

Comm prop - borrower and lender have separate solicitors - can lenders ask borrower’s solicitors to carry out and report title investigation/searches/enquiries?

Explain why may want to do so.

A

Yes

Saves duplication of time

Substantially common interest in borrower obtaining good title / nothing impacting property’s value

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29
Q

When would Etridge guidelines apply? Provide common example.

A

Where property is being charged (i.e. security/loan over it) in return for a loan which all joint owners don’t benefit from. (Puts lenders on inquiry of risk of undue influence)

(e.g. jointly own matrimonial home. One uses mortgage as security for business loan. Business then fails - bank will enforce security against the home. Spouse may want it set aside due to undue influence.)

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30
Q

What should a lender provide solicitor with under Etridge guidelines?

A

With husband’s consent, provide solicitor with the following info:

  1. Purpose for which loan is being made available;
  2. Current amount of husband’s indebtedness;
  3. Amount of current overdraft facility;
  4. Amount and terms of the new loan; and
  5. Copy of any written application by husband for the loan
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31
Q

main stuff need to say at etridge

interview

A

On receipt of info from lender, provide to other party

  1. Purpose of involvement
  2. Explain that** lender will rely **on solicitor’s involvement to counter a suggestion that she’s been unduly influenced/not fully understood nature of transaction; and
  3. Obtain confirmation that wishes for solicitor act on their behalf in the transaction and advise on the legal/practical implications of this
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32
Q

Etridge.

What must you tell wife?

A

Explain:
- docs
- practical consequences of signing
- seriousness of risks

Tell has choice - does she wish to proceed?

If so, ask whether want us to write to lender confirming matters explained

Must only write to lender if received relevant docs FROM lender

Face-to-face
Absence of husband
Non-technical language

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33
Q

If advising wife as a joint borrower and looks like not in best interests, what should you do?

A

give reasoned advice to that effect.

if v clear being v wronged, decline to act

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34
Q

joint borrowers - should wife be advised by different solicitor to husband?

A

No, as long as followed Etridge and Code of Conduct issues not apply.

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35
Q

Full name of Etridge case and broadly what used for

A

Royal Bank of Scotland v Etridge (no 2) and others 2001

To consider potential undue influence.

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36
Q

What’s a contract race?

A

Seller sending contract package to multiple buyers, who then compete so ready to exchange quickest

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37
Q

Is a contract race permitted?

A

Yes, as long as ALL buyers know they are engaged in it
(inc if already sent it to them)

But cannot instruct solicitor that don’t want them to know - misleading buyers (prof conduct reqs).

Must tell them immediately that intend deal more than one buyers.

If seller refuses to agree, cease acting.

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38
Q

What should you ensure if making an undertaking to pay deposit money?

A

Make clear that will be paid only if it is received from buyer.

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39
Q

If a client arranges for a loan from a relative or private trust fund, can you advise both parties?

A

No

guess its diff to a lender since won’t be on standard terms etc

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40
Q

What must you include when explaining fees for conveyencing?

INTERVIEWING

A

Stamp Duty/Land Transaction Tax

Land Registry fees

Searches fees

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41
Q

How does a lender secure a loan (which a buyer will want to ensure can pay for the property)?

A

Usually over the property (against a valuable asset)

And usually via a mortgage

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42
Q

What are the restrictions on advising on the best form of financing a property?

A

Can always advise (as not regulated activity):
1. generic advice - eg diffs between types of mortgage
2. arrange / execute mortgage chosen:
1. indep by client; or
2. on advice of authorised person

Can’t do reg act on reg mortg.

regulated mortgage inc:
1. borrower individual
2. lender first legal charge
3. 40% intend occupation them or immed fam

regulated activity = advising or arranging (except the above)

If reg activity can still arrange and advise under s 327 exemption if
incidental to provision of professional services

Must still follow COB rules meaning:
- can’t recommend enter reg mortg unless that advice is an endorsement of a recommendation made TO CLIENT by authorised person

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43
Q

What do SRA Financial Services (Scope) Rules and SRA Financial Services (Conduct of Business) Rules not allow a solicitor to do re mortgages?

A

recommend a client to enter a REGULATED mortgage contract except where the advice is endorsed by a recommendation to the client by an authorised person

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44
Q

What should a solicitor do if not got requisite knowledge to provide generic advice or if requires advice on a specific mortgage product?

A

Refer to FCA-authorised person

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45
Q

What is a regulated mortgage contract?

A

Borrower is an individual

Borrower or member of their immediate family intend occupy at least 40% property

Lender will have first legal charge over it

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46
Q

What is a regulated activity re a mortgage contract?

What’s not included?

A

ARRANGING or ADVISING on a regulated mortgage contract

Doesn’t include generic advice (e.g. diffs types of mortgage) or arranging the execution of a mortgage chosen independently of the client on advice FCA authorised person

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47
Q

s 327 exemption

A

allows a non-FCA authorised firm to arrange or advise on a regulated mortgage contract, if doing so relates to SRA-regulated services

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48
Q

What are the two most common types of mortgages?

A

Repayment and interest-only mortgages

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49
Q

What’s a repayment mortgage?

A

Where borrower pays monthly payments, made up:
- partly of instalments of the original amount borrowed
- partly of interest chargeable on the loan

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50
Q

at what rate does borrower pay interest under a repayment mortgage?

A

Either:

  • At lender’s standard variable rate
  • Can fix interest for a set period
  • Can agree a tracker rate of a certain percentage above UK base rate set by Bank of England

(fixed or tracker rates, interest reverts to SVR at end of agreed period)

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51
Q

Advantage of a repayment mortgage

A

End of mortgage term, paid off everything owed

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52
Q

What’s an interest-only mortgage?

A

Borrower makes monthly payments to lender which comprise only of interest chargeable on the loan

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53
Q

Advantage and disadvantage of interest-only mortgages

A

Monthly repayments lower than repayment mortgage

But by the end they will owe the whole original amount borrowed
- so need another way (eg savings) to pay off the mortgage if want to be free of it by end of the term

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54
Q

What is a combined mortgage? What will lender usually want?

A

Where part of the loan is interest only and part is repayment.

Evidence as to how will repay the rest at the end of the term

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55
Q

What are options for clients who are unable to enter mortgages which charge interest? Give two examples.

A

Financial schemes that are Sharia complaint and avoid paying interest

Examples:

  1. Bank buys property and resells at higher price. Buyer pays excess by instalments over number of years.
  2. Bank buys it and leases to buyer in return for rent. At end of lease, bank transfers to buyer.
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56
Q

Does comm prop client pay SDT or LTT?

A

Yes.

But no special concession for first-time buyers and may have to pay VAT.

(genuinely true i checked this)

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57
Q

Do you have to pay CGT on a residential property?

A

Generally not if used as only or main residence.

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58
Q

What tax does a landlord of a comm prop pay and on what?

(NB: PAY - not charge)

A

Corporation Tax
- On its rent
- and on CGT
(charged as corp tax

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59
Q

What is SLDT/LTT? What does it depend on?

A

Seperate rate of tax per portion of the purchase price.

Depends on value of transaction and whether resi or comm prop

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60
Q

Who can claim relief (reduce) from SLDT?

(inc value of property)

A

First-time resi buyers if:
- Intend main residence
- Purchase price under £625k

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61
Q

What SDLT do FIRST TIME buyers pay?

A

Nothing up to 425k and 5% on portion from 425,001 to 625k

(can’t claim if over 625k)

(think of it as g bev was 25 when bought)

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62
Q

What percentage SDLT do non-first time (resi) buyers pay?

A

250k to 925k - 5%
925.001 - 1.5m - 10%
Above that - 12%

(think of ldn non-first time buyer)
(start at 25 like g bev)
(then have a 5,10 and 12 y/o)
(and most have house over 925k)

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63
Q

What is SDLT not payable on?

A

Chattels (e.g. curtains, carpets)

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64
Q

How could you save SDLT re chattels? What must you ensure?

A

(esp if valuable chattels)

Apportioning part of purchase price to chattels

Apportionment must be a fair value or else fraud

(apportionment is key word here - it is not a seperate price)

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65
Q

What types of buyers have higher rates of SDLT/LTT?

A

Buying additional property

Not a UK resident

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66
Q

What are the SDLT rates for non-residential or mixed use freehold properties?

(e.g. holiday home or comm prop)

A

up to 150k = 0%
Over 150k - 250k = 2%
Over 250k = 5%

v neat / lots of 2s lots of 5s

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67
Q

How long to pay SDLT?

What if miss this?

A

Within 14 days of completion

If not, not registered with LR and brings penalties

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68
Q

Differences between LTT and SDLT

A

No relief for first-time buyers

Diff tax rates

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69
Q

What are LTT tax rates if buying resi?

A

0% until 225k
(wana be diff?)

6% 225k - 400k
(2+4 = 6, and a clear 0000)

7.5% 400k to 750k
(7.5 / 75)

10% 750k to 1.5m

12% above 1.5m
(1.5m like eng)

(ignore the brackets unless helps remember 😀)

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70
Q

LTT rates for non-resi or mixed use

A

0% until 225k
1% 225 - 250k
5% 250k - 1 m
6% over 1 m

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71
Q

Is SDLT/LTT payable on VAT?

A

Yes

(remember only in mixed use or non resi freeholds)

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72
Q

How to pay LTT and deadline?

A

Land transaction return sent to Welsh Revenue Authority within 30 days of completion

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73
Q

What type of property as in items is CGT chargeable on?

A

Freeholds/leaseholds

Interests of co-owners in jointly-owned property

Gifts

Sometimes transactions which are incidental to sale of land (e.g. seperate payment for release of easement)

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74
Q

What can be deducted from CGT?

A

Costs in acquiring or improving the property in set circumstances

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75
Q

At what rate is CGT chargeable?

A

Rate set by gov after allowing for an individual’s annual exemption

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76
Q

If more than one residence, are you exempt from CGT on both?

