Land / Property Flashcards
What are choses in possession?
Physical, moveable things
What are choses in action?
Rights to things that do not have physical existence
What are corporeal hereditaments?
Tangible things (buildings / minerals / trees)
What are incorporeal hereditaments?
Intangibles (rights / easements / rents)
What minerals are landowners not entitled to?
Coal
Oil
Natural gas
Gold
Silver
Treasure
Crown is entitled
If a landowners has wild animals on their land, what rights do they have?
They do not own the wild animals, but can hunt them
What is the degree of annexation test?
The greater the degree of attachment to the land, the more likely the item is to be a fixture
What is the purpose of annexation test?
If the item was brought onto the land with an intent to make a permanent improvement, the item is more likely to be a fixture
What are the legal interests in land?
Mortgages
Easements
Rent charges
Profits à prendre
Rights of entry
Must be created by deed
What is a profit à prendre, and what are the two types?
Entitles somebody to take something from the land of another.
In gross = exists independently of land, brought and sold, not attached to ownership.
Appurtenant = attached to a particular piece of land, brought and sold with the land.
Who is bound by a legal interest?
Everybody
What are equitable interests?
Freehold covenants (restrictive / positive)
Estate contracts (agreements to purchase)
Matrimonial home rights
Beneficial interests under a trust
Equitable mortgages (agreement/failure to create a mortgage)
What must be satisfied for an equitable interest to be binding?
There must be notice of it (must be registered).
If it’s not registered, a purchaser can still take the land free of the equitable interest even if they knew about it.
For a contract for sale to be valid, what formalities must be satisfied?
Must be:
- In writing
- Include all agreed terms
- Be signed by all contracting parties
What formalities must a deed follow?
- In writing
- Express itself as a deed
- Be validly executed (signed in the physical presence of a witness)
- Delivered as a deed (expression of an intention to be bound)
Which legal interests in land can be created without a deed?
Assent (must be in writing, but do not need to be by deed)
Lease for a term of up to 3 years (at the best rent) - can be orally / in writing
What must be produced by the seller of unregistered land to prove their title?
Seller must produce documents commencing with a good root of title demonstrating an unbroken chain of ownership for a minimum of 15 years
Root of title must cover the whole legal and equitable interest and contain and adequate description of the property
What are the most common unregistered documents of title?
- Conveyance (transfer of ownership)
- Deed of gift
- Mortgage deed
- Asset (from PRs to beneficiary)
When did all land become compulsorily registrable?
1 December 1990
any triggering event means land must be registered
What are the 6 triggering events?
- Conveyance of freehold land
- Assent
- Deed of gift
- Creation of a first legal mortgage
- Grant of a lease for more than 7 years
- Assignment of a lease with more than 7 years left to run
What is absolute freehold title?
Best class of title, cannot be challenged
What is qualified title?
Where ownership has only been established for a short period of time / there is a specific interest that means the property is excepted from the effect of registration
What is possessory title?
Based of possession rather than documentary evidence
Can possessory title be upgraded?
Can be ungraded to title absolute if the title holder can show that it has remained unchallenged for 12 years since it has been granted
What is absolute leasehold title?
Where HMLR inspects all superior leasehold and freehold titles
What is good leasehold title?
Certain documents have not been filed with the land registry, so guarantee is not extended to the freehold
Can food leasehold title be ungraded?
Yes, if the freehold owner produces their title at HMLR
For there to be a legal lease over 7 years, what formalities must be followed?
The lease must be created by deed and registered
For there to be a legal lease for less than 7 years, but more than 3 years, what formalities must be followed?
The lease must be created by deed
For there to be a legal lease of less than 3 years, what formalities must be followed?
- Fixed term lease must be made by deed
- Periodic term lease can be oral or in writing as long as the tenant is in possession and pays market rent
What are some examples of when an equitable lease is made?
An agreement to create a lease
An attempt to create a legal lease, but a failure to do so
A lease that has been granted over an equitable estate
What formalities must an equitable lease follow?
Must be:
- In writing
- Contain all agreed terms
- Be signed by both parties
- Be capable of specific performance
What formalities must a legal mortgage follow?
- Created by deed
- Registered
What formalities must an equitable mortgage follow?
- In writing
- Contain all agreed terms
- Be signed by both parties
What formalities must a mortgage over an equitable estate follow?
- In writing
- Signed by the mortgagor
What formalities must an express legal easement in registered land follow?
- Created by deed
- Created for a duration equivalent to the legal estate
- Registered
What formalities must an express legal easement in unregistered land follow?
Does not need to follow any formalities - this will be a legal interest that can be automatically enforced as long as the buyer has notice
When is an implied legal easement overriding?
- Must be in a registered system
- Buyer must have actual notice
- Easement must have been obvious
- Easement was exercised in the year prior to sale
What formalities must an express equitable easement follow?
- In writing
- Contain all agree terms
- Be signed by both parties
- Capable of specific performance
What formalities must a freehold restrictive covenant follows?
- In writing
- Signed by the Covenantor
What formalities must an estate contract follow?
- In writing
- Contain all agreed terms
- Be signed by both parties
- Be capable of specific performance
What formalities must an express beneficial interest under a trust comply with?
- In writing
- Signed by the settlor
What are the two different types of notice?
- Agreed notice = made with agreement of the registered proprietor
- Unilateral notice = made without the consent of the registered proprietor
Registered proprietor can apply to HMLR for the removal of either
What does a restriction do?
Prevents dealing with the land otherwise than in accordance with the restriction
What are examples of overriding interests?
- Leases for less than 7 years
- Persons in actual occupation (but must be more than mere occupation, the person must have rights in the land)
- Easements granted by prescription / implied grants - expressly created easement cannot be overriding
non-owning spouse with a right of occupation does not have an overriding interest
What interests with a buyer of registered land be bound by?
Any legal interests that subsist, regardless of whether they are aware
What interests will a buyer of unregistered land be bound by?
- Any legal interests over the estate
- Any equitable interests that they have notice of
What are the different land charged?
Class C (i) = puisne mortgage
Class C (iii) = general equitable charge
Class C (iv) = estate contract
Class D (ii) = restrictive covenant
Class D (iii) = equitable easement
Class F = non-owning spouse
What is the consequence of failing to register a land charge?
It will be void against a purchaser for value
What is constructive notice?
Purchaser will have notice of all interests that are reasonably discoverable by inspection
What is imputed notice?
Purchaser will be deemed to have notice if it was received by their agent / where their agent should have known
If there has been a triggering event, when must land be registered?
Within 2 months of the triggering event
What are the different ways that a party can sever a joint tenancy?
- Written notice (served on all co-owners, stating an irrevocable intention to sever immediately)
- Act operating on its own share - total alienation (disposing share to a third party), partial alienation (taking out an equitable mortgage), involuntary alienation (bankruptcy)
- Severance by mutual agreement through course of conduct
What is overreaching?
