M IX

Question 1

A solicitor acting for a buyer of a property has investigated the unregistered title produced by the seller’s solicitor as part of the contract package. The solicitor has noted that the root of title shows Peter Green and Brenda French as the buyers. The sellers in the draft contract are shown as Peter Green and Brenda Green. The buyer’s solicitor raises a pre-contract enquiry asking the seller’s solicitor to remedy the break in the chain of ownership. Peter and Brenda married after they purchase the property.

What is the most likely solution to resolve this issue?

A transfer between the named parties.

A deed of change of name for Brenda French.

A passport or other suitable identification document for Brenda French.

The marriage certificate between Peter Green and Brenda French.

A statutory declaration by Brenda French.

Answer 1

(D) The easiest way to resolve the issue is by obtaining and producing a copy of the marriage certificate for Peter and Brenda, as that would be sufficient explanation for the change of name from Brenda French to Brenda Green. (A) and (B) could be possible solutions in other circumstances (Peter might have transferred the property into the joint names of himself and Brenda; Brenda might have changed her name) but here, you are told that the parties got married, so the most likely solution for this issue is to produce a copy of the marriage certificate. (C) is incorrect as a passport is not a document of title. (E) is incorrect because a statutory declaration would not deal with a change of name.

Question 2

A firm is instructed to act for three clients who wish to set up a company. They are all planning to contribute equal capital and take equal shareholdings.
Can one solicitor draw up the shareholders agreement on the clients’ behalf?

No, because there is an inherent conflict between the interests of each client.
Yes, because there is no actual conflict.
Yes, because this will be cheaper and more convenient for the clients.
Yes, because there is no significant risk of conflict, but the solicitor will need to stop acting for some or all of the clients if this changes.
No, because this would require SRA permission.

Answer 2

(D) If the solicitor takes the view that the clients’ interests are the same (for example, that they are all taking equal benefit and responsibility, and there is no need to negotiate) and there is no significant risk of a conflict arising, then the decision can be taken to act, but only on the basis that the solicitor will monitor the situation and stop acting if a conflict subsequently arises. (A) is incorrect because whether a conflict exists, or is likely to arise, is a matter of fact based on the circumstances. (B) is incorrect because even if there is no actual conflict, a solicitor will be prevented from acting if there is a significant risk of conflict. (C) is incorrect because it does not address the concern regarding a conflict of interest. (E) is incorrect because the SRA does not give permission to act and instead expects the solicitor to make a judgement based on regulatory duties and the facts of the matter.

Question 3

A paralegal in a busy conveyancing department is working in the pre-completion team. Their principal has taken the afternoon off and has left a note for the paralegal requesting that they apply for the mortgage advance. The paralegal has looked through the file and is not sure how to do this.

What should the paralegal do to comply with their principal’s request?

Submit the pre-completion searches.

Submit the online application to the lender.

Submit the request for mortgage advance to the lender.

Submit the certificate of title to the lender.

Submit the title guarantee to the lender.

Answer 3

(D) To apply for a mortgage advance, a certificate of title (‘CoT’) is submitted to the lender. A CoT involves the solicitor confirming a series of statements which confirm to the lender that the title is good and marketable. The CoT also acts as a request for a drawdown of the mortgage advance. Thus, the remaining answers are incorrect.

Question 4

A bank is notified that one of its borrowers has gone into liquidation and is reviewing its security for the money owed by the borrower. Although the bank dutifully registered each charge with Companies House, it is concerned that one of its loans might be unsecured.
Which of the following loans is most likely to be automatically unsecured?

A loan to buy office premises five years ago; a floating charge was taken over the premises a year after the loan was made.

A loan of operating capital made six months ago; a floating charge was granted when the loan was made.

A loan to cover an overdraft eight months ago; a floating charge was granted six months after the overdraft loan was made.

A loan granted 12 months ago to enable the company to purchase new premises; a floating charge was taken over the premises.

A loan to purchase plant and machinery; a floating charge was granted three years ago when the loan was made.

Answer 4

(C) The floating charge granted to secure the existing overdraft is unsecured. A floating charge is automatically void if it was created for no consideration within 12 months ending with the onset of insolvency and at a time the company was insolvent or became insolvent as a result. As this floating charge was granted for no new consideration, it could be void if the company was insolvent at the time. (A) and (E) are incorrect as the charges in each were granted outside the relevant timeframe for attack by a liquidator. (B) and (D) are incorrect as the floating charge in each was given for fresh consideration.

Question 5

A solicitor’s firm had until recently acted for a commercial business, Client A, in general corporate-commercial matters. The solicitor had not been personally involved in those matters. The solicitor has now been instructed to act for another business, Client B, in its bid to take over Client A’s business. The firm holds confidential information about Client A that would be material in Client’s B’s matter.

Which of the following statements best describes whether the solicitor can act for Client B in accordance with the SRA Code of Conduct?

Because Client A is no longer a client of the firm, the solicitor is entitled to act against their interests and make full disclosure of any material information to Client B.

Because Client A is owed a duty of confidentiality by the firm, the solicitor cannot act against Client A’s interests.

Because Client A and Client B have adverse interests, the solicitor must either seek Client A’s written consent to her acting and to the protection of their information, or she must put in place effective measures so that there is no real risk of disclosure.

Because the solicitor did not personally act for Client A, the solicitor is entitled to act against Client A’s interests.

Because of the connection between the instructions from Client A and Client B, the solicitor is prohibited from acting for Client B.

Answer 5

(C) Client A (the former client) and Client B (the current client) have adverse interests and the solicitor must comply with the SRA Codes, which state that a solicitor must not act for a client in a matter where that client has an interest adverse to the interest of another current or former client for whom the solicitor (or their business or employer) holds confidential information which is material to that matter, unless: (1) effective measures have been taken which result in there being no real risk of disclosure of the confidential information (for example, putting structural safeguards in place so that the Client B team does not have access to the Client A files); or (2) the current or former client whose information the solicitor holds has given informed consent, given or evidenced in writing, to the solicitor acting, including to any measures taken to protect their information. (A) is incorrect because the firm continues to owe a duty of confidentiality to former clients, and the duty of confidentiality takes precedence over the duty of disclosure. (B) is incorrect because a solicitor can act against the interests of a former client provided that the former client’s confidential information is protected from misuse. (D) is incorrect because the entire firm owes a duty of confidentiality to Client A, regardless of which solicitors worked on those matters. (E) is incorrect because the conflict between confidentiality versus disclosure does not necessarily prevent the solicitor from acting, but she must ensure that her actions comply with the SRA Codes, which are predominantly concerned with the protection of confidential information from misuse.

Question 6

A solicitor is acting for a client in relation to the purchase of a property. The buyer and seller agree a 10% deposit on exchange of contracts and that a solicitor will hold the deposit as agent for the seller.
Under this agreement, which solicitor will hold the funds and what is the consequence of the deposit being held by a solicitor as agent for the seller?