A

No - choose which by electing to HMRC

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77
Q

Is CGT payable by trustees where they hold a property on trust which is occupied by a beneficiary?

A

No

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78
Q

Can you be absent from your main residence and still be exempt from CGT?

A

Yes.

e.g. employee required to live abroad - still certain circumstances.

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79
Q

Do you pay CGT on your personal home which is used for business use?

A

Only on the part of the home that was used for business

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80
Q

What size does garden have to be for CGT to apply on it?

A

CGT chargeable on excess of 0.5 hectacres

Unless can demonstrate extra garden needed for reasonable enjoyment of house

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81
Q

What is taxable person?

A

SUPPLIER of goods or services whose turnover in past year is over registration limit (currently £85k), and therefore can charge and collect VAT

(nb supplier - not just someone who earns more than 85k)

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82
Q

What is output tax?

A

The VAT charged by a supplier on its goods or services

(specify this on invoices)

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83
Q

What is input tax?

A

VAT incurred on PURCHASE (instead of sale) of goods/services

(i.e. what you are charged when buying something)

infuriating incurring input tax !

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84
Q

Supplier deducts ____ it has paid against ____ it has charged and supplies only the _____ completing a VAT return to HMRC?

A

Input tax
Output tax
Net amount

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85
Q

What is required to recover income tax?

A

Immediate and direct link to output tax

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86
Q

Tax implications of selling customers VAT-free products and services (for the business itself)?

A

Cannot register for VAT and therefore recover any input tax

(not an issue that not paying VAT on output tax but can’t claim back anything that you do have to pay e.g. to other providers)

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87
Q

What are the different types of supply and different rates of VAT associated with them?

A
  1. VAT payable
    standard rate - 20%
    reduced rate - 5% (domestic fuel supplies and certain construction, conversion and renovation services)
  2. Zero-rated supplies - still taxable but at 0%
  3. Exempt supplies - non-VATable (but sometimes a supplier of land has an option to tax)
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88
Q

Is VAT charged on resi transactions?
(new builds and resi between individuals)

A

Generally not:

  • New builds sold by developer - zero rated
  • Resi property private individual to private individual - exempt
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89
Q

What is classed as a new commercial property?

A

If property is less than 3 years old at date sold.

(lily im only 3 !!!)

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90
Q

General rule on tax of supplies of interest/rights/licences to occupy commercial property?

A

Exempt

(nb selling and leasing usually exempt)

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91
Q

Comm prop - when can seller exercise option to tax (when otherwise exempt)?

A
  1. Sale of greenfield site (not been built on before)
  2. Sale of an OLD (!) freehold building
  3. Grant of a lease
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92
Q

Which supplies are taxable at standard rate in comm prop transaction?

A
  1. Professional services (e.g. architect/surveyor)
  2. Supply of construction services
  3. Sale of new freehold building
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93
Q

Is VAT chargeable on new commercial properties?

A

Yes.

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94
Q

Why would a seller want to exercise option to tax?

Disadvantages of this?

A

Recover input tax

Adds VAT to purchase price - unattractive if buyer cannot fully recover

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95
Q

Examples of VAT sensitive buyers (and why are they VAT sensitive)

A

Insurance companies, building societies and banks

Bcos they don’t make taxable supplies as part of their business (can’t recover input tax)

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96
Q

What should you do if acting for buyer and there is VAT included in the purchase price which they will struggle to claim back?

A

Seek compensatory reduction in purchase price or resist option to tax

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97
Q

First thing need to check when taking instructions (aside from the conflict check)?

A
  • Check what has been agreed at marketing stage
  • Check buyer has received Energy Performance Certificate (free) within 7 days of marketing (or in any event within 28 days)

(before it goes to anyone it goes to megan!)

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98
Q

Initial Qs to ask buyer client in property transaction?

A
  • degree of consensus with seller
  • any issues which anticipate may arise and cause additional costs, delay or frustration
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99
Q

What initial information should you seek when acting in property transaction?

A
  1. Details of buyers/sellers, estate agent, other side’s solicitors
  2. Address of property
  3. If any fixtures and fittings being bought
  4. Tenure
  5. price
  6. Deposit agreed?
  7. Mortgage (does the seller still have one and how is buyer paying)
  8. Anticipated completion date?
  9. Synchronisation of a related sale?
  10. Present and intended use of property?
  11. Any recent alterations to the property?
  12. Situation of property (near to railway, industrial premises, river, open land)
  13. Survey done?
  14. Anyone other than seller occupying property?
  15. Any **terms other than price **agreed by property?
  16. Viewed it?
  17. Joint buyers/equitable interest?
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100
Q

At what point should you take instructions?

A

Once a sale is agreed and at early stage

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101
Q

Under typical sale contract, what is property sold free of?

A

Incumbrances

(ie third party rights binding property)

Unless stated otherwise

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102
Q

What is investigation of title?

A

Of whether seller is legal owner; and

Whether any rights or rules which could affect its use and enjoyment

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103
Q

What documents are required for an investigation of registered title? How do firms typically obtain them?

A

Register of title (i.e. official copies)

Land Registry plan (i.e. title plan)

Usually firms have an account with Land Registry so can order via phone/online and receive next day

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104
Q

What is deduction of title and how is it shown?

A

Seller’s obligation to prove they own the property they are trying to sell

Providing documentary evidence to buyer

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105
Q

Modern practice re title deduction

(ie who provides and at what stage)

Official copies should be how old?

A

Provided before exchange of contracts

Official copies under 6 months old provided by seller at their own expenses

Buyer no right to object title after this

Copies is 6 letters. Provide from last 6 months.

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106
Q

Registered land - how are official copies set out?

A
  • Title number
  • Edition date (ie when LR last updated title)
  • Search from date (date official copy was provided)
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107
Q

What 3 things do official copies show?

A

Property Register

Proprietorship Register

Charges Register

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108
Q

What does Property register contain and what may it indicate?

A
  • address
  • title plan
  • whether ** freehold or leasehold**

May also indicate:

  1. Easements or rights and if they are subject to obligations
    ^ imp: would only contain easements if they benefit the property
  2. Certain things might expect to come with land which have been excluded from title
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109
Q

What does and may Proprietorship register contain?

A

Will contain:
- Current owners and their address
- Class of title (absolute, possessory or qualified)
- Restrictions on owners’ ability to sell

May contain:
- Price paid by current owners (if sold after 1 April 2000)
- If owners gave indemnity covenant when bought the land (evi of chain of indemnity covenants)

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110
Q

If there is a defect in a registered title under the Propietorship register, what happens?

A

State compensates in certain circumstances

Because state guarantees the title

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111
Q

Explain the three types of title to freehold land

A
  1. Absolute
    - Legal estate fully vested
    - Subject to:
    rights on the register, overriding interests and if trustee, minor interests which they have notice of
  2. Possessory
    - In possession of property but lost title deeds or claiming through adverse possession
    - as a result, will be** subject to all adverse interests in it existing from date of first registration**
  3. Qualified
    - Specific identified defect which Registrar feels can’t overlook or cured by granting absolute title
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112
Q

What are the two types of restrictions on registered freehold land in Proprietorship register?

Explain the most serious one

A
  1. Restriction
    - ability deal with property is limited (conditional) or need to satisfy condition (absolute) to register sale
    - may be absolute (eg if they can sell) or conditional
  2. Notice
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113
Q

What is identified in Charges register/what to watch out for?

A

Charges and other notices burdening the land

Will be third party rights (minor interests) and any registrable leases

Look out for:
1. Covenants (r or p)
2. Charges (usually mortgages)
3. Leases
4. Notices by TPs claiming interest
5. Easements (ONLY of the SERVIENT land)

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114
Q

What does solicitor need to check about rights (broadly speaking)?

A
  1. Sufficient rights benefitting property to allow INTENDED use
  2. Whether CONTRIBUTION required for upkeep of benefitting rights (if so, whether seller been contributing/how much)
  3. Any TP rights BURDENING the property
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115
Q

Which registers let you know easements?

A

Charges usually.
Property if LR copied and pasted lol.

Also property if easements benefit the land.

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116
Q

Which register contains financial obligations to contribute to easements which benefit the property?

A

Property

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117
Q

What is Halsall v Brizell rule?

A

Re easements

If receive a benefit of a right must also take a burden

i.e. contribute costs of maintenance

(e.g. right to driveway, you pay a bit)

(can’t pay Hazel we’ll take it away!)

Should enquire if have been contributing and if so how much

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118
Q

What should you advise client if there are exceptions for mines and minerals in the Property register?

(e.g. “There is excepted from the registration the mines and minerals underneath the property together with ancillary powers of working thereof”)

A
  • inform that means seller does not own so cannot transfer the mines and minerals / risk trespass
  • who has right and has it ever been exercised? (coal mining search)
  • Index Map search at Land Registry to check if mines and minerals registered separately (if so, help find owner)
  • Enquiries re ground stability (indicates mining in past)
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119
Q

How may landowner selling only part of their land protect their rights over the retained land?

Have a go at drafting

A

Declarations of light and air

Proprietorship register

If seller is selling part and retaining some land

May indicate intend to build on their retained land, and block out light to buyer.

Check extent and location of adjoining land.

Ask buyer if impacts their intended use of property

“IT IS HEREBY AGREED AND DECLARED that the Purchaser shall not acquire any right of light or air or other easement which would interfere with, restrict or prejudicially affect the use of any part of the adjoining land of the Vendor for building or other purposes.”

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120
Q

How co-owners of REGISTERED are assumed to own it?

A

Equitable estate as joint tenants

Unless restriction on Proprietorship register:

“No disposition by a sole proprietor of the registered estate” etc.

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121
Q

What should you do if registered freehold is co-owned as joint tenants but only one is selling? Why?

A

Enquire as to the whereabouts of the other co-owner as if they are alive, they must be a party to the contract.

If they are dead, need death certificate.