Where a buyer purchases from 2 or more trustees, they will give a valid receipt with has the effect of overreacting the interest of a behind-the-scenes beneficiary.
Payment transfers the equitable interest of the beneficiary from the land and attaches it to the purchase money.
What is Section 14 of the TLATA used?
Where a trustee / beneficiary can apply to the court for an order relating to the trustees duties
What are common orders that can be made on a Section 14 application?
- order to sell the property
- order relieving the trustees of their duty to obtain beneficiary consent
- order declaring the nature / extent of a person’s interest in the property
What does Section 15 of the TLATA state?
The different factors that will be considered in an application for an order to sell
What are the different factor set out in Section 15 of the TLATA?
- intention of person who created the trust
- purpose for which property subject to the trust is held
- welfare of any minor who occupies / might reasonably be expected to occupy the property
- interests of secured creditors
What does an energy performance certificate contain, and how long is it valid for?
Valid for 10 years once produced.
Contains formation about the energy use and efficiency of the property
Who is the memorandum of sale prepared by, and what does it contain?
Prepared by the estate agent.
- details of seller
- details of seller’s solicitors
- details of buyer
- details of buyer’s solicitors
When a person moves from the house that they are selling into the house that they are buying on the same day, what is thus called?
A synchronised transaction
On the assignment of a lease, how can terms be negotiated?
Terms are not negotiable.
However, buyer’s solicitor can ask the seller’s solicitor to enter into a deed of variation to change the terms of the lease.
Who can an undertaking be given by?
Anyone in the firm
What is an important undertaking given in conveyancing transactions?
On completion, the seller’s solicitor will undertake to pay off their seller client’s mortgage out of the sale proceeds
If a solicitor is acting for more than one party in the transaction, what must they ensure?
That they contact all of the parties to confirm their instructions
What are the 4 main pre-contract steps for a seller’s solicitor?
- obtaining their title
2.drafts the contract of sale
- sends the protocol forms to their client (fittings and contents form / property information form)
- sends contract package to the buyer’s solicitor
What are the 6 main pre-contract steps did a buyer’s solicitor?
- Receiving the contract package
- Submitting searches
- Investigating title
- Raising enquiries
- Checking their client’s finances
- Reporting to their client
What are the main pre-completion steps for a seller’s solicitor?
Obtaining a mortgage redemption figure from the lender
Getting their seller client to sign the transfer
What is the main pre-completion step for a buyer’s solicitor?
Obtaining their client’s funds to complete the purchase
Once the transaction has completed, what must the seller’s solicitor do?
Send the transfer to the buyer’s solicitor and redeem the mortgage
Notify their client of any money received
What important post-completion steps must the buyer’s solicitor do?
Pay stamp duty land tax (if applicable)
Make an application to register the buyer’s title to HMLR
What is the Property Information Form?
Gives the buyer practical information about the property (e.g., boundaries / disputes / planning / alterations / occupiers)
What is the Fittings and Contents Form?
Sets out the items at the property that the seller intends to include in the sale price
What is the Leasehold Information Form?
Gives the buyer practical information about the property if it is a leasehold residential property (landlord contact / payment of rent / service charges / alterations to property)
What is the Completions Information and Undertakings Form?
Gives the buyer’s solicitor details about the keys to the property, the seller’s solicitor’s bank account details, and undertakings to redeem the mortgage.
What protocol forms do commercial transactions use?
Standard Commercial Property Conditions (more complex version of Standard Conditions)
Commercial Property Standard Enquiries (commercial version of PIF)
When is stamp duty land tax payable?
When freehold land is purchased
When a new lease is granted
When an existing lease is assigned
How is HMRC notified of an applicable SDLT transaction?
Through Form SDLT 1, and then HMRC issues Form SDLT 5 (this must be sent to HMLR with the application for first registration)
When must HMRC be notified of a transaction for SDLT purposes?
Transactions of £40,000 or over
What is SDLT payable on?
Payable on the purchase price of the land, not the value of fittings / contents
What is the first time buyer allowance for SDLT?
No SDLT up to £425,000
Anything between £425,001 to £625,000 = 5%
Over £625,000 = allowance completely lost
What is the deadline in which SDLT must be paid?
Within 14 days of completion
When is SDLT payable on the grant of a new lease?
SDLT is calculated on the premium ‘purchase price’ of the lease
There is also an additional element of SDLT calculated by reference to rent payable under the lease
In the context of land, what is VAT charged on?
Commercial property sales
What are zero-rated supplies for residential property?
Construction services (standard rated for commercial)
Sales of new houses
When is VAT not payable on a commercial property?
If the commercial property is older than 3 years (but seller can exercise option to tax)
When is CGT payable in a land context?
On buy-to-let properties
On sale of business premises
On sale of land (not residential)
How is a contract amended to include all agreed terms?
Once the seller’s solicitor drafts the contract, it is sent to the buyer’s solicitor who will amend / approve so both end up with an identical part of the contract
What are the three parts to a contract for sale of land?
- Particulars of sale
- Standard conditions
- Special conditions
What information is usually included in the particulars of sale?
- Exchange date
- Seller and buyer’s name and address
- Property address
- Title details (title number / root of title)
- Encumbrances
- Title guarantee
- Completion date
- Contract rate (penalty of interest if late completion)
- Purchase price
- Sum (if any) paid for fittings and contents
- Deposit
- Balance
What information is in the standard conditions?
Basic terms and conditions of the transaction
What information is included in the special conditions?
- Conditions particular to the transaction
- Incorporation of standard conditions
- Whether property is sold with vacant possession
- Time for completion
- Confirmation of items included in the Fittings and Contents Form being included
- Provision that neither party can rely on representations made by the other
What is an occupiers consent form?
Confirmation of a non-owning occupier that they will sign the contract to confirm that they will move out on completion
What defects must a seller disclose?
Latent defects (not apparent from a physical inspection)
What defects is a seller not obligated to disclose?
Patent defects (apparent from a physical inspection of the property)
What is a title guarantee?
A promise by a seller that a buyer is entitled to rely on.
Seller promises that they have the right to sell the property?
What is a full title guarantee? Who is this usually given by?
Seller warrants that they are selling the property free from all charges / encumbrances.
Given by a seller who owns the full legal and equitable interest (has lived in the property)
What is a limited title guarantee? Who is this given by?
Seller warrants that they have not created any charges or granted any rights that have not been disclosed.
Given by a seller with less knowledge / involvement (e.g., a landlord / PR)
What is a no title guarantee? Who is this given by?
Seller makes no promises about whether there are any charges / rights over the property.
Given by a seller who has no knowledge of the property at all (e.g., recipient of a gift / lender in possession)
What does it mean when a deposit is held as stakeholder?