The seller’s solicitor will hold the deposit and pay over the deposit to the seller on completion.

The buyer’s solicitor will hold the deposit and pay over the deposit to the seller on completion.

The seller’s solicitor will hold the deposit and may pay over the deposit to the seller immediately after exchange.

The buyer’s solicitor will hold the deposit and may pay over the deposit to the seller immediately after exchange.

The seller’s solicitor will hold the deposit and may pay over the deposit to the seller immediately after the property is registered in the buyer’s name.

Answer 6

(C) If a buyer and seller agree that a deposit will be held by a solicitor as agent, it means that the buyer’s deposit will be held by the seller’s solicitor and may be paid over to the seller immediately after exchange has taken place. This may occur, for example, when the buyer is buying a new build property. It presents a risk to the buyer because if the seller spends the money between exchange and completion, the buyer may have difficulty recovering the deposit in the event of the seller’s default. Thus, the standard conditions of sale provide that on exchange of contracts, the buyer’s deposit is held by the seller’s solicitor as stakeholder (meaning the deposit will be paid to the seller only on completion). (A) is incorrect because this answer choice describes the consequence when the deposit is held as stakeholder, not as agent. (B) and (D) are incorrect because the buyer’s solicitor does not hold the deposit after exchange; the seller’s solicitor does. (E) is incorrect because, as explained above, when the deposit is held as agent it may be paid over the seller immediately after exchange.

Question 7

A man is selling his property which has a large garden. There is a rough track at the bottom of the garden which has been created by the constant passing over the land by the man’s neighbour. The man has let his neighbour take a shortcut over the land for 15 years, though arrangement has never been formalised.

Does the man have a duty to disclose this use in the contract with the buyer?

Yes, because otherwise the seller would be liable for nondisclosure.

No, because the use is a latent defect, and latent defects need not be disclosed.

No, under the doctrine of ‘caveat emptor’.

No, because the use is a patent defect and patent defects need not be disclosed.

Yes, because the use is a patent defect and patent defects must be disclosed.

Answer 7

(D) The seller need not disclose the use, as it is a patent defect. A right-of-way which is visible, such as the one in the question, is a patent defect. It does not need to be disclosed in the contract because the seller’s duty of disclosure does not extend to patent defects. (Note that a prudent solicitor would advise the seller to disclose the right-of-way anyway – to avoid any possible misrepresentation claim – but disclosure is not actually required under the circumstances.) (A) is incorrect because for the reasons just explained – disclosure is not required here, so non-disclosure will not result in liability. (B) is incorrect, both because the defect is patent (obvious) rather than latent (not obvious), and because the rule is the opposite of that stated – latent defects must be disclosed. (C) is incorrect as the doctrine of ‘caveat emptor’ (that is, let the buyer beware) is the reason that the defect does not need to be referred to in the contract – because the defect is observable, the doctrine of caveat emptor applies and the buyer has the burden of discovering the defect. (E) is incorrect because it has the rule backwards – patent defects need not be disclosed, as discussed above.

A woman died intestate last week. She was unmarried but had lived for the last 10 years with her long-term partner and her partner’s daughter from a previous relationship. The woman was also survived by a son, and her parents are still alive.

Question 8

A woman died intestate last week. She was unmarried but had lived for the last 10 years with her long-term partner and her partner’s daughter from a previous relationship. The woman was also survived by a son, and her parents are still alive.

Who is entitled to share in the distribution of the woman’s estate?

The woman’s son only.

The woman’s partner and her son only.

The woman’s son and parents only.

The woman’s partner and son and the partner’s daughter only.

The woman’s son and the partner’s daughter only.

Answer 8

(A) Only the woman’s son will share in the intestate distribution. The woman died intestate with no surviving spouse, as she was not legally married to her partner. In this situation, the woman’s issue, which is her son, is wholly entitled to her estate. (B) is incorrect as an unmarried cohabitant is not entitled to a share of a deceased’s estate under the laws of intestacy. (C) is incorrect. If a person dies intestate and they have no spouse, their estate passes to their issue; parents take only if the deceased died both without a spouse and without surviving issue. (D) and (E) are incorrect for the reason stated with regard to (B). The partner and the partner’s daughter have no entitlement under the intestacy rules.

Question 9

A man died intestate. His wife obtained a grant of letters of administration and began administering the man’s estate, which is to be shared between her and their son and daughter. However, the wife died shortly after obtaining the grant, leaving a will which appoints her son as executor. The son has now obtained a grant of probate for the wife’s estate. The daughter is still alive.

Which of the following best describes how the administration of the man’s estate can be progressed?

The son alone is required to administer the man’s estate under a chain of representation.

The daughter can complete the administration of the man’s estate under the existing grant of letters of administration.

The daughter alone is entitled to apply for a new grant for the man’s estate.

A grant de bonis non is needed to complete the administration of the man’s estate.

The son alone is entitled to apply for a new grant for the man’s estate.

Answer 9

(D) A grant de bonis non is needed to complete the administration of the man’s estate. A grant de bonis non is a second grant made to allow the completion of the administration of the deceased’s estate following the death of the sole or last personal representative. (A) is incorrect because there is no chain of representation. A chain of representation occurs when a sole executor dies and that executor’s executor takes a grant of probate. Because the man died intestate, there was no executor of his estate; instead his wife was an administrator, and chain representation does not apply. (B) is incorrect. It would not be possible for the daughter to finish the administration of the estate under the existing grant of letters of administration. A new grant is required. (C) and (E) are incorrect. As they are both children of the deceased, the son and the daughter are equally entitled to apply for the new grant

Question 10

A woman made a will several years ago, including the following provisions:

(1) I give my XYX plc shares to my son.
(2) I give the remainder of my estate to my husband.

There are no other relevant clauses. The woman died recently. Her son died last year but is survived by his wife and three children of his own.
Which of the following best describes entitlement to the woman’s estate?

The husband will inherit the entire estate.

The son’s wife will inherit the XYZ plc shares, and the husband will inherit the remainder of the estate.

The XYZ plc shares will be divided equally between the son’s wife and the woman’s husband. The husband will inherit the rest of the estate.

The XYZ plc shares will be distributed under the intestacy rules.

The XYZ plc shares will be divided equally between the son’s three children. The husband will inherit the rest of the estate.

Answer 10

(E) The XYX plc shares will be divided equally between the son’s three children, and the husband will inherit the rest of the estate. If a beneficiary has predeceased the testator, the gift to them will lapse. However, if a gift is made to the testator’s issue who die before the testator and who leave living issue of their own, the living issue will receive the gift. Consequently, the gift of shares to the predeceased son will pass to the son’s three children in equal shares. The husband will receive the remainder of the estate. (A) is therefore incorrect. (B) and (C) are incorrect because the gift to the son passes to his issue-the three children-and not his spouse. The husband also has no entitlement to the shares. (D) is incorrect because the intestacy rules will not apply. Even if the gift to the son lapsed, the shares would fall into the residue and therefore pass to the husband.