(NB this is even as JTs)

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122
Q

If tenants in common and one surviving legal owner, what must you do?

A

Another legal owner (second trustee) needs to be appointed to overreach the equitable interest of the deceased

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123
Q

If appointed second trustee for tenancy in common when one has died and purchase price has been paid, will the property be free of co-owner’s equitable interest?

A

Yes - as long as paid to at least trustees on completion

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124
Q

What are restrictive covenants?

A

Prevent land being used in particular ways and usually bind buyers

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125
Q

Which register contains restrictive covenants?

A

Charges

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126
Q

What should solicitor do where there is a restrictive covenant which buyer doesn’t want?

A
  1. Ask seller if know who owns the property which benefits.
  2. If apt, ask if can reach arrangement re proposed use
  3. Obtain restrictive covenant insurance policy
  4. Apply Upper Tribunal (Lands Chamber) for modification or discharge on grounds obsolete/no practical benefit

(may be mutually exclusive)

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127
Q

What should you consider when deciding how to deal with restrictive covenant?

A
  • Does the person with the right know about it?
  • Insurance not available if approached person with benefit of it alerting them of rights
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128
Q

What’s a positive covenant and which register does it appear in?

A

Obliges to carry out works or spend money

Charges

(if seller gave an indemnity, that will be shown in proprietorship)

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129
Q

Does positive covenant bind a buyer?

A

Technically no.

But seller can require buyer to give indemnity covenant so if they breached it, pay their losses

Often chain of this and can check if seller is bound by one as stated in proprietorship register

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130
Q

What is an unknown covenant and how would you know about it?

A

Subject to covenants but unknown if restrictive or positive and what relate to.

Charges register would show (and state that details not available when first registered)

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131
Q

How should solicitor advise on an unknown covenant?

What should a seller do?

A

(Treat as if restrictive
- indemnity, tribunals, approach)

Most cost-effective would be indemnity insurance

Ensure disclose defect in title so buyer can’t object and use as reason not to complete
(if seller)

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132
Q

Which register tells you if property subject to a mortgage and how?

A

Charges register.

Two notices
- one giving date and purpose of the mortgage
- other states who lender is

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133
Q

In addition to charges, which register MAY tell you if there is a mortgage (not always)? Why?

A

Proprietorship

Lender has prevented borrower from selling without their consent

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134
Q

Re mortgages - what does buyer need an undertaking for?

A

That seller’s solicitor will discharge mortgage immediately on completion

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135
Q

When is registration of a lease required?

A
  • Granted for over 7 years;
  • Previously unregistered but sold and over 7 years left.
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136
Q

If lease is capable of being registered (7 year thing), where should it also appear and as what?

A

As notices

On Charges register of landlord’s title

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137
Q

When will a buyer be bound by an existing lease over the land?

As a result of this, what are they considered and where should they be shown?

A

If granted OVER 7 yrs or disposition of prev unreg lease w OVER 7 years left to run
^ binds if
registered as NOTICE on CHARGES

If for over 7 years but not on charges
won’t bind but may be overriding interest if actual occupation

Parol lease binding regardless of if buyer knows or not.

In registered land, the grant of a lease for a term of more than seven years, or the disposition of a (previously unregistered) lease with more than seven years to run, requires registration
in its own right with a separate title number, but such leases are also regarded as third party interests that should be registered against the landlord’s title. Such leases are protected and will appear as notices in the Charges register of the landlord’s title.

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138
Q

If a lease is
a) for 7 years or less; or
b) equitable lease and tenant in actual occupation

will the buyer be bound by it?

A

No

But they could be enforceable as overriding interests

(nb parol lease will bind buyer whether know about it or not)

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139
Q

What is a notice over land?

Which register?

A

Entry in Charges register of the burden of an interest impacting the registered estate or charge

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140
Q

Two types of notices

A

Agreed - where registered proprietor agrees for it to be on register

Unilateral - can be entered without registered proprietor’s consent or knowledge. may not be valid or exist (not LR-approved yet).

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141
Q

If there is a notice on the Charges register, does this give the owner of it rights over the property?

A

No, may not be valid or even exist.

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142
Q

What should you do as the buyer’s solicitor if there is a NOTICE on the Charges register which don’t want?

A
  1. Ask seller’s solicitors to find out what it relates to

Then either:
a) walk away
b) refuse to proceed further until seller gets notice cancelled by LR before exchange of contracts
(bcos if is for a valid interest, won’t be able to cancel)

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143
Q

What are home rights?

A

Statutory right created under Family Law Act

Allows non-owning spouse or civil partner to occupy matrimonial home

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144
Q

Are home rights binding on buyers?

A

Only if registered as a notice on date when transfer is registered

or if unregistered land - must be class F land charge
(f for francois)

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145
Q

What should solicitor do if find a home right?

What should you deal with it in?

A

Obtain from non-owning occupier a release of all rights in the property and agreement to vacate on/prior to completion

Deal with in contract

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146
Q

What is the only way that legal title can be held by co-owners?

A

Joint tenants (meaning survivorship)

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147
Q

What should client getting interest-only mortgage do when taking out such a mortgage if want to own property at end of it?

A

Obtain an investment policy or use savings at end to pay off original loan

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148
Q

Relevant conflict of interest exception when acting for buyer and lender.

How does it vary between resi and comm prop.

A

Substantially common interest (of having land free from rubbish)

Less applicable comm prop as negotiation instead of standard terms more likely.

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149
Q

What should you check when seeing if principal private relief applies?
(for CGT)

A
  1. Garden over 0.5 hectacres
  2. Anything used for business
  3. Not lived in property for a period?
  4. UK residents?
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150
Q

What type of advice can you give about diff types of mortgages (presuming not FCA regulated and no exceptions apply)?

A

Generic. Not what most suitable for client.

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151
Q

When s 327 exemption applies, what advice can you give ?

A

recommending entering if that is an endorsement of recommendation made TO CLIENT by FCA authorised person

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152
Q

Who pays stamp duty?

A

Buyer

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153
Q

If exercising option to tax, who must notify?

A

HMRC

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154
Q

Who could you sue if restrictive covenant being breached?

A

New freehold owner or original covenanter.

Usually go for one with deepest pockets or one who can find.

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155
Q

Disadvantages of indemnity covenants

A

Can’t recover losses if other party can’t be found or no money

(Might be being sued bcos that party can’t be found/pay)

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156
Q

If enter into a positive or restrictive covenant over freehold land, how long does it last?

A

Forever

(but restrictive passes with land and positive does not)

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157
Q

What are overriding interests?

A

Bind you as owner but are not on register

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158
Q

Co-ownership, legal estate can only be owned as…

A

JOINT tenants

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159
Q

Do planning matters run with the land?

A

Yes (generally)

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160
Q

Is planning permission required for carrying out any development of land?

A

Under statute (town and country planning act) yes

But exceptions and definition makes mean not so much in praxtice teheeee

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161
Q

Define development?

what section?

(planning law)

A

s55 town and country planning act
(may need to know for sqe1)

the carrying out of building, engineering, mining or other operations (BEMO)

OR

material change of use

(either a BEMO or a material gorl)
(down the mines)

162
Q

What matters are excluded from definition of development (so no PP required)?

A

A) Only affect interior

B) Don’t materially affect external

C) Changes to use within same class

163
Q

‘Use Classes Order’ meaning

A

Statutory reference

Excludes change of use of a building within same class of use in Town and Country Planning (Use Classes Order) from definition of planning

164
Q

What piece of legislation sets out what constitutes a same class of use?

A

Town and Country Planning (Uses Classes) Order 1987

(the ‘Use Classes Order’)

165
Q

How does the Use Classes Order work?

A

Different number = different class
Different letter = same class)

e.g. E1 and E2 = different, E(a) and E(b) = same

166
Q

Main use classes in England

A

B2 - General industrial
B3 - Storage and distribution
C - Residential uses: hotels, dwelling houses, houses in multiple occupation
(checked hotels it is true)
E - commercial, business and service
(sale of food for consumption on premises)
(financial and professional services)
(retail other than of hot food)
F - local community and learning: learning and non-residential institutions and local community (inc shops selling essential goods in small premises)

167
Q

Do sui generis use classes orders require planning permission?

Give examples of SG property.

A

i.e. in a class of its own

Yes when changing from/to (unless GDPO)

Not if changing within class (i dont think)

Uses with potential adverse impact on community

Include pubs/bars, hot food takeaways, entertainment (eg cinemas)
e.g. bart grang, that chippy, the roebck

168
Q

Will change of use to another or to a mix of uses require planning permission?

A

Not if same use class
(eg both in class E)

But changes to and from sui g always require
(check)

But even if different classes, may grant automatically if GDPO applies

169
Q

Wales use classes

A

(Wales a bit neater - shops, professional, food/drink and business separate)

A1 - Shops
A2 - Financial and professional services
A3 - Food and drink
B1 - Business
B2 - General industrial
B8 - Storage and distribution
C - Residential uses
D - Non-residential institutions, assembly and leisure

170
Q

Once planning permission granted, how long to IMPLEMENT it?

What happens if you don’t?

A

Usually three years in England and five years in Wales. Specified in the PP.

If don’t, lapses.

171
Q

Once planning permission granted, when must it be COMPLETED?

A

nb diff to 3 yrs to implement

Generally no time limit and runs with the land once implemented

Rare - LPA can serve completion notice if not think take place within **reasonable time **

(no further permission if not complete by expiration date)

172
Q

What must you be wary of with planning permission - what does it not permit?

A

Breach of enforceable covenant or need for other types of necessary approval

173
Q

Which legislation provides planning permission automatically for certain matters?

A

GDPO 2015 (England)

GDPO 1995 (Wales)

174
Q

Which categories of development are granted automatic planning permission under GDPO?

(i.e. permitted development)

A
  • On area attached to (curtilage of) house e.g. extension below certain size
  • Minor operations (e.g. painting exterior or CCTV)
  • Specified changes between use classes
  • Changes from certain sui generis uses
175
Q

What’s an Article 4 direction and implication for solicitors?