On receipt of the deposit, the seller’s solicitor holds the deposit on behalf of both parties.
The deposit is paid over to the seller on completion.
What does it mean when deposit is being held as agent?
Seller’s solicitor will pay the deposit over to the seller immediately on exchange
If deposit is held as agent, and subsequently paid over to the seller before completion, can the buyer recover the deposit?
It depends if the National House Building Council (NHBC) new build warranty will be available on completion.
This warranty has the benefit of a deposit protection scheme whereby if the seller does go out of business before completion, the NHBC will compensate the buyer for the loss of their deposit.
What happens to the property between exchange and completion in terms of risk?
The property is at risk of the buyer - if building is damaged / destroyed, the buyer is contractually obligated to proceed.
Buyer should be advised to get buildings insurance.
What are the implications of a conditional contract in a commercial transaction?
This is the process by which parties can enter into the contract, but it is conditional on a specific event being resolved (e.g., securing planning permission/funding)
There is no binding contract until the condition is satisfied.
Risky as the buyer can walk away from the transaction without penalty.
What does the contract pack for the sale of a residential freehold property include?
Draft contract in duplicate
Evidence of seller’s title
PIF
FACF
Guarantees
Planning permissions
If a seller’s solicitor has given an undertaking to redeem the seller’s mortgage out of the sale proceeds, but they do not have enough funds to repay, what is the consequence?
The buyer’s solicitor can require the seller’s solicitor to meet the shortfall out of the firm’s own money
Where sellers are all co-owners as joint tenants, who must sign the transfer?
All people must be sellers in the contract and sign the transfer
Where sellers are all co-owners as tenants-in-common, who must sign the transfer?
All must be sellers and sign the contract
If the surviving beneficial joint tenant wants to sell the property, what must be produced?
The death certificate
Who must sign the contract if the sole seller has died?
The deceased’s PR
If the seller is a lender who has repossessed the property, who must sign the contract for sale?
Buyer must check power of sale exists (see a copy of the court order for possession)
Lender will be the seller and must sign the transfer
Why is the sale of unregistered land risky?
Title must be checked every time the land changes hands
What does the property register show?
- Whether the property is freehold/leasehold
- Property address
- Rights of the property (e.g., right of way)
What does the proprietorship register show?
- Who holds the legal estate (owner)
- Class of title held
- Restrictions on the property
- Any behind-the-scenes beneficiaries
What does the charges register show?
Details the charges that affect the estate (restrictive covenants / mortgages)
If there is any doubt as to whether a document meets the requirement of a good root of title for unregistered land, what should the buyer’s solicitor do?
Insist that the seller’s solicitor registers the title
What does an epitome of title include?
A chronological list of the documents of title with copies of the documents attached
When will a document not be a good link in the chain of title?
A photocopy of a document that has not been certified as a true copy of the original
What is the priority period in which completion must take place for unregistered land?
After a land charges search, completion must take place within the 15-working-day priority period
What is a mortgage valuation report?
Paid for by the buyer if they are obtaining a mortgage.
Establishes whether the property represents good security for the lender’s loan.
What is a homebuyer’s valuation report?
Paid for by the buyer, buyer can rely on this.
Contains more details than the mortgage report.
What is a full structural survey?
Paid for by the buyer (expensive)
Used when the property is old / of high value
Used when the buyer intends to make structural alterations the property
What 5 pre-contract searches are carried out in every transaction?
- Local search
- Drainage search
- Environmental search
- Physical inspections
- Pre-contract enquiries of the seller
What does a local search tell you?
- Anything happening on local level that might affect the property.
- Who is responsible for maintaining the roads.
- Planning/building regulations.
- Tree preservation orders.
- Whether property is in a conservation area.
- Listed building consent.
- Enforcement proceedings.
What does the environmental search tell you?
Information on environmental factors that might affect the property (contaminated land / flooding / soil types)
When is a bankruptcy search carried out?
Carried out against the name of the buyer(s) if they are getting a mortgage.
Carried out on behalf of the lender.
What does a coal mining search tell you?
Whether the property is built on / near to underground coal mining works that could affect the stability of the building
What does the canal / river search tell you?
Ownership of, and responsibility for the riverbank / fishing rights / mooring rights / licenses to extract water / drainage rights
What does the local authority search tell you?
Gives details of pollution / noise abatement / pipelines
What does the commons registration search tell you?
Whether the property is on / adjacent to common land which can give local residents the right to use land
What does the chancel search tell you?
Whether the property is requiring to make financial contributions towards the chancel repair obligations of the local church
What does the company search tell you?
Carried out when the seller is a limited company.
Establishes whether the company is liquidated and entitled to deal with land.
What does the index map search tell you?
Carried out for unregistered land.
Whether all / part of the land is registered.
Whether the property is subject to a caution against first registration.
Who is the full land charges search carried out against? What does it tell you?
Carried out against full names of all owners in unregistered land since the root of title.
Carried out for the full year of ownership of the relevant names (not the present date).
Reveals whether there are any third party rights registered as land charges that might affect the property.
If incorrect replies are given to questions raised by the buyer’s solicitor, what is the consequence?
The buyer might have the right to a claim against the seller in misrepresentation
If there is a public right of access over the property, what should be done?
The route of the public footpath must be reported to the buyer and the lender.
What does the CPSE (commercial equivalent of PIF) include?
- boundaries
- rights benefitting the property
- physical condition of the property
- utilities / services
- fire safety
- planning / building regulations
- environmental issues
- occupiers / employees
- insurance
- disputes
If a seller is only selling part of their land, what must be obtained?
If the land is in mortgage, the seller must obtain the consent of the lender.
Lender will need to release the land being sold from mortgage.
What are important planning considerations in relation to new build properties?
New builds must be built in accordance with valid planning permissions.
Seller must agree to hand over a building regulations completion certificate on / before completion.
What agreement does a developer usually enter into with the local authority about?
That they will build all roads serving the property to a good and work,a like standard - will also place a sum of money with the local authority (a bond)
What is the new build warranty?
A warranty valid for the first 10 years of construction.
Puts right any structural defects.
Ensures deposit protection.
What is planning permission required for?
Development (building operations)
Material change in use of land (change of use class)
What constitutes building operations?
Demolition
Rebuilding
Structural alterations / additions
Other operations usually carried out by a builder
What is planning permission not required for?
Anything done to the interior of a building that does not materially affect the exterior
Alterations to a dwelling that are consistent with its use as a dwelling (e.g., garage conversion into a study)
If planning permission is required, how much an application be made?
In writing to the relevant planning department
If planning permission is granted, how soon must development happen?
Development must commence within 3 years of the date of the permission
What is deemed planning permission given for?
Minor work
Permitted development (provides blanket permission), like building a porch
Where does deemed planning permission not apply?