Question 11

A woman died intestate six months ago. She was unmarried and had one daughter who inherited her entire estate under the intestacy rules. However, a son of the woman has now come forward and is seeking to claim a share of the estate. None of the woman’s family, including her brother who acted as administrator of her estate, knew of the existence of the son previously.

Which of the following would fully protect the woman’s administrator from liability for the son claiming a share of the estate?

The administrator obtained an indemnity from the daughter before distributing the estate.

The administrator placed appropriate advertisements and waited six weeks from the date of the advertisements before distributing the estate.

The administrator obtained a Benjamin Order.

The administrator placed appropriate advertisements in the London Gazette and waited at least two months from the date of the advertisements before distributing the estate.

The administrator waited six months from the issue of the grant of probate before distributing the estate.

Answer 11

(D) The administrator is fully protected from the son’s claim if he placed appropriate advertisements and waited at least two months from the date of the advertisements before distributing the estate. Under section 27 Trustee Act 1925, a personal representative can receive protection from claims by unknown creditors and beneficiaries by advertising the deceased’s death in the London Gazette, a local newspaper, and any other appropriate newspaper. The personal representative must then wait at least two months from the date of the advertisements in order to receive protection. (A) is incorrect. An indemnity provides some protection, but there is a risk that the daughter might have insufficient funds to cover the indemnity payment. Consequently, this does not give full protection to the administrator. (B) is incorrect. Although advertisements provide protection from claims by unknown beneficiaries, the time period that the administrator must wait is two months (rather than six weeks) from the date of the advertisements before distributing the estate. (C) is incorrect. A Benjamin Order provides full protection from a future claim by a known beneficiary. Here, the son is an unknown beneficiary, and so a Benjamin Order would not be relevant. (E) is incorrect. Waiting six months from the issue of the grant of probate protects against claims under the Inheritance (Provision for Family and Dependants) Act 1975, which seek to challenge the estate distribution. However, the son would appear not to be eligible to make such a claim, as he was not being maintained by his mother

Question 12

A man died last month. He made a will in 2017, appointing his brother and sister as his executors. The will leaves the man’s entire estate to his mother, brother, and sister, and his brother’s 19-year-old daughter. The man’s brother died last year. The man married a new spouse in 2019.
Who has the best right to apply for a grant of representation to the man’s estate?

The sister only.

The sister and the mother only.

The man’s spouse only.

The man’s sister and his spouse only.

The man’s sister and his brother’s 19-year-old daughter only.

Answer 12

The man’s spouse has the best right to apply for a grant of representation. The man’s 2017 will was automatically revoked when he got married in 2019. Since the facts do not indicate the man replaced his 2017 will, he has died intestate, and the appointment of executors under the 2017 will is no longer valid. Instead, the man’s estate will be administered under a grant of letters of administration. The order of entitlement to a grant under rule 22 of the Non-Contentious Probate Rules applies. Under this order, a surviving spouse or civil partner is at the top of the list. Next are issue of the decedent, then parents, and then surviving brothers and sisters. But as the question asks for who has the best right to apply, it is the man’s spouse alone. Therefore, (A), (B), (D), and (E) are incorrect.

Question 13

A man died last month. He made a will in 2017, appointing his brother and sister as his executors. The will leaves the man’s entire estate to his mother, brother, and sister, and his brother’s 19-year-old daughter. The man’s brother died last year. The man married a new spouse in 2019.
Who has the best right to apply for a grant of representation to the man’s estate?

The sister only.

The sister and the mother only.

The man’s spouse only.

The man’s sister and his spouse only.

The man’s sister and his brother’s 19-year-old daughter only.

Answer 13

The man’s spouse has the best right to apply for a grant of representation. The man’s 2017 will was automatically revoked when he got married in 2019. Since the facts do not indicate the man replaced his 2017 will, he has died intestate, and the appointment of executors under the 2017 will is no longer valid. Instead, the man’s estate will be administered under a grant of letters of administration. The order of entitlement to a grant under rule 22 of the Non-Contentious Probate Rules applies. Under this order, a surviving spouse or civil partner is at the top of the list. Next are issue of the decedent, then parents, and then surviving brothers and sisters. But as the question asks for who has the best right to apply, it is the man’s spouse alone. Therefore, (A), (B), (D), and (E) are incorrect.

Question 14

An executor is administering the estate of a man who died recently. The man’s debts total £50,000. The will makes the following gifts:

A valuable watch (worth £50,000) to the man’s brother;
Quoted shares (worth £50,000) to the man’s daughter; and
The residuary estate (worth £40,000) to the man’s wife.

Which of the following best explains the legal position with respect to payment of the man’s debts?

The man’s debts will be paid in full, using only the quoted shares
The man’s debts will be paid in full, drawing proportionately from the watch, shares, and residuary estate.

The man’s debts will be paid in full, drawing proportionately from the watch and the shares.

The man’s debts will be paid in full, using the whole residuary estate and then drawing proportionately from the watch and the shares for the remainder.

The man’s debts will be paid in full, using only the watch.

Answer 14

(D) The debts will be paid in full, using the whole residuary estate and then drawing proportionately from the watch and the shares for the remainder. This is a solvent estate, as there are sufficient assets to pay off the debts. Unsecured debts should be paid from property undisposed of by the will, if any, and then the residue. Here, there is no property undisposed of by the will because the man left the residuary estate to his wife. Thus, the £40,000 residuary estate will be used to pay the first £40,000 of the debts. Because the residuary estate does not cover the full debt, the remaining £10,000 will be raised using the watch and shares, with the same proportion being taken in respect of each asset. (A) is incorrect. This is not an insolvent estate, as there are sufficient assets to cover the debts. (B), (C), and (E) are incorrect because the residuary estate is used to pay debts before using any specifically gifted property

Question 15

A man’s will stated that his daughter was to receive a valuable painting. However, his personal representatives wrongly transferred the painting to the man’s son. The son has since sold the painting to a buyer who was unaware of this situation.

Which of the following correctly states the legal position in relation to this situation?

The daughter may bring a personal claim against the personal representatives only.

The daughter may bring a personal claim against the son only.

The daughter may bring a claim to recover the painting from the buyer only.

The daughter may bring a personal claim against the personal representatives and a claim to recover the property from the buyer.

The daughter may bring personal claims against the personal representatives and the son.

Answer 15

(E) The daughter may bring personal claims against the personal representatives and the son. When problems arise in the administration of an estate, beneficiaries can bring actions to recover loss suffered. The daughter can bring a personal claim against the personal representatives for failing to administer the estate correctly. The daughter can also bring a personal claim against the son, as a person who wrongly received estate assets. (A) and (B) are therefore incorrect. (C) and (D) are incorrect because a beneficiary’s right to trace and recover property is lost against a bona fide purchaser, as in this case..