A

Allows relevant Secretary of State or LPA to prevent GDPO from granting PP automatically

Solicitor - check relevant version of the GDPO to check if A4 there (enquiries of LPA which do as part of search will tell you)

ahh yes i get it so in avenham there are restrictions from GDPO applyinh

176
Q

How can LPA check if been breach of planning control?

A
  1. Exercise right to enter property; OR
  2. Serve PLANNING CONTRAVENTION NOTICE
    - Requires to provide info re operations, use or activities (/ any matter relating to PP conditions)
177
Q

Powers available to LPA if property developed outside planning control?

A
  1. Enforcement notice
  2. Stop notice
  3. Breach of condition notice
  4. Injunction

(ESBI) (Every Shop But Iceland)

178
Q

When can an enforcement notice be issued? (distinguish England and Wales)

A

England:
- appears breach to planning control; and
- expedient to issue given LPA’s planning policies for that area.

Wales
appears breach planning control ;
and reasonable prospect PP would be granted if application made
(tbh i think expedient too)

179
Q

How can an enforcement notice be issued (England and Wales respectively)? (i.e. on who, what must it say, any time frame)

A

main diff is in wales they have to warn that the action would come if don’t apply for the PP

England
- On owner, occupier or interest-holder (e.g. mortgagee)
- Becomes effective 28 days after service
- Must specify alleged breach and steps to take / activities to discontinue + timeframe

Wales
- Details of breach
- Warn further action may be taken if don’t APPLY for PP within timeframe
(usually also becomes 28 days after)

180
Q

Can you appeal an enforcement notice?

A

Yes

181
Q

When can a stop notice be used?
Why would you use it?

What other type of stop notice can be used?

A
  • Only if laready served enforcement notice
  • Would use because:
    1. EN only effective **28 days **after served; and
    2. its effect suspended if appealed

So stops breach UNTIL EN takes effect.

Temporary stop notice - lasts 28 days - gives time further investigation.

182
Q

What is a breach of condition notice?

How does it differ from EN?

A

SImilar to EN

But breach must be of a condition attached to the PP

No right to appeal

183
Q

How can LPA acquire an injunction in context of planning control?

A

apply court

prevents actual or apprehended breach planning control

Must show
- expedient (a means of achieving end)
- necessary and
- appropriate

184
Q

How long does LPA have to take enforcement action?

A

Enforcement period of (from date):

  • 4 years: operational development without PP or change use to a single dwelling
  • 10 years: all other breaches
    (inc change use non-resi)

operational development = i.e. building works (BEMO) which were done in breach of planning control

185
Q

Who is responsible for failure to comply with one of the LPAs notices and how would they be punished if do not comply?

A

Current owner (not person who acquired - so buyer would be)

Criminal offence punishable by fine

186
Q

When must you apply for Building Regulations consent?

A

Anytime you are carrying out building works
Even if don’t need planning permission

187
Q

What happens after an application for building regulations consent?

A

Inspected by building control officer

Sometimes multiple inspections

After final inspection, **local authority **issues certificate of compliance

BUT some professions (eg plumbing) can **self-certify **work so no need to involve apply local authority

188
Q

When’s building regulations consent not as much of an issue?

A

Self-certification schemes for certain trades and professions (plumber)

Certify yourself and relevant body notifies local authority

^ so don’t need to apply to local authority who will then send out a building control officer

189
Q

Who has what powers if breach of BUILDING REGULATIONS CONTROL?

(i.e. where not got the consent)

Time limits that they must bring by?

A

Local authority

  1. Prosecute
    2 years of work completed
    (Clare and Cris 2 Ps)
  2. Enforcement notice
    Require alter/remove
    1 year
  3. Injunctions
    Not time limited
    If unsafe

^ carries to buyer. insurance covers cost of complying with enforcement.

190
Q

How can a buyer ensure building regs complied with?

A

Pre-contract searches and enquiries, inc:

  1. Enquiries of buyer
    - any works carried out?
    - was consent obtained?
  2. CON29
    - will reveal:
    - details of building regs consent; and
    - certificates granted
191
Q

What should a buyer do if building regulation consents not been granted?

A
  1. Ask seller to get REGULARISATION CERTIFICATE from local authority
    - lists work required to bring to standard
    - (not in txtbook) but could ask them to get it up to that standard
    - ; or
  2. Insurance
    :( not ideal - only covers cost of compliance with regulations if LA brings proceedings
    doesn’t solve root cause
    so no protection for personal injury or business disruption caused by building issue.
192
Q

Listed building - what does it include?

A

Object/structure fixed to building or in area surrounding building (curtilage)

And which has done so since 1 Jul 1948

193
Q

What is required to __,___ and __ a listed building?

What makes it harder to get?

A

Grades 1, 2 and 3.

Listed building consent

To demolish, alter or extend building

May need even if PP not required

Harder to get the higher the grade

(NB sometimes need to apply for PP as well)

194
Q

What can listed buildings be exempt from?

What must do if exempt?

A

Certain GDPO classes of permitted developments

Would need express PP from local authority required

195
Q

What are conservation areas and where would you find out if is in one?

A

LPAs designate - desirable historic interest, character or appearance

LLC1 or CON29 results

(LLC sounds like Lucy)

(in grims lots of Ls and Cs)

196
Q

What is deemed to be part of a buildings character and therefore protected in conservation areas?

A

Pretty much everything - all features, listed or otherwise (including property)

(basically its harder to make changes to property if conservation area)

197
Q

Effect of being in a conservation area for clients?

A

More difficult to make changes to property.

Includes:
- Changes to external may require PP when not elsewhere
- Demolition or substantial demolition of building require PP
- Inform LPA 6 weeks before work planned to a tree

198
Q

First step in investigating what appears to be unregistered land?

A

Check whether land already registered or subject of pending application for first registration

199
Q

What may a third party have lodged against a first application for registration?

What happens if you later try first registration?

A

Caution against first registration
(ie warning they have an interest (e.g. easement) in the land)

Then - LR will ‘warn off’ cautioner - give period to establish right

If can’t, they lose their rights and registration proceeds

(i guess its like a notice but for unregistered land)

200
Q

How do you prove title in unregistered land and who proves it?

A

Title deeds

Seller (usually before exchange) - hands over original on completion

201
Q

On completion of sale of PART of unregistered land, what does buyer’s solicitor do with title deeds?

A

On completion, buyer’s solicitor examines originals against copies they received prior to exchange to check if same (verification of title)

Seller keeps the originals and buyer keeps copies

202
Q

Sale of PART of unregistered land - how is it shown?

A

Memorandum of sale of part marked on original deed

203
Q

What do title deeds consist of?

A

Usually conveyances, mortgages, assents, deeds of gift and land charge searches

204
Q

What must seller’s solicitor do upon first receiving title deeds for unregistered land?

clue; register

A

Check if any of the past transactions should have triggered first registration
(don’t need to know what transactions)

If yes, register (buyer’s lender require before purchase)

205
Q

Step 2 for seller’s solicitor upon receiving title deeds in unregistered land?

A

Find the document which would be a good root of title

(could be multiple capable docs but pick most recent)

Can then ignore all other docs - unless it refers to TP right in other doc

206
Q

What is epitome of title, inc who prepares and when?

A

Unregistered land

Seller’s solicitor

After deduced title, prepare epitome of title -

ie schedule all docs from root to present day, with the docs attached

207
Q

What legislation sets out requirements for good root of title?

A

s44 LPA 1925

208
Q

Requirements for good root of title

A
  1. Over 15 y/o;
  2. Deals with legal AND equitable estate;
  3. Recognisable description of the land;
  4. Nothing to doubt seller’s title (e.g. stamping defect or invalid execution - signed, sealed, delivered).

(s44 LPA)

209
Q

What tends to show good root of title?

A

Conveyance (preferable) or legal mortgage

If neither, then deed of gift or assent

210
Q

What should a solicitor look for in the conveyance itself of unregistered land to determine if the seller is a legal and equitable owner?

A

Para beginning “WHEREAS”

“for an estate in the fee simple and is selling the same to the purchaser”; AND

Conveyed as “beneficial owner…unto the purchaser”

211
Q

What should you look for across the title deeds for unregistered land?

A
  • UNBROKEN CHAIN of ownership
  • Stamp duty paid if pre December 2003
  • Incumbrances - covs/easements
  • Each doc properly EXECUTED
  • Land charge searches to check if incumbrances are actually binding
    (some, inc restrictive covs, only bind unreg if registered as land charge)
  • Root of title
  • Recognisable DESCRIPTION of land
212
Q

What should you look for in terms of stamp duty when investigating title deeds for unregistered land?

A

if in doubt, textbook says v complicated so practitioner’s text should be consulted

pre-Dec 2003 (then SDLT)

i.e. ad valorem stamp duty - varried according to price

check correctly paid

Would be stamped to say paid

or if below certain value, certificate of value inc in conveyance
(to show reduced rate or didn’t neeed paying)

Not payable on mortgages after and deeds of assent from certain dates, provided deed contained certificate

also, certain docs which had to go to Inland Revenue, got particulars delivered PD stamp on them
- without, not propertly executed

213
Q

What should you look out for in title deeds as sign of an incumbrance in unregistered land?

What should you do as buyer’s solicitor if appears to be an incumbrance?

A

EXCEPTING AND RESERVING

SUBJECT TO

If incumbrance referred to, allowed to ask for it (even if pre-dates title)

214
Q

How to ensure docs are properly executed in est title unregistered land (inc relevant section)?

who signs?

A

Check executed as deed

s1(2) LPMPA 1925

  • in writing
  • clear it’s a deed
  • signed by grantor of interest
  • witness attesting the signature
  • delivered as a deed

Before 31 Jul 1990, had to be SEALED by maker
(used to be signed sealed delivered pre 90s lol)

215
Q

When will a buyer sign a conveyance?