In conservation areas
In local authorities that do not want to adopt the permitted development rights (and therefore pass an Article 4 direction)
What is the consequence of an Article 4 direction being passed by the local authority?
If the property owner wants to make even a minor change, they will need to make a paper application for express permission
What are the two steps for planning permission?
- Outline permission
- Detailed permission
What is outline permission?
Broad permission as to the principle of development (the idea)
Gives consent subject to reserved matters (e.g., materials to be used)
What is detailed permission?
Complex and costly
Applicant must submit full plans
Usually subject to several planning conditions that must be met before/during/after the building process
Some conditions may continue to bind after work is completed
What is the time limit in which a local authority can take action regarding building works / changing use to a single dwelling house?
Notice must be served within 4 years of the breach
What is the time limit in which a local authority can take action regarding other breaches?
Notice must be served within 10 years of the breach
What is the time limit in which a local authority can take action when breach / planning has been concealed?
No time limit for enforcement
If local authority serves an enforcement notice to remedy a breach, what must it state?
The nature of the breach
The steps required to remedy the breach
The time limit to complete the required work
What are the three different types of enforcement action that can be taken by a local authority where there has been breach of planning permission?
- Enforcement notice
- Stop notice
- Planning contravention notice
What does an enforcement notice do?
Order to restore land / secure compliance with any conditions
Criminal sanctions imposed if not complied with
What does a stop notice do?
Can be served alongside an enforcement notice to stop all activities that are held to be in breach
When is listed buildings consent needed?
When wanting to demolish / extend / alter a listed building.
Needed for interior and exterior works to a listed building.
Requires in addition to planning permission.
Within what time frame must an enforcement notice be issued for a listed building?
No time limit - can be issued at any time and can be served on the current owner (even if they did not carry out the works).
Failure to comply is a criminal offence.
When should planning issues be resolved in a property transaction?
Prior to exchange - planning matters run with the land
What are building regulations?
Statutory standards in place to ensure that new building are built in accordance with health and safety standards.
Required even if planning permission is not required
What sort of things does building regulations cover?
Installation of windows
Electrical works
Installation of boilers
How is building regulations approved?
A building control officer will inspect the work done and, once satisfied, will issue a building regulations completion certificate
Within what time frame can the local authority take action against a person who does not comply with building regulations?
Within 1 year from the date of breach
Even if the deadline has passed, local authority may still be able to obtain an injunction to force the property owner to bring the property to standard
If the enforcement period for buildings regulation consent has passed, what can the buyer still ask for?
Can ask the seller to provide indemnity insurance
If building work has been carried out in breach of a covenant, what should be done?
Indemnity insurance should be obtained
A special condition should be inserted into the contract if the seller will be paying for the indemnity insurance
Can also find the person with the benefit of the covenant and get their consent
What is source of funds?
Where money is being held
What is source of wealth?
How the buyer came into possession of the money
What information does the mortgage offer contain?
Sets out the terms upon which the buyer can borrow the mortgage funds.
- amount of mortgage
- type of mortgage
- interest rate
- term of the mortgage loan
- conditions that must be complied with
What is a repayment mortgage?
Where the borrower repays an element of capital and interest each month
What is an interest only mortgage?
Borrower only repays interest during the term.
Capital remains outstanding.
Borrower must have an investment plan in place to pay off the capital at the end of the term.
What is an endowment mortgage?
A mortgage combined with a life insurance policy
What is a pension mortgage?
A mortgage linked of the borrower’s pension
Borrower only pays interest during the term, pension fund pays off capital at the end of the term
What are the duties of a solicitor under the UK Mortgage Lenders’ Handbook?
- carrying out appropriate due diligence
- investigating title
- advising on the contents of the mortgage offer
- ensuring borrower signs the mortgage deed
- registering the mortgage after completion
- ensuring purchase price is the same
- confirming where the balance of purchase money is coming from
- establishing who will occupy the property
Before exchange, whose consent is required to proceed?
Client’s
Lender’s
What is the purpose of a certificate of title?
- Acts as a request to the lender for drawdown
- Confirms to the lender that the title is good and marketable
If a buyer is a limited company, what extra step is required after completion?
The buyer’s solicitor must register the mortgage charge at Companies House within 21 days of completion
If company’s mortgage is not registered at CH within the deadline, what is the consequence?
A court order will be required.
The buyer’s solicitor will not be able to complete the client’s registration or register a lender’s legal charge - will be negligent
When must a mortgage be registered in the registered land system?
Within the 30-working-day priority period conferred by the OS1 search.
(OS1 search is carried out in the name of the lender)
How many people can a legal estate be held as joint tenants by?
A maximum of 4 people (full age and capacity)
Names will appear of the proprietorship register
What are the three methods of exchange?
- In person
- By post
- By phone
What is the process of exchanging by post?
Each solicitor posts their client’s signed part of the contract to the other.
Matter becomes legally binding when the seller’s part of the contract is posted.
What is the process of exchanging by phone?
Seller’s solicitor and buyer’s solicitor have a call to go through the contract.
They write the date of completion and date of exchange, then agree a time for exchange.
implied undertaking that the signed contracts will be sent out on the day of exchange
What is simultaneous exchange and completion?
Buyer and seller exchange and complete on the same day
However, no period of time during which either party is legally bound to proceed - either can withdraw without penalty
What is Formula A for exchange?
A = one solicitor does all of the work
Seller’s solicitor holds both parts of the contract with the buyer’s deposit.
Solicitors have a phone call to confirm both parts of the contract are the same.
Seller’s solicitor inserts completion date + time for exchange.
Seller’s solicitor sends the contract signed by their client to the buyer’s solicitor on exchange day
What does it mean when a deposit is held to order?
That the seller’s solicitor cannot exchange / use deposit funds without the authority of the buyer’s solicitor
What is Formula B for exchange?
Each solicitor holds their client’s own signed part of the contract.
Solicitors have a phone call to confirm contracts are identical and agree a completion date / exchange date / time.
Solicitors send signed contracts to each other.
What is Formula C for exchange?
Used where there is a chain of transactions.
Deposit money is sent directly to another firm.
Call 1 = sols call their clients to confirm their authority to proceed
Call 2 = sols call each other and exchange
What is included in the written memorandum of exchange?
- solicitor’s name
- date and time of exchange
- formula used
- completion date
- deposit amount
If there is significant time between exchange and completion, what should the buyer’s solicitor do?
Register an estate contract against the seller’s title to protect the buyer’s position.
Puts anyone else dealing with the title on notice that the seller has entered into a contract with the buyer.
What duty does a seller have after exchange?
A duty to keep the property in the same state and condition as it was at exchange
Can a buyer move into a property before completion?
In residential transactions, the special conditions contain a provision that allows the buyer to occupy as a licensee.