Question 16

A woman died last month. She made a will last year, leaving all of her assets to her neighbour. The neighbour used to visit the woman regularly and assisted her with shopping and household tasks. The neighbour was present when the woman executed the will, which was witnessed by other neighbours. The woman’s son is very surprised not to receive anything under the will and believes that the neighbour pressurised the woman into making the will. He has been told by one of the witnesses that the neighbour frequently criticised the son for failing to visit the woman and kept urging the woman to leave her assets to the neighbour instead. The witness also once overheard the neighbour threaten to stop helping the woman if she did not leave all her assets to the neighbour.

Which of the following best describes whether the son can challenge the validity of the woman’s will?

The son can challenge the validity of the will because there is a presumption of undue influence.

The son has no basis on which to challenge the validity of the will.

The son can challenge the validity of the will on the basis of lack of capacity.

The son can challenge the validity of the will on the basis of lack of intention.

The son can challenge the validity of the will but would have to rebut the presumption of knowledge and approval.

Answer 16

(D) The son can challenge the will by raising an argument that the woman did not have the required intention to make the will, though his success is not certain. For a will to be valid, the testator must have acted with an intention to make the particular will. A challenger may prove lack of intention by showing the testator made the will as a result of duress (that is, as a consequence of a threat of force), due to fraud, or because of undue influence (that is, something that overpowered the testator’s volition). (A) is incorrect, as no presumption of undue influence applies to wills-undue influence is something that must be proved. (B) is incorrect, as it may be possible to challenge the will on the basis of undue influence. (C) is incorrect. A will may be challenged for lack of capacity (that is, that the testator was unable to make decisions for themselves because of impairments of the brain). However, there is nothing in the facts to suggest that the woman lacked capacity. (E) is incorrect. The usual presumption of knowledge and approval does not apply here, as there are suspicious circumstances.

Question 17

A man made a valid will a few years ago. After a recent argument with some of the beneficiaries, he has changed his mind about the distribution of his estate. He now wants to revoke his will.

Which of the following actions is most likely to fully revoke his will?

He writes “revoked” across the will.

He executes a new will.

He tears the will into small pieces.

He gives the will to a friend and asks them to burn the will the next time the friend builds a fire.

He draws a line through the front page of the will.

Answer 17

(C) The man can fully revoke his will by tearing it into small pieces. A will may be revoked through its intentional destruction by the testator. There is no need for witnesses to be present when the testator himself destroys the will. (A) and (E) are incorrect. The will must be fully destroyed in order to be revoked, and simply writing “revoked” on it or putting a line through parts of it is insufficient to achieve revocation. (B) is incorrect. A new will impliedly revokes the existing will, but only to the extent that it is inconsistent with the existing will. Therefore, executing a new will is not a definite way to achieve full revocation unless the new will contains an express statement that it revokes all earlier wills. (D) is incorrect. When a will is destroyed by someone other than the testator, the testator must be present in order for revocation to occur.

Question 18

A woman died last week, leaving her entire estate to her grandson in her will. On her death, the woman owned £15,000 in a bank account, held jointly with her partner. She had a life assurance policy, the benefit of which was written on trust for her partner. She owned a collection of valuable paintings. Lastly, she had a life interest in a trust fund which had been created under her father’s will.

Which of the woman’s assets will her grandson receive under her will?

£15,000 in the bank account, the life assurance proceeds, and the paintings only.

The life assurance proceeds, the paintings, and the interest in the trust fund only.

The paintings only.

£15,000 in the bank account, the paintings, and the interest in the trust fund only.

The paintings and the interest in the trust fund only.

Answer 18

C) The woman’s grandson will receive the paintings only. All other assets pass outside the will. The sum in the bank account is held jointly with the woman’s partner, and so it passes solely to him under the right of survivorship. The life assurance policy has been written on trust for the benefit of the woman’s partner, so he will receive the proceeds from this independently of the will. The woman had only a life interest in the trust fund. A life estate ceases on the beneficiary’s death, so there was no interest in the trust to pass on to the woman’s grandson. Therefore, the only asset passing through the woman’s will is her painting collection. Accordingly, (A), (B), (D), and (E) are incorrect.

Question 19

A woman made a will leaving a gift of “£10,000 to each of the children of my brother who attain the age of 18”. The woman has now died. The woman’s brother has two children, now aged 13 and 10.

Which of the following best describes how this gift will be distributed?

The gift will fail, as neither child has reached the age of 18.

Only the two current children of the brother will receive £10,000 when they reach the age of 18; future children of the brother will not qualify for this gift.

All current and future children of the brother will be entitled to £10,000 each, regardless of when they are born.

The gift will fail for uncertainty.

All current and future children of the brother who are born before the first child reaches the age of 18 will be entitled to £10,000 each.

Answer 19

(B) Only the two current children of the brother will receive £10,000 when they reach the age of 18; future children of the brother will not qualify for this gift. When a will leaves a gift to each member of a class who meets a condition, the class closes on the date of the testator’s death and includes only beneficiaries who were living on that date. Here, because the class closed on the date of the woman’s death, only the children currently aged 13 and 10 stand to benefit from this gift, provided they reach the age of 18. No future children of the brother will qualify as they do not form part of the benefiting class. (A) is incorrect. The gift will not fail, and any of the potential beneficiaries who reach the age of 18 will be able to claim the gift. (C) and (E) are incorrect. Only children of the brother who were born before the date of the woman’s death can benefit from the gift. Children born after this time do not form part of the benefiting class. (D) is incorrect. A gift such as this is valid.

Question 20

A woman made a will leaving a gift of “£10,000 to each of the children of my brother who attain the age of 18”. The woman has now died. The woman’s brother has two children, now aged 13 and 10.

Which of the following best describes how this gift will be distributed?

The gift will fail, as neither child has reached the age of 18.

Only the two current children of the brother will receive £10,000 when they reach the age of 18; future children of the brother will not qualify for this gift.

All current and future children of the brother will be entitled to £10,000 each, regardless of when they are born.

The gift will fail for uncertainty.

All current and future children of the brother who are born before the first child reaches the age of 18 will be entitled to £10,000 each.

Answer 20

(B) Only the two current children of the brother will receive £10,000 when they reach the age of 18; future children of the brother will not qualify for this gift. When a will leaves a gift to each member of a class who meets a condition, the class closes on the date of the testator’s death and includes only beneficiaries who were living on that date. Here, because the class closed on the date of the woman’s death, only the children currently aged 13 and 10 stand to benefit from this gift, provided they reach the age of 18. No future children of the brother will qualify as they do not form part of the benefiting class. (A) is incorrect. The gift will not fail, and any of the potential beneficiaries who reach the age of 18 will be able to claim the gift. (C) and (E) are incorrect. Only children of the brother who were born before the date of the woman’s death can benefit from the gift. Children born after this time do not form part of the benefiting class. (D) is incorrect. A gift such as this is valid.