A
  • Holding on trust; or
  • Giving a new covenant over the land

cos of trust, co-owning buyers should sign

216
Q

to bind a) unregistered land and b) registered,
encumbrances must be what ?

A

A) Recorded at Land Charges Department (Central Land Charges)
*only some incumbrances but always restrictive, easement, estate and home right)

B) Registered in title to property with Land Registry

217
Q

How should buyer’s solicitor conduct Land Charge search in unregistered land?

Including what form?

A
  • Search against EACH estate owner named in epitome
    (even if their ownership pre-dates root of title)
  • Search on K15 form for period owned land for
  • Can rely on searches done by others previously
    (good practice cos fees!)
  • Check names spelt right via accompanying docs
218
Q

Unregistered land - where are easements usually contained?

A

First main paragraph of conveyance

219
Q

Where are restrictive covenants contained unregistered land?

A

Conveyance (near the start)

220
Q

Where do positive covenants appear unregistered land?

A

Conveyance near the start where conveying to buyer

221
Q

Do indemnity covenants apply in unregistered land?

A

Yes

222
Q

Where would unknown covenants be contained for unregistered land?

A

May be apparent on the conveyance

223
Q

How will you know about a mortgage in unregistered land?

A

Would be one of the title deeds in epitome of title

224
Q

Where is a lease indicated unregistered land?

A

The deed for the lease should be one of the title deeds

225
Q

What is a parol lease and is it binding on buyers?

A

Not made by deed but orally/in writing and certain conditions

Binding whether know about it or not

226
Q

What’s the double guarantee in unregistered land for root of title?

A

That the title has been investigated for at least 30 years

(ahh yes i get it so if the person before u has looked back for 15 years and u looked back for 15 years!)

227
Q

Quite surprising things actually that seller not have to disclose to buyer

A

if had planning permission for extension

problems with neighbour re who owns and maintains fences

physical defects in property

228
Q

When could buyer most commonly bring negligence claim against solicitor?

A

Not done relevant enquiries and searches AND SUFFERED LOSS

229
Q

List the searches and enquiries that will be relevant to every property?

A
  1. Survey and personal inspection
    (d and l will help!)
  2. Local search
    (nisa local)
  3. Water and drainage search
    (plumber)
  4. Pre-contract enquiries of seller
  5. Environmental searches
    (c is at env agency)
  6. Flood search
    (plumber again)
230
Q

Solicitor’s advice re surveys

A

Homebuyers’ valuation and survey - cheaper but less detailed.

If concerns/intend alter, full structural survey

(don’t do homebuyers first, straight into full structural)

Personal inspection by solicitor - but client may not want to pay - rare in resi

Lenders require valuation survey

231
Q

What constitutes the local search?

A
  1. Local land charge search (compulsory on sale/purchase)
    (LLC1)
  2. Standard enquiries of the local authorities (compulsory) (CON29)
  3. Optional enquiries of local authority (CON29O)

(nb can also raise specific Qs eg re proposed view)

232
Q

What form for local land charges search?

What will the search tell you?

A

LLC1 form

Financial charges

Restrictions on land imposed by public authorities under statute

e.g.
- Planning permissions (same as CON29)📝
- Tree preservation orders 🎄
- Smoke control orders (issue if open fireplace) 🔥

llc1 lucy. smokey. <3 the trees. <3 consent!

233
Q

Form for standard enquiries of local authority?
And what what will you find out?

A

LLC1 = burdens/breaches mainly
CON29 = certificates/permissions - future, past, present

CON29 form
(con back again - standard 29 y/o )

building regulations consents and certificates granted
Planning permissions, ☑️
Permitted development restrictions, inc article 4 ❌
Contaminated land 🤮
Liability for road repair (hopefully LA!)🚧

(does pp as the day job)
(probs is contaminated)
(and repairs roads)

234
Q

When would you make optional enquiries of local authority and form?

A

Local area dependent
e.g.
environmental and pollution notices
common land

CON290 form

younger. v common 69. youth = env’t and pollution concern!

NB, for ALL the common searches:
- only cover land itself - so if buyer is attracted to house due to view - make specific enquiries

235
Q

What should a solicitor consider in addition to the three usual land charge searches?

A

Specific enquiries
(since other searches only cover the land itself)

e.g. if attraction is view, specific enquiries re whether intent to build

236
Q

Who do you enquire re drainage and water search?

What form?

2 diff types of form ?

A

Statutory undertaker - usually water company

CON29DW - residential
Commercial DW - comm

(con 29 said don’t worry about the water bbe x)
(comm said DO worry)

237
Q

What would you want to find out in water and drainage AND highways search?

A

If statutory undertaker ‘adopts’ them and therefore responsible

If connected to public sewer for drainage / public water supply.

If not, liable costs maintaining and bringing up to adoption standard if water authority decides to adopts (same for highways)

238
Q

Typical enquiries pre-contract buyer to seller

A

Had disputes regarding property
Any TPs occupying?
Compliance any covenants
Planning permission?
Boundary maintenance issues
VAT payable (if commercial)

239
Q

Most common environmental search and why search is important?

A

Desktop search (standard/online - looks at plans of area, info published by LAs and the EA)

Mainly cos can be liable for clean up costs

Do specialist environmental survey by surveyor if identify contamination risk
(or consider insurance)

240
Q

What should you do if searches/surveys identified contamination risk?

A

Specialist environmental surveyor survey

They can suggest how to clean up land

Or consider insurance against environmental liability instead

241
Q

When is a flood search important?

A

Every purchase good practice

Residential can usually get flooding insurance but not commercial

Caveat emptor = most sellers won’t reply

242
Q

How to conduct flood search?

A

Environment Agency free screening search and flood indicator on LR website

For property-specific go to commercial providers - surveyor and/or consultant who produced report should interpret

Solicitor look out for insurance rates

(rib floods and c used live now at ea)

243
Q

List the searches and enquiries for specific properties/transactions

A
  1. Chancel repairs search⛪️🔔
  2. Mining searches ⛏️
  3. Canal and river trust search 🛶💧
  4. Commons search 🚶
  5. Railways 🚂
  6. Highways 🛣️
  7. Unregistered land searches 👵
  8. Company search 🧐
  9. Bankruptcy search 💰
244
Q

When should you do a Chancel repairs search?

A

If a C of E parish; and
- Property unregistered; OR
- Registered but previously sold for value before 13 October 2013

Note: may be cheaper to just get insurance against liability

245
Q

Purpose of a Chancel repairs search?

A

Identify potential liability to pay repairs to the chancel of a Church of England Parish Church

246
Q

How to do a Chancel repairs search?

A

Get a commercial provider to do it

247
Q

Purpose of a coal mining search (or other types of mining in some locations)?

A

Establish whether property in coal mining area
and if there has been a claim for subsidence

i.e. ground under building sinks or collapses

If claim already paid off may prevent future claims being made
(not ideal for client if wants to bring one)

248
Q

Where is mining search especially important?

A

Every property in coal mining area
Mines and minerals reservations in title

249
Q

How to conduct a coal mining search?

A

CON29M form to Coal Mining authority

(mostseem to be con but just pop an m on for mining)

250
Q

Purpose of Canal & River Trust search?

A

Est liability for maintenance of waterways banks and towpaths

251
Q

Where is Canal and River Trust search esp imp?

A

Adjacent to canal or river

252
Q

Purpose of Commons search?

A

Check property is not subject to common rights - ie rights of third parties

e.g. rights to pasture

Which also prevent what you can do with the land

253
Q

Where is commons search esp imp and why?

A

Where property adjacent to open land

eg greenfield site or adjoining village green

May prevent current enjoyment or intended future use/development

254
Q

How to make a Commons search?

A

Raise enquiry 22 in CON290 form during local search

255
Q

Purpose of railways search?

A

Establish liability for boundary maintenance (separating property from line)

and any restrictions on use

256
Q

How to make a railway search and when?

A

No specific search

  1. Ask seller
  2. Advise client to** approach Network Rail** for any specific proposal
  3. Search existing and proposed railway undertakings to see if impacted (e.g. HS2) and tell buyer
257
Q

Purpose highways search (and when)?

A

Establish whether verges and pavements are** publicly maintainable**.

If not, enquire seller re maintenance costs.

Also to establish third party ownership of land between road and property

  • to check if need an easement to get to land
258
Q

How to do a highways search?

A

Send plan to relevant highways authority and ask them to mark the publicly maintainable highways (which includes pavements and verges) onto it

259
Q

Purpose of index map search?

A

ALWAYS unregistered

Confirms it is all unregistered, not pending registration or caution against first registration.

Also may help find owner of TP rights.

260
Q

What searches unregistered land specifically need, including form for first one and what against for second?

A

Index Map Search (SIM)

Land Charges Department search against:
- seller; and
- all previous estate owners

261
Q

Where is Index Map search esp imp?

A

Property appears unregistered; and/or

Mines and minerals reservation in title

262
Q

Purpose of Land Charge search?

A

Identify if certain types of incumbrance (TP rights) been protected by registration so binding on buyer

263
Q

How to make Land Charge search?

A

K15 form to Land Charges department

264
Q

How and when to do a company search?

A

Online app to CH

To check any fixed/floating over property

Seller is a company

Before exchange and another before completion

As close to completion day as possible
- as will be bound by any charges over land on completion day because no priority period

265
Q

Why do a companies search?

A

Check capacity, signatories and charges against the company before buying

inc fixed and floating charges secured over property

266
Q

When to do a bankruptcy/insolvency search?

A

Whenever acting for lender

Always pre-completion

Some firms do before excahnge

267
Q

Names for and how to bankruptcy/insolvency search for lender against buyer?

A

Individuals:
Registered title - K16 to Land Charges dept
Unregistered - K15 (already making search against seller - so just add buyer’s name to it)

Companies: Company Search on CH
(check any charges)

268
Q

How to make index map search?