SCPC does not include the same conditions, but a special condition can be negotiated prior to exchange.
What is the completion undertakings form?
A form provided by the seller’s solicitor for the buyer’s solicitor - details things like:
- keys to property
- docs that will be provided on completion
- balance of purchase money
- bank account details
- undertakings to deemed the mortgage
When does the seller’s solicitor obtain a redemption figure for the mortgage?
- Obtains an indicative redemption figure at the start of the transaction (to ensure there are sufficient funds)
- Obtains an up-to-date redemption figure that is calculated to the completion date
What does a completion statement detail?
All legal fees
Any VAT payable / paid
Costs required to purchase
What are sums due to the seller on completion called?
Net sale proceeds
If a seller has used an estate agent, what must the seller’s solicitor do on completion?
Seller’s solicitor must obtain the seller’s authority to pay the estate agents out of the net sale proceeds
What is the certificate of title used for?
Buyer’s solicitor sends this to the lender to request drawdown of the mortgage advance prior to completion
What is the purpose of a transfer?
It transfers the legal title to the property from the seller to the buyer
How can a company execute a deed?
Adding their seal
Signing in the presence of a director/secretary
What formalities must a contract for the sale of land follow?
It must be in writing - no need for witnesses
What land documents are witnesses needed for?
TR1
TP1
Mortgage deed
Deed of easement
What pre-completion search is carried out in relation to the sale of the whole of registered land?
Official search of whole of registered land with priority (OS1)
What does the Official search of whole of registered land with priority (OS1) do?
- Updates the official copies (shows any entries made on the seller’s register since the official copies were produced)
- Confers a 30-working-day priority period in which matter must complete and an application to register transfer of title must be made
What pre-completion search is carried out in relation to the sale of the part of registered land?
Official search of part of the land with priority (OS2).
Has the same consequences as OS1 (30-working-day priority period to complete and register transfer)
When is the bankruptcy search carried out?
When obtaining a mortgage (initially)
At the pre-completion stage to ensure no bankruptcy entries have been made during the transaction
When is the Full land charges search carried out? What is the consequence of this search?
Pre-completion.
Confers a 15-working-day priority period in which the matter must complete (but buyer’s solicitor will still have 2 months to register the transfer with HMLR).
What are the three methods for completion?
- In person
- By agent
- By post
What is in-person completion?
Buyer’s solicitor attends seller’s solicitor’s office with a banker’s draft of the balance.
Hands this money to the seller’s solicitor in return for the signed transfer and other deeds.
What is completion by agent?
Buyer’s solicitor appoints a firm near the seller’s office to complete by person
What is completion by post?
Seller’s solicitor agrees to act as agent for the buyer’s solicitor.
When purchase money is received, the seller’s solicitor posts the transfer and other deeds to the buyer’s solicitor.
What is the Law Society’s Code for completion by post?
Seller’s solicitor warrants that they act for the true owner of the property when they agree to act as agent.
Also contains undertakings to redeem mortgages
If title is unregistered, how is a mortgage redeemed?
The seller’s solicitor sends the original mortgage deed (signed by the seller) to the lender to receipt and return.
The mortgage deed is then sent to HMLR as part of the application for first registration.
If SDLT is payable on completion, what must be done?
Form SDLT and tax must be submitted to HMRC within 14 days of completion.
Once SDLT 1 is received, SDLT 5 is issued (and sent to HMLR on registration)
If title is registered, when must solicitor apply to HMLR to register the transfer?
Within the 30-working-day OS1/OS2 priority period
If title is unregistered, when must solicitor apply to HMLR to register the transfer?
Within 2 months of completion
If title is registered, and the seller has a mortgage to redeem, and the buyer as a mortgage to register, what must be sent to HMLR?
Transfer signed by the seller
HMLR fee
Form DS1 (if paper form of discharge)
Mortgage deed (for new mortgage)
SDLT5 (confirmation of payment of SDLT)
If title is registered, when does title pass?
On registration at HMLR
If title is unregistered, when does title pass?
On completion
Under the Standard Conditions / SCPC, when is the default date for completion?
20 working days from exchange of contracts
Under the Standard Conditions / SCPC, when is the default time for completion?
2pm on the completion date
If completion is after 2pm, what is the position as to completion time/date?
The transaction is taken to have completed on the next working day
If there is late completion, what is the consequence?
The innocent party is entitled to compensation from the defaulting party at the contract rate.
Innocent party is not entitled to rescind (as time is not of the essence).
If an innocent party would like to refuse to proceed / withdraw from the transaction, what can they do?
Serve a notice to complete
In serving a notice to complete, what criteria must be satisfied?
Ready, Willing, Able to complete
What are the consequences of a notice to complete?
- defaulting party has 10 working days to complete
- makes time of the essence (can withdraw if no completion)
- if reduced deposit paid, the balance must be paid immediately
- innocent party can rescind if OS does not complete in 10 working days
If a buyer defaults with a notice to complete, what can the seller do?
Rescind
Keep the buyer’s deposit
Resell the property
Claim any damages for other losses
If a seller defaults with a notice to complete, what can the buyer do?
Rescind
Demand the return of their deposit money with interest at the contract rate
Claim any damages for other losses
What are the three main remedies that can be awarded before completion?
Specific performance (at court’s discretion)
Damages (losses naturally flowing from the breach plus any reasonably foreseeable losses)
Rescission
When is the right to rescind available?
- Buyer/seller has failed to comply with a notice to complete
- License to assign is not forthcoming
- Misrepresentation (statement of fact made by one party that induces the other party to enter into the contract and they suffer loss as a result)
What is fraudulent misrepresentation?
Deliberate dishonesty
Statements made knowingly/recklessly as to whether they are true
What is the remedy for fraudulent misrepresentation?
Damages + rescission
What is negligent misrepresentation?
Careless statements
What is the remedy for negligent misrepresentation?
Damages or rescission
What is innocent misrepresentation?
Statement that is a genuine mistake, made innocently
What is the remedy for innocent misrepresentation?
Rescission
but court can award damages instead.
Injured party has no right to claim damages.
What is pre-transaction misrepresentation? When can a party rescind in these circumstances?
Where statement / plan in contract / negotiations leading to it were misleading or inaccurate because of an error or mission.
Can rescind where:
- there has been fraud / recklessness.
- if innocent party took the property, it would be substantially different from what they expected to take.
What is misdescription?
An error in the property particulars
What is the remedy for misdescription?
If significant, rescission + damages
If there has been a breach of title guarantee, and this is ascertained after completion, what is the remedy?
Damages
What is alienation?
Dealing with a tenant’s interest in the property - assigning it / subletting it / charging it
Where is a lease registered? (I.e., how can you show a lease exists)
On the Leasehold Property Register
In the context of leases, what does the proprietorship register show?