Question 21

Two executors have been administering a man’s large estate following his death and have arranged for estate accounts to be prepared. The residuary beneficiaries are the man’s four children, but the man’s son is refusing to approve the estate accounts, as he is unhappy with his share of the estate.

Which of the following best states the legal position in relation to this situation?

The son can validly refuse to approve the estate accounts if they are not in the prescribed format.

The executors can ask the court to approve the estate accounts if the son refuses to do so.

The son’s refusal to approve the estate accounts does not affect the executors.

The approval of the other residuary beneficiaries is sufficient, even if the son refuses to approve the estate accounts.

The executors must pay the son’s share of the estate into court if he refuses to approve the estate accounts.

Answer 21

(B) The executors can ask the court to approve the estate accounts if the son refuses to do so. Estate accounts are important to show the residuary beneficiaries of the estate how their entitlements have been calculated. The approval of the estate accounts by the residuary beneficiaries is key, as the beneficiaries’ endorsement will formally discharge the executors with an agreement to indemnify them from all claims and demands. If a beneficiary refuses to approve the accounts, the executors may either ask the court to approve the estate accounts instead or pay the son’s share into court. (E) is, therefore, incorrect. Paying the sum into court is just one option that is available to the executors. They may also ask the court to approve the estate accounts. (A) is incorrect. There is no prescribed format for estate accounts, so the son cannot refuse to approve the accounts on this basis. (C) is incorrect. It will be important for executors to deal with the son’s refusal to approve the estate accounts as otherwise the executors are not discharged or indemnified against any future claims in relation to the estate. (D) is incorrect. The executors need all residuary beneficiaries to approve the estate accounts.

Question 22

A woman’s solicitor drafts a will on her instructions. The will makes a gift of £10,000 to the woman’s brother. Before the will is executed, the woman crosses through the original gift and writes in a gift of £20,000. No witness was present at the time that this change was made. After reading through the will, the woman invites two witnesses into the room and executes the will with the proper formalities. The original wording of the gift to the brother remains legible.
Which of the following statements best describes the effect of this alteration?

The brother will definitely receive £20,000.

The brother will definitely receive £10,000.

The brother will receive £20,000 if it can be proved that the alteration was made before the will was executed.

The alteration will invalidate the will and the intestacy rules will apply.
The brother will receive nothing.

Answer 22

(C) is correct. The brother will receive £20,000 if it can be proved that the alteration was made before the will was executed. An alteration made before the will’s execution is valid if there is evidence to show that the alteration was made before execution and if the will reads naturally after the alteration. Here, the woman made a pre-execution alteration to her will, which will be valid if it can be proved that this took place before the execution of the will. (A) and (B) are incorrect. It cannot conclusively be stated how much the brother will receive, as it is unclear from the facts provided whether there is evidence available to prove when the alteration was made. Therefore, it is unclear whether the brother is to receive the original or the amended sum. (D) is incorrect. This alteration will not make the will itself invalid. (E) is incorrect. Even if the alteration is not valid, the brother will still receive the original gift as the wording relating to this remains legible.

Question 23

A woman domiciled in the UK died with an estate worth £800,000. She left £600,000 of this estate to her civil partner and £200,000 to her daughter. The woman made a gift of £20,000 to her daughter two years before her death.

Which of the following statements is correct with respect to the woman’s estate?

The estate is not an excepted estate because its value is more than £325,000.

The estate would be an excepted estate if not for the lifetime gift to the daughter.

The estate is an excepted estate and does not have to file an inheritance tax account.

The estate is an excepted estate, and so the PRs have to deliver an account to HMRC within 12 months from the end of the month of the woman’s death.

The estate is not an excepted estate because the woman left the majority of her estate to her civil partner.

Answer 23

(C) The estate is an excepted estate and does not have to file an inheritance tax account. An estate which owes no inheritance tax (‘IHT’) and does not have to file a formal IHT account is called an excepted estate. To be excepted, the estate’s total gross value plus specified transfers cannot exceed either (1) the inheritance tax threshold, currently £325,000, or (2) £1 million if the net chargeable estate does not exceed the threshold. Here, the value of the woman’s estate plus specified transfers (the £20,000 gift to the daughter) does not exceed £1 million, and the net chargeable estate (after deducting the civil partner exemption) does not exceed the threshold of the woman’s nil rate band of £325,000. The estate is therefore excepted, and an account does not have to be filed. (A) is, therefore, incorrect. (B) is incorrect. The gift of £20,000 to the daughter is considered a specified transfer that must be added to the value of the estate. An estate can be excepted if specified transfers do not exceed £150,000 in the seven years before the deceased’s death. (D) is incorrect. No IHT account is required as this is an excepted estate. (E) is incorrect. The fact the woman left the majority of her estate to her civil partner increases the likelihood of the estate being excepted because the amount left to a partner can be deducted from the gross value of the estate under the spouse and civil partner exemption.

Question 24

A property owner wants to divide a house that he owns into three flats. The property owner wants the original flat owners – and all subsequent owners – to each be responsible for the repair and upkeep of their flats. The property owner would like to sell the flats on a freehold basis but is not sure whether the obligation for repair and upkeep will be enforceable against subsequent owners. He goes to see his solicitor for advice.

Which of the following best describes the advice that the property owner will receive in this regard?

The flats can be sold on a freehold basis because any subsequent owners will be bound by the original flat owners’ obligations to repair.

The flats cannot be sold on a freehold basis due to the difficulty of enforcing the positive obligations of upkeep and repair against subsequent owners.

The flats cannot be sold on a freehold basis because such covenants to repair may only be contained in a lease.

The flats can be sold on a freehold basis because the obligation to repair and upkeep will be a restrictive covenant enforceable against successors in title.

The flats can be sold on a freehold basis but the property owner must set up a building scheme to ensure the obligations are enforceable against successors in title.

Answer 24

(B) The flats cannot be sold on a freehold basis due to the difficulty of enforcing the positive obligations of upkeep and repair against subsequent owners. A positive covenant requires a positive act to comply (for example, to spend money). Generally, positive covenants bind only the original contracting parties. Here, the property owner wishes subsequent flat owners to comply with positive obligations to repair the flats. Due to the difficulty of enforcing positive covenants against subsequent freehold owners, the property owner would be well advised to sell the flats on long leases and retain the freehold. (A) is incorrect because, as explained above, the property owner wishes to impose positive obligations against subsequent flat owners. Positive covenants generally bind only the original contracting parties. (C) is incorrect because it is not true that such covenants may be contained only in a lease. The property owner may include positive covenants in his freehold transfers to the flat owners. However, these covenants may not easily be enforced against successors in title to the original flat owners. (D) is incorrect because, as explained above, the obligation to repair and upkeep requires positive action to comply, and therefore is a positive covenant rather than a restrictive one (for which no action is required to comply). (E) is incorrect because a building scheme is not relevant here. A building scheme may allow a buyer of benefitted land to enforce a restrictive covenant in equity.