A

SIM form to Land Registry

269
Q

How can solicitors use ___ Land _____ Service for searches and what does it offer?

A

Register with a channel

NLIS searches with its providers (Land Registry etc) and consolidates results

Alternative to doing all the various searches

270
Q

When would you find out if another occupier in the property and what should you do?

A

Title investigation

Obtain release of all rights in property and agree in contract to vacate on completion

271
Q

If not sure whether falls within GDPO exceptions, what could you do?

A

Request Certificate of Lawfulness of Proposed Use

272
Q

Land Charges Register - who do we search against and when do we search from?

What form?

What if any doubt in when owned it?

A

Unregistered land.

K15.

Previous estate owners (revealed in epitome)

Search for years that they owned the land.

**Search from 1926 **if any doubt over years of ownership

273
Q

How are pre-printed contracts divided?

A

Page 1:
- Description of property
- Terms of sale

Page 2:
- SCs/SCPCs
- SCPCs can be Part 1 or Part 2
- Part 1 is longer and applies unless excluded

Page 3:
- Special conditions
- Pre-printed suggested at top
- Blank space to draft own

274
Q

What is purpose of a deed and contract respectively in property transaction?

A

Deed - transfers the land
Contract - promise to transfer land at later date

275
Q

When would you DEFO want a contract in property transaction?

A

Delay before completion will take place
(usually practical e.g. booking removal company)
Fix obligations e.g. on seller to do certain work before completion

276
Q

What must ____’s solicitor decide between when first drafting contract?

A

Seller
Whether to use a pre-printed form or draft in firm’s preferred style?
(e.g. Westlaw or own precedent)

277
Q

What should all property purchase contracts (whether pre-printed or firm style) include?

A
  • standard conditions (SC or SCPC)
  • details of property
  • financial terms
  • any special conditions
  • any specified encumbrances
278
Q

What are the two types of standard conditions?

A

Standard Conditions of Sale (SC)
Standard Commercial Property Conditions (SCPC)

some v simple Comm Prop use SC
e.g. empty, straightforward title and low price

279
Q

What will contract need to state for a registered property specifically?

A

Title number and class of title

280
Q

How will contract refer to title in unregistered property?

A

Refer to root of title

281
Q

What should be contained under list for ‘specified incumbrances’ in contract?

A

Any TP rights which will pass on transfer and not covered by SCs or SCPCs

Inc:
- obligations contribute shared facilities
- restrictive covenants
- easements
- positive: technically don’t need since don’t pass but many inc anyway.

Don’t include mortgage unless will pass on completion.

In practice - usually include all (even if covered by SCs/SCPCs).

282
Q

Rights of buyer if incumbrances not stated in contract?

A

Rescind contract and/or bring damages

283
Q

What incumbrances are properties sold subject to in SC and SCPC?

(i.e. free of all incumbrances OTHER than these)

A

Both say property subject to following incumbrances:
- specified in contract
- discoverable by inspection before contract date
- seller does not AND could not reasonably know
- Public requirements
(just state public requirements)

SC only:
- those, other than mortgage, which buyer knows about
- entries made before in public register before contract in public register, other than CH, LR and Land Charges Dept

SCPC:
(same concept but state differently)
- matters other than mortgages, disclosed or would have been by searches and enquiries which prudent buyer would have made before entering
(prudent comm)

284
Q

Should positive covenants be listed as specified incumbrance?

A

technically bcos don’t run (so some solicitors don’t)

but most do
- defo should if mixed with the entry for restrictive covenant in charges register

285
Q

Two types of title guarantee and when should you use each?
Any others options?

A

FULL title guarantee
if own entire legal and equitable

LIMITED
if limited knowledge of proeprty
(e.g. trustee)

Or give NO title guarantee e.g. appointed following insolvency/second trustee

286
Q

Full and limited title guarantee in CONTRACT:

What do you impliedly covenant by giving this title guarantee for BOTH types of title?

A

For full AND limited

IMPLIEDLY covenant that:

  1. Right to dispose land
  2. Do all reasonably can to transfer title
  3. If selling leasehold - lease continues after transfer and no breach making liable to forfeiture
287
Q

What is the contract rate and how is it worked out?

i.e. what is the percentage and what is it on

A

Rate of interest if either party late in completing

Law Society Interest Rate from Time to Time Enforced: 4% above Barclay’s base rate

(this is in standard conditions)

Of the PP minus any deposit paid if buyer’s fault

(2-4% normal range - can’t be too high cos then penalty clause)

288
Q

If selling with FULL title guarantee, what do you impliedly covenant?

Vs

LIMITED?

(as well as the ones for both)

A

FULL:
Free from incumbrances other than:
- those did not and could not reas know about
AND
- those which disposition (contract?) made subject
- buyer knows about at time of disposition
- on registers at time of disposal

LIMITED:
Not incumbered property since last disposition for value and not aware that anyone else has

289
Q

Can seller ever recover buyer’s deposit?

A

Yes - if they fail to complete

290
Q

How much deposit should buyer pay? (default)

A

10%

291
Q

Who retains deposit? How long for? As what?

(default/standard conditions)

A

Solicitor’s seller as STAKEHOLDER

Between exchange of contracts and completion

Means seller’s solicitor can’t hand to seller until completion.

BUT under SC - seller can use for deposit on related house purchase

292
Q

How can parties vary default rules under standard conditions re deposit?

A
  1. Reduced deposit
    e.g. 5%
    (risk for seller if delay bcos less to retain - should probs require buyer to top up to 10% if delay)
  2. Deposit held by solicitor as AGENT instead of stakeholder
    = can release immediately
    (risk not complete that not return it)
293
Q

When and in what form is deposit paid?

A

On exchange of contracts (if exchanging)

SC - electronic means or cheque
(think of all the resi 👵 )

SCPC - electronic only

Both need to be from and into name of conveyancer
(or if deposit related purchase, nominated conveyancer)

294
Q

What are the main pre-printed special conditions?

A
  1. Does sale includes any contents or exclude any fixtures?
  2. Vacant possession OR any leases?
  3. If agreed to alter completion time
    (usually happens at 2pm on the agreed day)
  4. Will not rely on representations other than those that are written
    (eg something said at marketing stage)
  5. If non-owning adult occupier who agrees to leave on sale and release their rights
295
Q

What kind of things might parties incorporate new special conditions for (not covered by standards)?
Imp !:)
drafting

A
  • Appointing second trustee
  • Seller obtain/pay for restrictive covenant insurance
  • Disclose title defect
  • Selling with limited or no title guarantee
  • Deposit less than 10% or to agent
  • VAT payment
  • Removing fixtures
    e.g. seller responsible for damage and timing
  • Including indemnity covenant
296
Q

When would you want an indemnity covenant?

A

POSITIVE covenant

And u are either original covenantor or have signed one to previous seller

Indemnity = positive
Insurance = restrictive

297
Q

Where should indemnity covenant be included in contract?

A

SC and SCPC state:
if seller ongoing liability of positive covenant then buyer must give personal indemnity covenant

So no need express special provision
(but sometimes do anyway)

298
Q

Who does risk to damage to property go to on exchange of contracts?
Implications of this? (default)

A

Buyer

So should get insurance in place from this point

299
Q

Requirements for buyer’s insurance (after exchange)? Who may be able to assist?

A

Buyer and lender satisfied insurance adequate

If mortgage, lender may insure on solicitor request

300
Q

When would damage risk stay with seller after exchange and if so, what should they do?

A

If parties agree.

If so, maintain insurance until completion.

Any damage - pay insurance proceeds to buyer or assign the buyer their rights under policy

301
Q

What happens if two insurance policies in place at once (i.e. buyer and seller) for same property?

A

Danger one claim made then buyer’s insurer reduce proceeds because another policy exists

When this happens, under standard conditions the purchase price is reduced according to amount that they won’t pay out to buyer

302
Q

What is stance on VAT in SC (resi standard conditions)?

A

Purchase price and contents price is inclusive of VAT
(since expected is not)

303
Q

Three options for dealing with VAT in contract for sale of commercial property?

A
  1. VAT chargeable on sale and will be added to purchase price
    (new or old but opting)
  2. PP includes if any VAT and won’t add any on
  3. PP includes VAT but can add if law change between exc and comp
    - ie exempt supply becomes standard rated

(would need to pay on top of PP between exchange/completion)

304
Q

What happens if seller excludes VAT but law changes and supply that used to be exempt becomes standard rated?

A

Has to take the VAT out of the agreed purchase price

:(

305
Q

How would you incorporate your chosen method of VAT in contract for comm prop?

A

SCPCs = VAT excluded

Can amend:
1. VAT included
- use SC (usually only if not that complex); or
- special condition

  1. VAT exc so can add only if law change
    - SCPC but incorporate one of standard conditions
306
Q

Requirements of lenders?

A
  • First legal mortgage over property
  • Valuation usually
  • General conditions for loan (sent via mortgage offer etc)
  • Certificate title
307
Q

What do lenders use to set out terms of loan and when do they do this?

A
  • Mortgage offer (resi and simple comm prop); or
  • Commitment letter and **term sheet **followed by detailed **facility agreement **
    (complex agreements)
308
Q

What details do lenders send to borrowers?

A

Loan amount
Interest rate
Term
Initial repayments
Any other conditions e.g. must carry out repairs

309
Q

Issues if conditions attached to mortgage? (e.g. repairs)

A

Lender can retain mortgage advance until works done

Means may need to find sum for advance elsewehere

310
Q

Can a lender withdraw offer if accepted?

A

Yes - as long as mortgage offer specifies this

311
Q

How do lenders get first legal charge over property? (formalities)

A

Mortgage must have made by deed (so legal) and completed by registration

312
Q

Where can conveyancers find instructions which apply to most lenders?

