freehold transactions (intro) Flashcards
seller & buyer's aims
what are the 3 key stages outlining conveyancing?
1- pre-exchange
2- pre-completion
3- post completion
what happens during pre-exchange stage
- parties agree a price
- survey of property and report on its value + condition
- investigating and reports on title
~on exchange~ - S & B enter into contract
- B pays deposit
- Now, neither party can pull easily
what happens during pre-completion stage?
- B’s sol orders mortgage funds, ensures they have full money from client
~on completion~ - B’s sol sends purchase price to S’s sol
- sold agree on necessary paperwork for transfer of property
what happens during post-completion stage?
- S’s sol pays off S’s mortgage + pays balance to S
- B’s sol pays stamp duty / LTT
- B is registered as new owner at LR
define caveat emptor
‘let the buyer be aware’
- S isn’t under obligation to give B all relevant info, B’s sol has to investigate
what are the exceptions to caveat emptor?
- misrepresentation
- latent encumbrances and title defects
define misrepresentation as an exception to Caveat emptor
false statement that induces B to contract to buy
- S cannot mislead B by concealing physical defects or answering dishonestly
define latent encumbrances as an exception to caveat emptor
duty where S must disclose things that aren’t apparent/cannot be discovered when inspecting property and any defects in title
- S to act reasonably and diligently
where does the information about property come from?
- title to property from LR
- S’s replies to enquiries
- searches
- survey of property
what parts should solicitors address when taking instructions from client re a property conveyance
- timescale
- cost
- surveys
tax
how are multiple owners registered at Land Registry
legal ownership:
- max of 4, 18+ and can only be sole or JT; or
Beneficial ownership:
- can be same as legal owners, not registered at LR, no max number and of any age
- JT or TiC
how are co-ownerships recorded?
declaration of trust of land must be in writing and signed by declarants
- via deed on TR1
- failing to complete is professional negligence
what advice should solicitor always give client on surveys
B should always be advised to instruct surveyor to undertake physical survey of property to identify any physical defects
what are the 3 different types of surveys?
1- basic valuation
2- homebuyer report
3- full structural survey
what is basic valuation survey
- lender will insist on this
- cheapest option that will give valuation and identify any major defects
- intended to ensure the lender that they’ll be able to recover losses by selling property
- B should be advised to take full survey