Question 25

A solicitor has taken a phone call from a client who is buying a large property. The buyer tells their solicitor that the seller has agreed to include several large ornamental pots of plants in the sale. The buyer is keen to ensure that these items are not removed by the seller because they are large concrete pots and would be difficult to replace.
Which of the following best describes how to protect the buyer’s position?

The solicitor will amend the particulars of sale to ensure that the items are specified in the contract and that the seller is required to leave them at the property on completion.

The solicitor will not need to take any additional steps to protect their client’s position because the large ornamental pots are fixtures and, thus, the seller is obliged to leave them at the property on completion.

The solicitor will ensure that reference to the large ornamental pots is included in the transfer when the solicitor drafts on behalf of their buyer client.

The solicitor will ensure that a special condition is added to the contract which gives details of the items and which will require the seller to leave the items at the property on completion.

The solicitor will inform their buyer client that they are entitled to sue the seller if the large ornamental pots are removed because the seller has entered into a collateral contract by agreeing to leave them at the property on completion.

Answer 25

The solicitor will ensure that a special condition is added to the contract which gives details of the items and which will require the seller to leave the items at the property on completion.

Question 26

A man has decided to sell his property which he bought as a new build from a developer 12 years ago. For the first time since he bought it, the man has instructed an estate agent. The estate agent has said that the man does not need to commission an Energy Performance Certificate (‘EPC’). The man has the EPC he received when he bought the property.
Is the estate agent correct?

Yes, an EPC is not required because the property is still covered by a new build warranty.

No, because a new EPC is required whenever property is sold unless the property is a listed building.

Yes, an EPC is not required because the property is residential.

Yes, because there is already a valid EPC in existence.

No, an EPC is a legal requirement; even if one was produced when the property was first sold, it would have expired.

Answer 26

No, an EPC is a legal requirement; even if one was produced when the property was first sold, it would have expired.

Question 27

A property owner has a house with a large garden. An estate agent has told the property owner that the garden would be big enough for another house to be built. The property owner would like to build a second home and divide the property but presently does not have enough money to undertake the work. She telephones her solicitor for advice. The solicitor advises that they could obtain permission from the local authority so that the work can be commenced when the property owner obtains sufficient funds.

The property owner instructed the solicitor to obtain planning permission. The solicitor presented the property owner’s plans to the local authority, which granted detailed permission for the project.
Which of the following best describes the explanation of the results that the solicitor will give the client?

The owner must complete the development within two years from the time permission was granted.

The owner must start the development within two years from the time permission was granted.

The owner must complete the development within three years from the time permission was granted.

The owner must start the development within three years from the time permission was granted.

The owner must complete the development within five years from the time permission was granted.

Answer 27

A property owner has a house with a large garden. An estate agent has told the property owner that the garden would be big enough for another house to be built. The property owner would like to build a second home and divide the property but presently does not have enough money to undertake the work. She telephones her solicitor for advice. The solicitor advises that they could obtain permission from the local authority so that the work can be commenced when the property owner obtains sufficient funds.
The property owner instructed the solicitor to obtain planning permission. The solicitor presented the property owner’s plans to the local authority, which granted detailed permission for the project.
Which of the following best describes the explanation of the results that the solicitor will give the client?
The owner must complete the development within two years from the time permission was granted.
The owner must start the development within two years from the time permission was granted.
The owner must complete the development within three years from the time permission was granted.
The owner must start the development within three years from the time permission was granted.
The owner must complete the development within five years from the time permission was granted.

Question 28

A solicitor specialising in real estate matters has a verbal agreement to share 10% of their fees with a local estate agent. The estate agent referred a client to the solicitor and the matter has now completed. The solicitor informed the client at the outset of the matter that they would be sharing their fees with the estate agent, and the solicitor has now made the payment to the estate agent.

Were the solicitor’s actions in accordance with the SRA Standards and Regulations?

Yes, because fee sharing agreements are permitted in this type of matter.

No, because fee sharing agreements are not permitted in any circumstances.

No, because the fee sharing agreement with the estate agent was not in writing.

No, because the client did not consent in writing to the fee sharing agreement.

Yes, because the client was informed of the fee sharing agreement.

Answer 28

(C) The SRA Codes of Conduct provide that all fee sharing agreements with a third party must be in writing. Additionally, the client must be informed of any fee sharing arrangement that is relevant to their matter. Because the solicitor’s agreement with the estate agent was verbal, the solicitor’s actions were not in accordance with the SRA Standards and Regulations. (A) is incorrect. It is true that fee sharing agreements are generally permitted (other than with respect to clients who are subject to criminal proceedings, or when related to a referral of a claim following personal injury or death). However, they must be in writing and the client must be informed, and here the writing requirement was not met. (B) is incorrect because fee sharing agreements are generally permitted. (D) is incorrect because the client’s consent in writing is not required. (E) is incorrect. It is true that the client needs to be informed. However, the fee sharing arrangement with the third party must be in writing, and that requirement was not met here.

Question 29

A landowner with registered title over 15 acres of land has obtained planning permission to develop three acres. The landowner has agreed to sell the three acres to a developer. The landowner has instructed their solicitor to deal with the conveyancing. The landowner is keen to ensure that the buyer enters into obligations to comply with the planning permission and to allow the landowner to have a right-of-way across the three acres that they are selling.

What document will the landowner’s solicitor draft to reflect their client’s wishes?

A transfer (TR1).
A conveyance.
An assignment.
A transfer of part (TP1).
An assent.

Answer 29

(D) The landowner’s solicitor should draft a transfer of part (a TP1). The facts provide the landowner’s title includes 15 acres but the landowner is selling three acres. Thus, the landowner is selling only part of their title. A transfer in part does that. The landowner wants the buyer to enter into a covenant and wants to reserve a right-of-way over the land being sold. These can be dealt with in the transfer of part. (A) is incorrect. A transfer (TR1) is used when all of the land in the seller’s title is being sold. (B) is incorrect. A conveyance relates to unregistered land, and whilst it is still technically possible for them to be used, in practice this would never be the case. (C) is incorrect. An assignment is a type of purchase deed used to transfer an unregistered leasehold, which is not the property interest being sold here. (E) is incorrect, as an assent is used by personal representatives to transfer land to a beneficiary.

Question 30

A solicitor is acting for the buyer of a property which has had a large extension added to it by the seller. The extension was completed two years ago, which was built without planning permission.
How long does the local authority have to take enforcement action?

Four years.

One year.

Two years.

Nine years.

There is no time limit.

Answer 30

(C) The local authority has four years from the date of the breach to take enforcement action. The facts tell you that the work was completed two years ago, so the local authority has a further two years to take enforcement action. Thus, the remaining answers are incorrect.