A

UK Finance Mortgage Lenders’ Handbook

Instructions for individual lenders (usually resi)

(inc matters a specific lender will lend for, required searches)

313
Q

What should solicitor do if representing buyer AND lender and conflict arises regarding release of mortgage funds?

A

Can’t continue and release lender’s funds until resolved to lender’s satisfaction

(makes sense cos is their money!)

314
Q

Resi - what does certificate of title confirm to lender? What format satisfies?

A
  1. No legal probs so can safely lend against (good marketable title)
  2. Who will own after sale
  3. Completion date when funds required for

Form approved by Law Society and UK Finance

315
Q

COMMERCIAL transactions:

If resi certificate of title not detailed enough, what could be used? Who prepares it?

A

Produced by City of London Law Society

Prepared by buyer’s solicitor

(nb prepared by buyer because buyer gives to lender)
(think of it as commercial - lond0n)

316
Q

When are certificates of title given?

A

Immediately prior to completion of loan

However will do drafts at earlier stages and buyer’s solicitors not exchange until lender satisfied

317
Q

Comm prop certificate of title should include

A
  • report about property
  • info obtained by:
    A) title investigation; and
    B) pre-contract searches and enquiries

(as well as resi stuff - ie good/marketable title, who will own, completion date)

318
Q

What could lender do if solicitor preparing certificate of title gets it wrong in comm prop?

Draft the clause

(drafting)

A

Sue cos warranties for correctness of info

“Subject to any disclosures, in our opinion, subject to due REGISTRATION at the Land Registry of the transfer of the Property from the seller to the Company, the Company has a GOOD AND MARKETABLE title to the Property.”

(not will have. has.)

319
Q

Before ready to exchange, what must solicitor provide client with and what should it contain?

A

Pre-contract report, which inc:

  • results of title investigation and searches and enquiries
  • explains terms of
    a) contract; and
    b) mortgage offer
  • Disclaimers
    e.g. can’t advise on value or structure
320
Q

Do you need contracts in property transaction?

A

No

321
Q

What should you do if chattels are to be included in transfer?

Pre-printed?

A

Special condition included

Can use the pre-printed special conditions contained in the standard conditions

322
Q

what does City of London Law Society’s form include and how is it set out?

A

series of statements which either:

(i) solicitor does not change/disclose against and so warranting to be true

(e.g. example, there are no rights of way crossing the property); or

(ii) are not true so the solicitor discloses
(e.g. is right of way crossing the property) against the statement.

Showing title good and marketable subject to disclosures.

Statements can’t be altered.

323
Q

What must you check before contracts exchanged?

A
  1. Pre-contract report to buyer
  2. Report to lender
    (Law Soc / UK Finance)
  3. Deposit in cleared funds
  4. Mortgage offer accepted and conditions complied and buyer sufficient funds completion
  5. Insurance in place
  6. Contracts signed
    - if u are signing, need client authority to sign
    - client often signs (usually wet ink but can electronically)
  7. Completion date decided
324
Q

What must report to lender ultimately show?

A

Good and marketable title

325
Q

Requirements for contract in transfer?

A
  1. In writing
  2. Incorporates all agreed terms
  3. In ONE document or each copy if exchange (usually exchange)
  4. Signed

(writing, one, signed, terms) WOST

326
Q

Best form of contract exchange - why?

A

Over phone. Quick, reliable, cheap.

kmthrutheph u are the best form 📞

327
Q

How can contracts be exchanged over phone and how is this protected?

A

Law Society Formulas A, B and C followed

All involve undertakings and disciplinary action if breach.

328
Q

What happens under Law Society Formula A?

A
  • ONE solicitor holds BOTH signed contract copies
  • Same day, send their client’s signed part o/s via FC post/doc exchange/hand 📩🤝👋
  • Buyer’s solicitor pays deposit via banker’s draft or client account cheque
  • If sending electronically, need to amend formula and make note

(BOTH - heady ONE)
(same day flyin out)
(told my gyl its a draft or its a cheque)

329
Q

What happens Law Society Formula B and its main advantage?

A
  • One solicitor holds THEIR client’s signed part

(as for A:)

  • Both undertake same day to send signed dated to o/s by FC post/doc exc/hand
  • Buyer’s solicitor pays deposit via banker’s draft or client account cheque
  • If sending electronically, need to amend formula and make note

Quickest - nell quick on le runs

(nel and B - b holds his client)
(undertake to look after by fc post, doc exchange and hand)

330
Q

Procedure for Law Society Formula C and disadvantage?

(i.e. when is it used and what must do)

A

Synchronises all exchanges where residential chain

File note recording fact of exchange:
- Date and time
- Formula used
- Completion date
- Deposit
- Identities of solicitors

Complex so rare

(C for Chunkz/C for Chain)
(chunkz in sync)

331
Q

Who holds title between exchange and before completion?

A

Legal - seller
Beneficial - seller on behalf of buyer

332
Q

Who must solicitors do immediately AFTER exchange?

A

Inform respective clients and TPs
(e.g. lender and estate agents)

Send signed/dated contracts with completion date inserted to o/s

333
Q

When to date CONTRACT?

A

Once fully exchanged like we are exchanged

(so like the solicitors on the video)

So do not date the draft contract !!!

334
Q

Correct SCPC and SCs for VAT

A
  1. PP exc VAT and VAT added on top (SCPC Part 1 Condition 2)
  2. PP inc VAT and can’t add (same as resi) (SC Part 1 Condition 1.4.1)
  3. PP exc VAT - add only if law change make exempt supply standard rate (SCPC Part 2 Condition A1).
335
Q

When are variations required for Law Society formulas?

When will be sending electronically?

A

Changing completion date

Sending electronically

Not sending by FC post or DX

nb if states using SCPC (comm prop even tho resi), then will be sending electronically

336
Q

Diff certificates of title for resi vs CP

Diff between them?

A

Resi - approved by Law Soc and UK Finance
- just show GOOD and MARKETABLE title

CP - City of London Society Cert of Title
- contains pre-contract searches, enquiries AND g/m title

337
Q

Who prepares transfer and in what format?

A

Buyer’s solicitor

Deed

If registered, must comply with LR. requirements
(ie TR1) (also use TR1 if first registration)

(think maybe we are at final hurdle and I want to go through so I prepare)

338
Q

Who executes transfer deed?

A

Seller

And buyer as well if enters obligation or makes declaration

Inc:
- entering indemnity
- holding on trust (e.g. co-owners)

339
Q

What is the purpose of pre-COMPLETION searches?

A

Check nothing adverse to property (encumbered e.g. covenants) or seller (bankrupt) since exchange

And protect buyer if has

340
Q

How do you obtain information about a property’s title pre-completion?

Registered vs unregistered

Name of searches.

A

Registered - Land Registry search against title number - OS1 (whoel) or OS2 (part)

Unregistered - central land charges search - K15
(not K16 - that is reg bankruptcy individual).

341
Q

What do pre-completion title searches confer?

A

Priority period during which no other entires may be registered.

Except CH search.

342
Q

When should you do pre-completion bankruptcy search (and why then)?

A

Close to date of completion as possible

(because provide a priority period)

(If v high value, can ring Registry of Winding Up Petitions on completion day)

343
Q

Who sends completion information form?

Who completes it?

What is contained?

What form usually?

A

Buyer’s sends to seller’s solicitor

Seller’s solicitor completes

Confirm practical arrangements, inc:
- arrangements for keys 🔑
- place and method completion 🏫
- amount payable on completion 💸
- docs to be handed over on completion 📜

Form TA13 for resi usually.

344
Q

What should buyer’s solicitor send to client and any lender before completion?

A

Lender: Certificate of title and request for funds

Buyer: Completion statement
(essentially the bill you need to pay for various aspects of the sale)

345
Q

How can completion take place (methods)?

A

HP. The day I complete i might even have HP.

Hand 🖐️
(office - already been executed, checking and handing over docs/arrange release keys)

Or post - quicker 📬

(using Law Soc Code for Completing by Post)

346
Q

How long for buyers to pay any SDLT or LTT?

A

Within 14-30 days of completion

347
Q

How long to register new charge with Companies House and who by?

A

Lender’s solicitor

21 days post completion

348
Q

Time periods for registering mortgage post-completion?

A

Registered - priority period (from pre-completion search)

First registration - within 2 months

If BORROWER is company - lender CH in 21 days

349
Q

Solicitor’s (both sides) main responsibilities pre-completion?

A
  • Prep transfer deed
  • Pre-completion searches
  • Practical arrangements
  • Ensuring finances in order
350
Q

When is transfer deed deemed to be delivered?

A

On execution
(i.e. signed/formalities complied - guessing even tho not dated)

provided clear that intends to be a deed

Can rebut via contrary intention
(state in covering letter that not intend come into force yet)

351
Q

Who sends transfer deed and when?

A

Usually buyer immediately after exchange

Straightforward resi - seller may prepare and send in pre-exchange package

352
Q

What form of deed used to transfer title?

A

Registered (or first reg) - TR1
Unregistered - Land Registry Transfer form usually (can also use conveyance)

353
Q

Deed formalities

A
  • SIGNED by parties
  • makes CLEAR is a deed
  • DELIVERED
    -witnessed

(SCD)
- signed, cleared, delivered I’m deed.

354
Q

How can a transfer deed be executed?

A

Individual - signed and INDEPENDENTLY witnessed

Company (in co name):

  1. Company seal according to articles

“Executed as a deed by affixing the common seal of [] in the presence of: “

  1. D and Sec or 2 Ds, provided states “by company”

“Executed as a deed by [name of company]
acting by a [director and its secretary]”

  1. 1D + W

“Executed as a deed by [name of company]
acting by a director
in the presence of:
___
Name
Address

355
Q

What must transfer deed reflect?

A

Terms of contract and title deeds

(e.g. use to check title number, completion date, correct names)
-title number
- completion date
- buyer’s address for service
- purchase price in figures AND words, and any vat
- full or limited title
- joint tenants/TiC/trust?
- any additional provisions (eg indemnity)
- signature of seller
- signature of buyer if indemnity

356
Q

How should purchase price be written on transfer deed?