The current leasehold owner (who is assigning the lease)
The class if title of the lease
What is a long residential lease?
There is usually a significant premium (purchase price) charged when the lease is first granted, but ground rent is relatively low
If tenants breach positive covenants contained in their individual leases, what can be done?
The landlord can enforce the terms, and if they fail to comply, the landlord can forfeit the lease.
What is a suspension of rent clause?
A provision that entitled the tenant to suspend rent payments if the demised premises are damaged or destroyed in relation to an insured risk.
Must be expressly added.
Where a tenant takes on an obligation to “keep the demised premises in repair”, what does this mean?
Tenant is taking on the obligation to ‘put in’ repair - to fix everything on the premises even if they did not break it
In regard to terms related to repairs, what should a tenant do?
Tenant should attempt to negotiate a limitation to exclude liability for fair wear and tear
If a service charge is disproportionate, what can be done?
It can be challenged - it is a requirement under the LTA that a service charge is reasonable
On a lease of part, who is responsible for insuring?
Tenant is responsible for insuring the demised premises.
Landlord is responsible for insuring the building within which the demised premises are situated.
Landlord will usually be responsible for insuring against insured risks and tenant will covenant to contribute to the insurance premium.
If there are no provisions dealing with alienation, what is the position?
The tenant is free to deal with the property as they wish
What is an absolute covenant?
Prohibition of a specific act being carried out entirely
(cannot under-lease/sublet at all)
What is a qualified covenant?
Does not absolutely prohibit alienation, but makes it conditional upon first obtaining the landlord’s consent.
What is a fully qualified covenant?
Requires the landlord to act reasonably in deciding whether to grant their consent in relation to alienation
What does S19(1A) LTA rule in relation to alienation?
Permits a landlord to specify conditions that must be met before the landlord will give consent to assign the lease.
These conditions must be reasonable
What does S19(3) LTA rule in relation to alienation?
If a lease contains a qualified covenant that the tenant cannot change use without the landlord’s consent, the landlord cannot charge money as a condition of giving consent.
Applies to non-structural alterations.
Landlord can, however, recover reasonable costs for giving consent (e.g., solicitor fees).
Landlord is entitled to compensation if the tenant’s alteration diminishes the value of the property.
Landlord could require the tenant to reinstate the premises to the prior condition.
What does S19(2) LTA rule in relation to alienation?
If a lease contains a qualified covenant that a tenant cannot make alterations without the landlord’s consent, this provision converts this into a fully qualified covenant if the alteration is an improvement.
Same provisions (reasonable costs and reinstating premises) applies.
What does S3 LTA rule in relation to alienation?
If a commercial lease contains an absolute prohibition on making any alterations, tenant can serve notice of proposed work on landlord.
If landlord does not object within 3 months, tenant can carry out the works.
If landlord objects, tenant can apply to the court to authorise the works.
What must be included in a lease if a landlord would like to increase rent payable?
A rent review clause (if not added, landlord cannot increase rent)
When can a landlord forfeit a lease?
- There is a provision in the lease expressly allowing forfeiture / right of re-entry
- Tenant’s obligation is a condition
How can a landlord forfeit a lease due to non-payment of rent?
- Landlord must make a formal demand for rent (demand the sum, at the property, on the day rent is due).
landlord does not have to make a formal demand if the rent is at least 6 months in arrears
- If rent is still not paid, landlord can seek a court order for possession.
- If it is commercial premises, the landlord may effect forfeiture by peaceful re-entry.
How can a landlord forfeit a lease due to breach of covenants?
- After right of entry has arisen, landlord can serve a s.146 notice.
S.146 notice specifies the breach, requires a remedy, requires compensation
- If the tenant fails to remedy, the landlord can seek a court order for possession / attempt peaceful re-entry (commercial premises).
If there is commercial re-entry as a result of forfeiture, what is needed?
A court order is not needed
Must simply show that it is a commercial premises.
Also, re-entry cannot take place while the tenant is on the premises.
How does a landlord waive their right to forfeit a lease?
Where landlord:
- knows of the breach
- does something to recognise that the lease continues to exist
- communicates that act to the tenant
What are some examples of waiving right to forfeiture?
Demanding / accepting rent
Offering repairs
How can a tenant apply for relief if there has been non-payment of rent?
If all arrears and landlord costs are paid, the tenant will be entitled to keep the lease
How can a tenant apply for relief if there has been breaches of other covenants?
Tenant can apply for a court order for relief at any time before the landlord re-enters the property.
Can only apply for relief once the breach has been remedied.
If there has been non-payment of rent or breach of covenants in a commercial lease, what can the landlord do?
Can effect peaceful re-entry (must re-enter when premises are empty).
What are the methods of termination for a lease?
- expiry of a fixed term
- termination by notice
- surrender and merger
- disclaimer
- frustration
- estoppel
- transfer of reversion
What is surrender and merger to terminate a lease?
Applies when there is a fixed term tenancy without a break clause.
Parties can unilaterally agree to bring the tenancy to an end through a surrender by deed.
Handing keys to the landlord and leaving is also valid surrender.
What is disclaimer to terminate a lease?
Tenant may, in some circumstances, be able to disclaim the lease and be discharged from future liability.
Usually arises under statute - e.g., company going into liquidation/personal bankruptcy.
What is frustration?
An event that occurs due to the fault of neither party rendering the contract impossible to perform.
What is estoppel as a method to terminate a lease?
Where there is no written deed, but the landlord accept possession of the property at the tenant’s request (estoppel prevents either party denying that surrender has taken place)
What is transfer of the reversion as a method of terminating a lease?
Tenant may agree to give up possession to the landlord.
Landlord may agree to transfer the reversion to the tenant.
Leasehold and freehold interest fuses.
What is the relevant date for leasehold covenant responsibility?
1 January 1996
What is the principle regarding responsibility for leasehold covenants for leases dated before 1 January 1996?
The original landlord and original tenant remain liable to each other under the lease for the entire lease term (even if lease is assigned).
This is due to the doctrine of privity of contract - parties to the deed made promises to each other, and therefore remain liable to each other.
If there has been a breach of covenant on an old lease, who can the landlord pursue?
The new tenant or the old tenant
For leases dated after 1st January 1996, what is the position as to leasehold covenants?
Tenants are automatically released from their covenants upon assignment.
Assignor remains liable for any breach of covenant that occurred before assignment.
For new leases, what is the position if there has been a breach of covenant before assignment?
Assignor remains liable for any breach of covenant that occurred before assignment.
How can a landlord protect themselves in a new lease?
Can ask the outgoing tenant to enter into an authorised guarantee agreement whereby the outgoing tenant will act as a guarantor for their immediate successor in title
Is a landlord released from their covenants on sale?