Question 31

A buyer has recently exchanged contracts with the seller of a house using the Contract Incorporating the Standard Conditions of Sale (5th edition – 2018 revision), unamended. However, shortly after exchange, the buyer discovered that the property was a leasehold property. A freehold was indicated in the particulars of sale. The buyer does not want the property if it is a leasehold.

What remedy, if any, is most suitable for this buyer?

Rescission only.

None, because exchange of contracts has already taken place.

Damages only.

Rescission and damages.

Specific performance.

Answer 31

(D) Under the Standard Conditions of Sale, if the property has been misdescribed in the particulars, the buyer may both rescind (that is, undo the contract and put the parties in the positions they were in before exchange) and seek damages arising from the misdescription. (A) and (C) are incorrect as under the Standard Conditions of Sale, as just explained, both rescission (A) and damages (C) are available for misdescription. Therefore, (B) is incorrect as well. (E) would not be a good remedy. Specific performance is an order requiring a party to a contract to perform as promised. Here, the seller cannot deliver a freehold if they have only a leasehold, and the buyer does not want the leasehold

Question 32

You represent a residential house buyer. She is interested in buying a home from a man who is selling his mother’s home under a power of attorney. The man explained that his mother had to move into residential care and that the local authority paid for her care pending the sale of her property on the basis that the local authority will be reimbursed when the sale of the property completes.

How will you determine how much is owed to the local authority?

Through a search of the charges register of title.

Through a search of the local land charges register.

Through a search against the full name of the mother.

Through a search against the full name of the son who holds the power of attorney.

Through a bankruptcy search against the mother’s name.

Answer 32

(B) The local authority is likely to register a financial charge on the local land charges register which will be discoverable by carrying out the local search. (A) is incorrect, the local authority will register a charge on the local land charges register rather than take a charge over the legal title. (C) and (D) are incorrect as the relevant search will be of the local land charges against the property and not against the name of the owner or the son holding a power of attorney for the owner. (E) is incorrect as a bankruptcy search is usually done against the buyer’s name if the buyer is getting a mortgage (to ensure the lender will be happy to lend to the buyer); it is not used to determine whether a seller might owe money to a local authority.

Question 33

The owner of a piece of land instructs their solicitor regarding the sale of the land. The solicitor obtains the unregistered title deeds from the seller and investigates title to establish a good root of title.

Which of the following is NOT one of the requirements of a good root of title?

The document must be at least 15 years old at the date of the contract.

The document must deal with the whole legal and equitable estate.

The document must contain an adequate description of the property.

The document must have a plan annexed to it.

The document must not cast any doubt on the title.

Answer 33

(D) is correct. The remaining answers are the requirements of a good root of title.

Question 34

A solicitor has exchanged contracts for a company client on the purchase of a commercial unit with a registered title. Completion is not due to take place for another three months.

What should the solicitor do to protect their client’s position?

Register a C(iv) land charge.

Carry out an official search with priority and diarise the expiry date.

Register a home rights notice on the seller’s title at Her Majesty’s Land Registry.

Register a C(i) land charge.

Register an estate contract on the seller’s title at Her Majesty’s Land Registry.

Answer 34

(E) To protect the purchaser’s interest, the solicitor should register an estate contract on the seller’s title at the land registry. If completion is to take place more than a couple weeks after completion, the contract should be protected in the registered system by registering the estate contract to put the world on notice of the fact that the contract has been entered into. Here, the facts indicate that completion will not take place for three months and that the title is registered. (A) and (D) are incorrect because the C(iv) and C(i) land charges (to register an estate contract and to register a second or subsequent mortgage, respectively) are used with respect to unregistered land and here the land is registered. (B) is incorrect, as an official search with priority would provide protection (priority) only for a 30 working day period during which the transaction must complete and be registered. Here, as explained above, the purchaser needs their interest protected for three months (when completion is to take place). (C) is incorrect. A home rights notice protects the right of occupation of a non-owning spouse or civil partner.

Question 35

The owner of a commercial business unit is keen to let the premises to a tenant to use as their business. The owner wants to limit the duration of the lease to five years and wants to ensure that they can regain possession of the premises at the end of the five-year term.

Which of the following is required for the landlord to contract out of the security of tenure provisions of the Landlord and Tenant Act 1954 (Part II)?

A health warning by the landlord, a declaration of receipt of the warning by the tenant, and reference to these in the lease.

A health warning by the landlord, a declaration of receipt of the warning by the tenant, and an authorised guarantee agreement in the lease.

A health warning by the landlord, a licence prohibiting assignment by the tenant, and reference to these in the lease.

A statement of intention by the landlord, a declaration of receipt of the statement by the tenant, and reference to these in the lease.

A statement of intention by the landlord, a declaration of receipt of the statement by the tenant, and a prohibition against assignment in the lease.

Answer 35

(A) A landlord may contract out (that is, opt out) of the security of tenure protections given a tenant under the Landlord and Tenant Act 1954 (Part II) only if the three statutory requirements are satisfied. First, at least 14 days before the tenant completes the lease, the landlord must give what is called a ‘health warning’ – a notice to the potential tenant explaining what the security of tenure is, that the potential tenant is giving up these rights, the consequences of giving up these rights, and that the tenant should seek professional advice. Second, the tenant must sign a declaration confirming that they have received the warning and that they agree to contracting out of the Act and the consequences of doing so. And finally, the lease must contain a reference to the health warning, the declaration, and the agreement to contract out. (B) is incorrect because an authorised guarantee agreement (‘AGA’) is not relevant to opting out of the security of tenure. An AGA is an agreement under which a tenant guarantees the performance of a person to whom they assign the lease. (C) is incorrect because ‘a licence prohibiting assignment’ is not one of the required statutory conditions to contract out of the security of tenure. A ‘licence to assign’ is a document which may be required by a commercial landlord to give consent to an existing tenant’s assignment of their lease. (D) and (E) are incorrect because the warning required from the landlord is called a health warning and not a statement of intention. (E) has the additional erroneous provision of a prohibition against assignment, which is not one of the conditions required to contract out of the security of tenure.

Question 36

A building society has agreed to lend a farmer £150,000 to purchase 10 acres of land adjoining his farm, which has an unregistered title. The title to the land being purchased is also unregistered. The building society and the farmer will enter into a first legal charge over the 10 acres of land.
How will the building society’s interest be protected?

The charge will be protected by a deposit of the title deeds with the building society as security for the loan.

The charge will be protected by the registration of a puisne mortgage in favour of the building society.

The purchase will trigger first registration of the 10 acres of both the land the farm, and the charge will be protected by a notice on the charges register.

The purchase will trigger first registration of the 10 acres of land only,
\and the charge will be protected by a notice on the charges register.

The purchase will trigger first registration of the 10 acres of land only, and the charge will be protected by a notice on the property register.