A

Figures as well as words

State any VAT

357
Q

How long is priority period for registered land (and what does this mean)?

inc to the hour

A

30 working (!!) days from search result

Protected any subsequent entries provided submit registration application by 12 noon on last day

358
Q

Who should application to Land Registry for priority period / pre-completion be in name of?

A

LENDER

if is one

359
Q

What is priority period for pre-completion search in unregistered land?

A

15 WORKING (!) days from date of result

Free of any other entries provided takes place during final 15th day

(and on a K15!)

360
Q

When would you not do another land charges search pre-completion for unregistered land?

A

Completion happens within 15 working days of last search

(still got priority period from pre-exchange search)

361
Q

Forms for unregistered and registered pre-completion title searches?

What forms does results come back on?

A

Registered: send on OS1 or OS2 (if part of land)
Result on OSR1 (or OSR2)

Unregistered: send on K15
Result on K18

362
Q

When would you do bankruptcy search against seller? what form?

A

seller is individual with title to unregistered land

K15

NB if individual and registered usually no point cos statute means still get good title
But can if high value or solvency concern

363
Q

What will seller be asked to confirm on completion information form?

A

Arrangements handing over keys🔑

Place and method of completion 🏢

Docs to be handed over 📑

Exact amount payable 💸

364
Q

What undertaking is provided on completion information form (TA13)?

A

Seller undertakes to discharge mortgage using completion money.

Buyer usually asks to do and send evidence soon as received from lender (cos hard to discharge immediately)

(just tick the box on form saying yes)

365
Q

What must lender be sent before completion to show finances in order?

A
  • Certificate of title (good security)
  • Solvency search against borrower
  • OS1R (reg land search result)
  • Executed but not completed mortgage deed
366
Q

What must BUYER’S solicitor do pre-completion to ensure financial arrangements?

A

Send client Financial Statement
(shows anything due - balance of PP, SDLT/LTT, legal fees, LR fees etc)

Check received mortgage money from lender and PP money from buyer

Then send balance PP to seller’s solicitor and let them know On my way!
(once received, seller will contact and completion take place)

367
Q

What money should buyer’s solicitor send at completion and in what method?

A

Balance of purchase price

USUALLY electronically into cleared funds from named conveyancer at clearing bank

368
Q

By who doing what when will TR1 be completed?

A

Seller’s solicitor

On receipt completion money

Complete transaction by dating TR1

369
Q

What happens in terms of dating after TR1 dated?

A

Lender’s solicitor will date the MORTGAGE deed

(not the TR1)

370
Q

Explain how Law Society’s Code for Completion by Post works?

Including docs?

A

Seller acts as agent of buyer’s solicitor

Buyer’s solicitor says in writing what seller’s sol do on their behalf

Implied undertaking to carry out ^ instructions

Once receive completion money, seller’s sol carries out instructions and completes

Informs completion taken place

Send docs would have handed over via FC post or document exchange.

371
Q

when does legal title pass on completion for registered vs unregistered?

A

Registered - once buyer registered as registered proprietor at LR

Unregistered - on completion

(why priority gap imp)

372
Q

Post-completion steps and who assigned to (in brief)?

A
  1. Discharge mortgage (seller)
  2. Pay SDLT/LTT (buyer)
  3. Register new charge at Companies House (lender)
  4. Land Registry Application (buyer)
373
Q

Less common way of sending money required to discharge mortgage?

A

seller asks buyer to send amount required to discharge mortgage direct to lender and send them the balance.

374
Q

Who is responsible for discharging the mortgage and how?

A

Always lender by any of below:

  1. Complete LR DS1 form and send to seller’s solicitor for onward transmittion to buyer; or
    not electronic old school long
  2. e-DS1 electronic discharge via LR portal; or
    not quite ED yet cos still dschange but in the portal
  3. use Electronic Discharge (ED) System
    (i.e. lender sends electronic message to LR which automatically removes charge from register)
    ED no engy so do the automatic removal

last 2 - no DS1 form required

(progression into ED)
(DS1, e-DS1, ED)

375
Q

How is buyer informed about discharge of mortgage?

A

If by DS1 form, seller’s solicitor sends the form

Any others - seller’s solicitor just sends confirmation that notice for release / discharge in electronic format been given to LR

Either way for all of them it is se

—-I——I—–I—–
L. S. B.

	 ^ for all of them
376
Q

What comes first - LTT/SDLT or registration?

A

SDLT/LTT

(and then register proprietor and register charge if lender)

377
Q

what can ap1 be used for?

A

registered ladn only

AP1

(ap-py days im new proprietor 111!!!11)

Goes to LR

Can use to:
1. register self as new proprietor of LAND at LR
2. register self as new charge holder at LR
3. if lender and ds1 form used, apply mortgage charged

378
Q

Registered land - what must be done re original mortgage after it has been discharged?

Clue: Depends on method…

A

Nothing if electronically discharged - automatically removes from charges register

If DS1 form used, buyer must apply for it to be removed from charges register (using AP1 form)
(so i bet buyer’s hope that they do electronic !)

379
Q

What needs sending to Land Registry to register new proprietorship of land?

(assuming no mortgage)

It is list time !

A
  • AP1
  • Certified copy of transfer document
  • SDLT/LTT certificate (SDLT5)
  • fee
  • form DI of any overriding interests
  • DS1 if used
  • Death cert if applicable
380
Q

What additional documents need sending to register mortgage at LR?

A
  • Certified COPY of mortgage deed (original if unregistered)
  • If company, certification of charge at CH
  • Written confirmation from solicitor or lender that mortgage deed copy is same as CH copy

(nb: in addition to usual: AP1, copy of transfer, fee, SDLT/LTT, overriding interests DI, DS1, death cert)

381
Q

What docs must be sent to LR to register previously unregistered land?

Inc what form

A

FR1 form
Fee

DL form
listing below docs (if relevant) chronologically:
1. Docs forming epitome of title
2. Pre-contract searches/enquiries and responses
3. Contract
4. Requisitons and replies
5. Pre-completion search certificates
6. Transfer deed
7. Seller’s receipted mortgage
8. SDLT/LTT cert
9. Form DI (overriding)

AND if mortgage - same stuff required as if mortgage in reg land (mortgage deed/CH/confirmation)

(FR = first reg, DL = don’t laugh, DI = overriding can di)

382
Q

What interests must you inform LR of when registering unregistered land and why?

A

Overriding - so can enter on register

383
Q

When must originals be sent for documents relating to first registration applications?

A

If sent by non-conveyancer

384
Q

What do Land Registry send once land first registered?

A

TID to buyer’s solicitor confirming now registered (not cert of title)

385
Q

If exchanged contracts does not contain date for completion, when will it be?

A

20 working days after date of contract

386
Q

When is completion money due under standard conditions?

A

2pm on day of completion.

Later, deemed as next day and buyer’s fault.

(can vary the time in contract)

387
Q

Can both parties be liable to pay compensation for delayed completion?

A

SCs - both parties

SCPC - just buyer

(if not used standard conditions, just if permitted in contract)

*SCPCs. Property below. if D bought they oculd say bye bye. MAkes aggy. *

388
Q

Calculation for contractual compensation owed for delayed completion under standard terms?

A

Minus deposit PAID (if defaulting party is buyer) from purchase price

Multiple that by contract rate
(usually barclays base rate)

Divide by 365 (to get daily rate)

Multiple by number of days in default

e.g.
contract rate = 8.5%
PP = £300K
Buyer: paid 10% (30k)

£300k - £30k = £270,000
270,000 x 0.85 = 22,950
22,950 / 365 = £62.88
£62.88 x 3 days = £188.64

389
Q

How will standard common law damages for delayed completion be assessed?

Can both parties claim them?

A

put in the position would have been in if properly performed and any reas foreseeable consequential loss
(Hadley v B)

e.g. legal costs, renting another property

YES
(whereas for contractual compensation/contract rate - buyer only if SCPC can be required to pay)

390
Q

Can you get contractual compensation and normal breach of contract for late completion?

A

Yes but if going for normal breach it will be reduced by amount got under contractual compensation

391
Q

When can notice to complete be served?

Why would you?

A

Contractual completion date passed
(usually 2pm on completion day)

Would do if one party failed to complete on time and appears delay not likely to be resolved soon

And other party wants to complete

392
Q

Effect of notice to complete?

A

Makes time of the essence

Meaning if don’t complete within 10 working days of service, entitled to terminate contract. (voidable)

If buyer is at fault, their deposit will be forfeited.

If seller at fault, must repay deposit to buyer.
(and can still claim damages)

393
Q

When could a contract be rescinded?

A

Under SCs/SCPCs:

  1. Failed comply with notice to complete
  2. Misrep in plan, contract or negotiations.
    AND due to:
    - fraud;
    - reckless; OR
    - property would be substantially diff from what led to expect in quantity/quality/tenure

less serious misrep only enable damages

394
Q

When should and how can you appoint second trustee?

A

Can appoint on transfer or by deed of appointment
but MUST appoint by completion

Contract should refer to appointment of second trustee

395
Q

When should you date TR1?

A

seller’s solicitor once received purchase price

completed once dated.

(execute before date)

396
Q

What will consideration (usually) be on TR1?

A

Full purchase price

In words and number

397
Q

When would you be able to get deposit from seller due to late completion?

A

Rescind or notice to complete (resulting in rescind)

Not compensation or damages

398
Q

Standard conditions on time is of the essence (i.e. default position)?

A

Time is NOT of the essence

(becomes of essence if serve notice)

399
Q

What happens if don’t pay SDLT/LTT?

A

Penalties

And reject applications register title

400
Q

does using specified procedures under standard conditions (rescission/notice/contractual compensation) prevent bringing damage claim for breach of contract?

A

no can still bring breach of contract.

Property Practice (3 decks)

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