No automatic release for the landlord.
Landlord can apply for a release of landlord covenants on the sale of the freehold reversion.
What remedies does a landlord have for non-payment of rent?
- debt action
- taking possession of goods
- forfeiture
- deduction from the tenant’s rent deposit
- commercial rent arrears recovery
If a landlord is pursuing debt action for non-payment of rent, how many years of arrears can they recover?
6 years
If landlord is suing a former tenant for non-payment of rent in relation to debt action, what must be done?
The landlord must serve notice on the former tenant within 6 months of the breach occurring
How is Commercial Rent Arrears Recovery used for non-payment of rent
Landlord can use CRAR to recover unpaid rent (can take control of tenant’s property and sell them).
Cannot be used in forfeiture.
If attempting to use CRAR, how much notice must be given?
Landlord must give 7 days notice
Tenant must be in at least 7 days of arrears
What are landlord remedies for other breaches?
- injunctions
- specific performance (discretionary)
- damages (should not exceed the repair costs of the breach)
- forfeiture
- pursue guarantors
- self help
If a tenant is in breach of repairing obligations, what should the landlord do?
Serve a s.146 notice:
- Specifying the breach
- Requiring the breach to be remedied within a reasonable time
- Requiring the tenant to pay compensation to the landlord
What is the purpose of a s.146 notice?
To warm the tenant of the landlord’s desire to forfeit, and give the tenant time to rectify the breach
How can a landlord use a self-help clause?
A self-help clause allows the landlord to enter the premises and carry out repairs if a tenant is in breach of covenant to repair/maintain.
Must be expressly added.
- Landlord can serve notice on the tenant, specifying the breach and requiring them to repair.
- If tenant fails to do so, landlord can enter the premises to carry out the work and recover costs.
What are the main tenant remedies for other breaches?
- injunctions
- specific performance
- damages (restoring to pre-breach position)
- repudiation (serious breach allowing innocent party to disregard the contract)
- set off
How can a tenant use set off?
- Tenant must give the landlord notice of their failure to carry out the repairing covenants
- If ignored, tenant can carry out the repairs themselves and deduct the cost in set off against any rent due.
If a rent deposit is used, what is needed?
A separate deposit account
A separate document that sets out the terms called a ‘rent deposit deed’
If a company is taking on a lease, what may be required by the landlord to guarantee performance?
A personal guarantee by directors
What does it mean to deduce title?
Producing register entries and title plan (registered land)
Producing an epitome of title (unregistered land)
What is included in a contract pack for the grant of a new lease?
- agreement for lease
- landlord’s freehold title
- LIF / CPSE
- replies to enquiries
- management company details
- consent of lender for granting a lease
- new build warranty (if up to 10 years old)
- planning permission / buildings regulation consent
- service charge budgets
What is the final version of a lease called?
Engrossment
What is an engrossment made up of?
Original - signed by the landlord
Counterpart - signed by the tenant
at the end, parties swap so tenant holds original
When is additional SDLT payable on the grant of a new lease?
If total rent over the life of the lease (net present value) is more than £250,000, there will be an additional 1% SDLT payable on the portion over £250,000.
If an incoming tenant has bought a new lease with a mortgage, what must be done?
Notice of the mortgage must be served in the landlord
What is a license to assign?
Where the existing tenant applies to the landlord for their authority to assign (they will make undertakings to pay the landlord’s fees for producing the license).
Must be expressly added into the lease.
This is a right that enables the landlord to make checks to ensure the incoming tenant can make rent payments.
What information is included in a license to assign?
Parties (landlord / tenant / incoming tenant)
Details of the lease
Conditions to landlord’s consent
Timeframes
How is a guarantee evidenced?
The landlord and guarantor will enter into a separate deed of guarantee
When is an AGA void?
Where if seeks to impose further liability on the outgoing tenant than is contained in the lease
If an existing leasehold title is being transferred, what transfer is used?
TR1
If the lease is unregistered and has less than 7 years left to run, can use a deed of assignment instead
When giving a full title guarantee in a leasehold transaction, what is the seller warranting?
They are selling the property free from all charges.
The lease is subsisting at the time of the transaction.
There is no subsisting breach of condition.
Nothing at that time would render the lease liable to forfeiture.
If an outgoing tenant has paid their rent and service charge in advance, and now want to assign the lease, what should be done?
Solicitors should negotiate a retention if there is likely to be a service charge shortfall
On the assignment of a lease, what will the income tenant receive on completion?
Original lease
Original share certificate (if management company)
Original license to assign
Signed TR1 / deed of assignment
Stock transfer form (if management company)
What must an incoming tenant’s solicitor do once the assignment of a lease is complete?
Serve notice of the assignment to the landlord
When is a license to underlet needed?
If a lease contains a provision that the landlord must give their consent to underletting
Who is the license to underlet signed by? What is the consequence of this?
Signed by tenant + landlord + sub-tenant
Creates privity of contract, so parties can sue and be sued by each other.
If a person is buying a property from an estate, what should be obtained?
A statement in the conveyance that no previous assents have been made.
If buying from a beneficiary, beneficiary should have an assent in their favour from the PRs.
What does the security of tenure provisions rule?
Under LTA 1954, a business tenant is protected at the end of their lease and does not have to vacate the property unless the landlord uses a statutory method of termination.
When do the security of tenure provisions apply?
- There is a tenancy
- Tenant is in occupation
- Tenant carries out business at the property
What ‘leases’ are excluded from the security of tenure provisions?
- licenses
- tenancies at will (not for a fixed term)
- agricultural holdings
- mining leases
- service tenancies
- fixed term tenancies for fewer than 6 months
- tenancies that have been contracted out
In order to contract out of a tenancy, what three requirements must be complied with?
- Landlord’s health warning (health warning notice)
- Tenant declaration
- Reference in the lease
When must a landlord’s health warning notice be served?
At least 14 days before the tenancy commences
What is a tenant declaration to contract out?
Tenant signs a declaration confirming that they have received the health warning
Does a tenant declaration to contract out need to be signed in the presence of a solicitor?
No.
However, if the landlord serves the health warning less than 14 days before commencement of the tenant, the tenant must sign a formal statutory declaration in the presence of an independent solicitor.
What does ‘reference in the lease’ mean in relation to contracting out?
Lease must make reference to:
- health warning
- tenant’s declaration / statutory declaration
- agreement to contract out
How can a 1954 Act protected lease be brought to an end?
- forfeiture
- surrender
- s.25 notice
- s.26 notice
- s.27 notice
How can forfeiture by the landlord bring a 1954 Act protected lease to an end?
The right of forfeiture must be expressly added into the lease.
Landlord can do so in the event of tenant default.
How can surrender bring a 1954 Act protected lease to an end?
By both agreeing to give up the lease by entering into a deed of surrender
What is a s.25 notice?
