intro to freehold transactions (week1)

Question 1

what is a lender’s aim in a freehold transaction?

Answer 1

buyer tends to get a mortgage over the property. lender has a security interest over the property, as they know if the buyer doesnt repay their mortgage, then the lender can sell the property to cover the losses.

Question 2

what does a lender want to know in a freehold transaction?

Answer 2

• that the property is marketable
• that the property’s value is sufficient to cover nay losses if the buyer doesn’t repay the mortgage

Question 3

who investigates and reports on title in pre-exchange?

Answer 3

buyer’s solicitor

Question 4

how much is the deposit in exchange?

Answer 4

10%

Question 5

what point in the transaction can neither party pull out without serious financial consequences?

Answer 5

exchange

Question 6

who pays stamp duty land tax and registers buyer as new owner at land registry at the completion stage?

Answer 6

buyer’s solicitor

Question 7

what does ‘caveat emptor’ mean?

Answer 7

‘let the buyer beware’ = means buyer must take the property as they find it.

Question 8

where does information about the property come from?

Answer 8

the land registry official copies or the deeds
sellers replies to enquiries
searches
survey the property

Question 9

what is the maximum number of legal owners of a property?

Answer 9

max is 4 people

Question 10

what is the maximum number of beneficial owners of a property?

Answer 10

there is no max

Question 11

what is joint tenancy?

Answer 11

co-owners collectively own the whole of the beneficial estate with each other (seen as a single entity)

Question 12

when does right of survivorship apply in co-ownership?

Answer 12

joint tenancy

Question 13

what is tenants in common?

Answer 13

suitable where co-owners wish to have an interest to leave in their will or have contributed unequal portions to the purchase price or where it is a business relationship.
purchases own undivided share of property and can share portions however they choose eg, 40% and 60%

Question 14

what are the 3 different types of survey?

Answer 14

basic valuation
homebuyer report
full structural survey

Question 15

what is a basic valuation survey?

Answer 15

cheapest option, and the surveyor will give a valuation and identify any major obvious defects. It is intended to ensure that the lender will be able to recover any losses by selling the property, and is not detailed

Question 16

what is a homebuyer report (survey)?

Answer 16

This is much more detailed than the basic valuation. and will be suitable for most properties in reasonable condition aged less than 150 years

Question 17

what is a full structural survey?

Answer 17

suitable for any property, but should especially be considered where the property is listed, has had extensive renovations, or where extensive alterations are planned. It is the most expensive option.

Question 18

what is a substantially common interest?

Answer 18

situation where there is a clear common purpose between clients and strong consensus on how it is to be achieved