Freehold Transactions Flashcards
How does one investigate title?
The Land Registry, if registered.
Deeds, if not registered
What could pre-contract enquiries be?
Standard or specific
What is an EPC? When must it be commissioned? How long does it stay valid? Who by?
• Energy Performance Certificate
• Must commission before marketing property
• EPC is prepared by energy assessor
• Remains valid for ten years on public register
What are the types of beneficial ownership?
Joint tenancy or tenancy in common
How is a co-ownership arrangement made?
By declaration of trust of land
Where is a declaration of trust made?
Usually in TR1 form / other transfer deed
What should advice on surveys be?
• Always be advised to instruct surveyor
• Physical defects can affect lending
What are different types of surveys?
- Basic valuation
- Homebuyer report – much more detailed
- Full structural survey – most expensive
What are tax considerations for property transactions?
- SDLT / LTT
a. If over a certain price in England and Northern Ireland (Wales is LTT) - Capital Gains Tax
a. Is tax on profit on certain assets
b. Not payable on most residential sales – Private Residence Relief - VAT
a. New builds usually
What is money needed for in property transaction?
- Cash to pay deposit
- Balance on completion
- Agreed price for any extras
- Tax
- Solicitor’s fees, which will be subject to VAT
- Solicitor’s disbursements
What is commercial funding?
• May raise equity finance
• A syndicate (group of lenders)
• Development finance
What are the types of mortgages?
- Capital repayment – pays off balance with added interest. At the end of the term, will be paid in full
- Interest only – only pays the interest, and the capital can be paid off over time but may remain outstanding. But may be good, as at end of the term, the increase of value could cover it
What are the fundamental principles for solicitors?
- Uphold rule of law
- Trust and confidence in public
- Independence
- Honesty
- Integrity
- Equality, diversity, inclusion
- In the best interests of each client
When accepting instructions to act in a property matter, what conduct issues do you need to consider?
- Are you authorised to act on your client’s behalf?
- Can you provide a competent and timely service?
- Would you have any conflict of interest?
- Duty of confidentiality
- Duty of disclosure
What is important when taking instructions from client?
• Identity checks essential
• Be careful about accepting from one spouse on behalf of another – unless written confirmation from other spouse that they are happy
What are the exceptions to other conflict interest? What is physically needed for these exceptions?
- Clients have substantially common interest
- The clients are competing for the same objective
- All the clients have given informed consent in writing
- Safeguards in place to protect confidentiality (i.e. only allowing certain staff access to different client’s files)
- You are satisfied it is reasonable to act on behalf of all clients (not if one is vulnerable)
What is to be shown to see if clients competing for same objective? What happens if they fall out?
- Clear common purpose
- Strong consensus on how to be achieved (price, timescales, etc)
- If a fall out – should cease acting ideally
Can you act for multiple clients in an auction?
In an auction – would be fine to act for more than one because only one will effectively succeed
What is duty of disclosure?
Must disclose all investigations on property, basically. Don’t leave anything out. Or you could get sued for negligence.
What is exception to duty of disclosure?
Limited exceptions to this duty – i.e. if information could cause serious physical or mental harm, or disclosure prohibited by legal restrictions