A notice informing the tenant that the landlord requires the premises back at the end of the term.
When must a s.25 notice be served?
Within 6-12 months before the landlord wants the tenancy to end
What are the two options that a s.25 notice can indicate?
- That landlord will not oppose the tenant’s application for a new lease (friendly), but wants to create a new lease with different terms.
either party must then apply to the court for a new lease after the notice is served
- Landlord will oppose the tenant’s application for a new tenant and state their grounds for opposing.
either party can make an application to court at any time after the landlord served the notice
What is a s.26 notice?
When the tenant serves notice on the landlord requesting a new lease
When must a s.26 notice be served?
Must be served within 6-12 months of the end of the term
How long does a landlord have to oppose the s.26 notice?
2 months to inform the tenant whether they intend to oppose
If a landlord wants to oppose a s.26 notice, what must they do?
Must state one of the statutory grounds
What is a s.27 notice?
A notice served by the tenant stating that they do not want to renew the tenancy.
How much notice must be given with a s.27 notice?
Tenant must give at least 3 months notice to their immediate landlord
What are the statutory grounds for opposition?
A) tenant’s failure to carry out repairing obligations (discretionary)
B) tenant’s persistent delays in paying rent (discretionary)
C) tenant’s substantial breaches of other obligations (discretionary)
D) suitable alternative accommodation available (mandatory)
E) landlord requires the whole property for subsequent letting (discretionary)
F) landlord intends to demolish/reconstruct the premises (mandatory)
G) landlord intends to occupy the holding (mandatory)
What does it mean when some of the statutory grounds are discretionary?
Even if the landlord makes out one of these grounds, the court can choose to grant a new tenancy
If tenant is entitled to compensation due to a no-fault ground, how is this calculated?
If tenant has been in occupation for less than 14 years = compensation calculated as rental value of the premises (i.e., one year’s rent)
If tenant has been in occupation for more than 14 years = compensation calculated as twice the rental value (i.e., two year’s rent)
If a new lease is ordered by the courts, what is the maximum term that can be ordered?
15 years
If court orders a new lease, when will it commence?
Not until 3 months after the proceedings have ended
What is the criteria for overreaching?
1) bona fide purchaser is buying the legal estate
2) bona fide purchaser is paying money to all trustees
3) there are at least two trustees
If the criteria for overreaching has not been met, what is the consequence?
The beneficial may have an interest in the property.
It may be necessary to negotiate with them to enable the purchaser to keep the property.
What are the different ways of creating an easement?
1) express grant or reservation
2) implied grant
3) presumed grant (prescription)
How can easements be granted impliedly?
1) easements by necessity
2) easements of common intention
3) implied under Wheeldon v Burrows
4) easements under s.62 LPA 1925
How are easements granted by necessity?
Where the person cannot use the land without the easement (e.g., right to way to get into landlocked tenement)
When is an easement by necessity extinguished?
When the necessity stops
E.g., an alternative access point is created and terminating the express easement by express agreement by the parties
What is an easement by common intention?
Where there was intention to create and grant an easement, but party forgot to include it
What is an easement that is implied under Wheeldon v Burrows?
Granted by implication if, prior to the sale, there was a common owner-occupier of both tenements.
• Must be shown that it is continuous and apparent (obvious).
• Necessary for the reasonable enjoyment of the property.
• In use at the date of the transfer.
What is an easement implied under s62 LPA 1925?
Converts a quasi-easement (granted and used by the same person) into a full easement on the sale of the property.
What is an easement by prescription?
Continuous use of the easement for 20 years without interruption or protest.
Use must be known to the landowner.
What is an express grant of easement?
Must be created by deed. If not created by deed, equity may step in if the agreement is in writing, contains all agreed terms, and signed by both parties.
Must be granted for a period equivalent to a fee simple absolute in possession, or a term of years absolute = either for a fixed period, or forever, but not for life.
Must be registered at HMLR.
What are legal easements in unregistered land?
Overriding interests, meaning they bind any subsequent purchaser
When will an easement bind a purchaser in registered land?
If:
- It is noted on the title
2) the buyer actually knows of it
3) it is obvious on a reasonable inspection
4) it has been exercised within one year before the disposition
When does an equitable easement arise?
When the easement’s term is uncertain or where formalities are not complied with
What formalities must an equitable easement comply with to be enforceable?
Must be registered on the charges register of the servient title and on the property register of the dominant title (registered land)
Must be protected as a Class D Land Charge (unregistered land)
How can an easement be terminated?
By termination rights in the terms of the easement
Both parties agreeing to formally extinguish it
How can a restrictive covenant be removed by agreement?
A ‘deed of release of restrictive covenant’ can be drawn up and signed by the dominant and servient owners
What must be shown for an easement to be implied by virtue of Wheeldon v Burrows?
an easement may be implied by grant from a quasi-easement if it was:
- continuous and apparent
- necessary for the enjoyment of the property conveyed and
- enjoyed by the seller when he owned both the dominant and servient land
How is a joint tenancy severed? (3 methods)
Written notice of severance = served on all co-owners (left at their last known home or business address, or posted), stating an irrevocable intention to sever immediately.
Act of severance operating on its own share = total alienation (disposition of your share to a third party), partial alienation (taking out an equitable mortgage), involuntary alienation (bankruptcy), divorce proceedings.
Severance by mutual agreement through course of conduct = e.g., murdering a co-owner that you own property with in a joint tenancy.
If X Y and Z own a joint tenancy, and X serves a notice of severance, what is the effect on how the property is sold?
X will hold the property as a tenant-in-common (one-third)
Y and Z will continue to hold the remainder of the property as joint-tenants
If a severed tenant-in-common would like to sell their share to the remaining joint-tenants, what is the process?
- Parties will need to enter into a contract (all parties will need to consent and sign the contract)
- If applicable, lender will need to be notified of the intended transfer and give their consent - parties should ask lender if they have sufficient affordability to take over the mortgage
- TR1 will need to be completed (transfer)
- AP1 will need to be completed (changes details on the property register)
- If applicable, SDLT will need to be paid
What is the SDLT liability rule if more than one property is owned?
If purchasing a property will mean that more than one property is owned, an additional 3% on top of the general SDLT rates will be applied
What should a client be advised if purchasing both a cheaper and more expensive property (in terms of SDLT)?
The second property purchased should be the cheaper property (meaning the additional 3% SDLT payable is applied to the second property)
When can a solicitor act for two clients even where there is a risk of conflict of interest?
If the two clients:
- have a common interest
OR
- are competing for the same objective
+ - consent in writing
OR
- sols put safeguard in place to protect client’s confidential information
+ - sols are satisfied that it is reasonable to act
When should solicitors not act?
If there is a conflict of interest, or if there is a risk of a conflict of interest
