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Property Practice > Key Elements and Structure of a Freehold Property Transaction > Flashcards

Key Elements and Structure of a Freehold Property Transaction Flashcards

1
Q

What are the two milestones in a conveyancing transaction?

A

Exchange of contracts and Completion.

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2
Q

What Latin phrase means “let the buyer beware?”

A

Caveat Emptor

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3
Q

What does caveat emptor mean for buyers?

A

The seller is not obligated to disclose information about the property other than limited matters of title. The onus is on the buyer to discover as much about the property as possible before exchanging contracts and committing to the purchase.

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4
Q

What is the Law Society Conveyancing Protocol?

A

A set of instructions designed to standardize the residential conveyancing process. It is accompanied by a series of standard documents issued under the “TransAction” brand.

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5
Q

What is the name of the form of standard pre-contract inquiries to the seller that the seller’s solicitor will ask their client to complete for a freehold property when using the Protocol?

A

Property Information Form (TA06)

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6
Q

What is an undertaking?

A

A statement made by or on behalf of a solicitor, or the firm, to someone who reasonably places reliance on it, that the solicitor or firm will do something, cause something to be done, or will not do something.

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7
Q

Can a solicitor give an undertaking about something outside of their control?

A

Yes, but the undertaking should make it clear that the action will be completed only if it is in their control to do so.

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8
Q

What is SDLT?

A

Stamp Duty Land Tax - a tax on property transactions

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9
Q

What is LTT?

A

Land Transaction Tax - SDLT was replaced with LTT in Wales, effective April 1, 2018.

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10
Q

How many grades of listing are there? (listed building)

A

Three (Grade 1, Grade 2*, and Grade 2)

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11
Q

What is a conservation area?

A

Areas designated by LPAs as having special architectural or historic interest, whose character and appearance are desirable to preserve or enhance.

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12
Q

What are the three stages in a conveyancing transaction?

A

The pre-contract stage, the pre-completion stage, and the post-completion stage.

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13
Q

What occurs during the pre-contract stage of a conveyancing transaction?

A

● The seller’s solicitor submits a pre-contract package of documents to the buyer’s solicitor.
● The buyer’s solicitor must check the documents to make sure the seller is entitled to sell the property.
● The buyer’s solicitor will investigate the title and carry out pre-contract searches.
● The buyer’s solicitor will raise inquiries about the property to the seller’s solicitor

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14
Q

What occurs during the pre-completion stage of a conveyancing transaction?

A

● The transfer deed is prepared.
● The buyer’s solicitor carries out pre-completion searches.
● The buyer will pay the balance of the purchase money.
● The seller will hand over the keys to the property.

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15
Q

What occurs during the post-completion stage of a conveyancing transaction?

A

● The seller’s solicitor ensures that any mortgage the seller had on the property is paid off and removed from the title.
● The buyer’s solicitor pays SDLT or LTT on the transfer.
● The buyer’s solicitor registers their client as the new owner of the property.

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16
Q

What is CQS?

A

The Conveyancing Quality Scheme is a scheme that sets standards for residential conveyancing practices. Firms that want to be a member of this scheme are required to comply with the Law Society Conveyancing Protocol.

17
Q

What are the Etridge guidelines?

A

Guidelines for solicitors acting for joint borrowers, such as a married couple who are using their matrimonial home as security for a business loan for one party. The guidelines are meant to ensure the party who is not benefiting from the loan understands the risks and implications of the transaction.

18
Q

What are some of the sources of finance for a property transaction?

A

Banks, insurance companies, finance houses, trust funds, and family members.

19
Q

What are the two most common types of mortgages?

A

Repayment mortgages and interest-only mortgages.

20
Q

How does a repayment mortgage work?

A

The borrower makes monthly payments which are partly made up of installments of the original amount borrowed and partly of interest.

21
Q

How does an interest-only mortgage work?

A

The borrower makes monthly payments which consist only of the interest on the loan. The borrower must have an alternative plan in place to pay off the capital at the end of the mortgage term.

22
Q

What are the two types of property taxes a buyer may have to pay?

A

●Stamp Duty Land Tax (SDLT) - England
●Land Transaction Tax (LTT) - Wales

23
Q

What is private residence relief?

A

Relief from Capital Gains Tax (CGT) when a seller sells their only or main residence.

24
Q

What is the statutory definition of development?

A

Section 55 of the Town and Country Planning Act 1990 defines ‘development’ as “the carrying out of building, engineering, mining or other operations in, on, over or under land, or the making of any material change in the use of any buildings or other land.”

25
Q

What are permitted development rights?

A

Permitted development rights grant automatic planning permission for some types of development. In England, permitted development rights are set out in the Town and Country Planning (General Permitted Development) Order 2015 (GDPO 2015). In Wales, they are set out in the Town and Country Planning (General Permitted Development) Order 1995 (GPDO 1995).

26
Q

What is an Article 4 Direction?

A

A direction issued by the Secretary of State in charge of Town and Country Planning, or the LPA, which removes permitted development rights.

27
Q

What is an enforcement notice?

A

A notice that may be issued when an LPA believes a breach of planning control has occurred. It must specify the breach and the steps required to remedy the breach.

28
Q

What is a stop notice?

A

A notice that can be issued to immediately stop activities in breach of planning control.

29
Q

What is a breach of condition notice?

A

A notice that can be served when there has been a breach of a condition attached to a planning permission.

30
Q

What is a listed building consent?

A

Consent that is required in addition to planning permission to demolish, alter, or extend a listed building.

31
Q

What are the implications of a property being located in a conservation area?

A

There will be stricter planning controls in place. For example, demolition or substantial demolition will require planning permission from the LPA.

Property Practice (6 decks)

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