Answer 36

(D) The purchase triggers first registration of the 10 acres of land only, and what the building society will take is a mortgage (that is, the right to repossess and sell land in the event the borrower defaults). Once land is registered, to be protected against other third parties who might gain interests in the property, a notice of the charge must be registered on the charges register of the newly created title. (A) is incorrect, as the purchase is an event which triggers first registration. Therefore, the unregistered title deeds will not be placed with the lender. (B) is incorrect as a puisne mortgage is a second or subsequent legal charge in the unregistered system. The land here will be registered and the mortgage is a first legal charge. (C) is incorrect, as the purchase does not trigger first registration of the farmers existing land. The question makes it clear that no charge will be taken over the existing farm. (E) is incorrect, as the charge appears on the charges register not the property register. The property register indicates whether the title is freehold or leasehold and gives the address of the property and details of any rights which benefit the land.

Question 37

The owner of a small publishing business built an office building about nine years ago. The building had twice as much space as the owner needed at the time, but the owner was hopeful that the business would grow. To help with expenses, the owner leased the ground floor of the building to a shop owner under a 10-year lease. The building owner’s publishing business has expanded as hoped. As these are the only commercial premises the owner owns, she would like to retake the leased premises to use in her business at the end of the lease term 11 months from now.

The landlord and tenant did not contract out of the provisions of the Landlord and Tenant Act 1954 (Part II) when they entered the lease that is about to expire. Additionally, the tenant has always complied with all obligations imposed on the tenant under the lease.

May the landlord terminate the shop owner’s tenancy at the end of the lease term under these circumstances?

Yes, because the contractual term of the lease will have ended.

No, because the landlord cannot offer suitable alternative accommodations to the tenant.

No, because the tenant has always complied with the obligations imposed on the tenant under the lease.

Yes, because the landlord intends to occupy the whole premises.

No, because the facts do not indicate that the landlord intends to demolish or reconstruct the premises.

Answer 37

(D) The landlord may terminate the lease because the landlord intends to occupy the whole premises. Under the Landlord and Tenant Act 1954 (Part II), a tenant can continue to occupy leased commercial premises under the lease after the term of the lease expires unless the landlord serves a section 25 notice on the tenant between six to 12 months before the end of the lease term. The notice must state a statutory ground for termination of the lease. Such grounds include breaches of obligations under the lease by the tenant; the availability of suitable, alternative premises for the tenant; and the landlord’s desire to demolish, reconstruct, or move into the premises. Here, the landlord intends to occupy the premises. Additionally, the facts indicate that there are 11 months left on the lease, so the time for a section 25 notice has not expired. (A) is incorrect because merely reaching the end of the term of a lease is not a ground for terminating a commercial tenancy under the Landlord and Tenant Act 1954. (B), (C), and (E) are incorrect because although each refers to a statutory ground for terminating the tenancy which is not present under the facts, a landlord’s desire to occupy the leased premises also is a statutory ground and that ground is present in the facts.

Question 38

Two solicitors who work in a firm (‘ABC and Co’) have set up a separate estate agency which is not regulated by the Solicitors Regulation Authority or other approved regulator. The solicitors want to name the estate agency ‘ABC Solicitors Estate Agency’.

Do the rules of professional conduct allow the use of this name?

Yes, because the estate agency is owned by solicitors.

Yes, provided the estate agency’s publicity material makes it clear that it is not regulated by the Solicitors Regulation Authority.

No, because the estate agency is not an authorised body.

No, because the estate agency is not providing solicitor-type services.

Yes, provided solicitors are working at the estate agency.

Answer 38

(C) A solicitor must not be an interest holder of a business that has a name which includes the word ‘solicitors’ unless it is an authorised body (meaning, a body that has been recognised by the SRA). (B) is incorrect because the additional publicity will not remedy the first breach (using the word ‘solicitors’ in its name). (D) is incorrect because it is not the best answer. The name is prohibited because the estate agency is not an authorised body. (E) is incorrect because the fact that solicitors work at the estate agency does not mean that it is an authorised body.

Question 39

A settlor transfers funds to trustees to hold on trust for his sister for life with remainder to her two sons in equal shares provided they attain the age of 21. One of the sons dies intestate aged 25. The settlor’s sister and the other son are still alive.

What will happen to the share of the son who has died?

It forms part of the deceased son’s estate and passes on his intestacy.

It passes to the surviving son provided he survives his mother.

It reverts to the settlor on resulting trust.

It passes to the sister.

It passes to the surviving son.

Answer 39

(A) The deceased son’s share forms part of his estate and passes on his intestacy. The trust gives interests in remainder to the two sons contingently upon them attaining the age of 21. There is no condition that they should be living at their mother’s death. This means that the interest of the deceased son was a vested interest in remainder which forms part of his estate on death. As he died intestate, it will pass to his next of kin under the intestacy rules. The remaining answers are all incorrect because once an interest has vested, the beneficiary is entitled to it and the interest will not fail.

Question 40

A settlor transfers his house, Blackacre, to his friend, telling him: “I want you to hold Blackacre on trust for my son and transfer it to him when he is 25”. The settlor dies. In his will he leaves Blackacre to his wife.

If a court finds the trust of Blackacre failed, what is the most likely reason?

Two trustees are required for a trust of land.

The gift is inconsistent with the terms of the will.

There is no signed written evidence of the declaration.

There is no certainty of objects.

The trust is incompletely constituted.

Answer 40

(C) The trust of Blackacre fails because there is no signed written evidence of the declaration. The settlor was attempting to create a trust of land with the friend as trustee. He needed to transfer the land to the trustee, which he has done, and make a valid declaration of trust. Such a declaration must comply with the requirements of certainty, the beneficiary principle, and the perpetuity rules. In addition, in the case of land, the declaration must be evidenced by some writing signed by the settlor. In this case, there is an oral declaration which complies with the requirements of certainty-the wording shows that the settlor intends the friend to be legally bound, the subject matter is Blackacre, and the object is the son. There is a human beneficiary who is already in existence so there are no issues relating to the beneficiary principle or perpetuity rules. However, there is no writing signed by the settlor to evidence the trust, and so it fails and Blackacre passes to the wife under the will. (A) is incorrect because there is no requirement that there must be two trustees for a trust of land, only that two trustees are required to give a valid receipt when land subject to a trust is sold. (B) is incorrect because the will takes effect only on death, and if the trust had been valid, the gift in the will would fail. (D) is incorrect because the son is the object of the trust. (E) is incorrect because constitution of a trust refers to the transfer of the legal title, which the settlor has done.

Question 41

A woman paid £25,000 towards her nephew’s purchase of an apartment costing £100,000. The apartment was conveyed into the nephew’s name alone, and there was no declaration or evidence as to the woman’s intentions. The woman and her nephew are now estranged, and the nephew has sold the flat for £120,000. The woman wishes to claim as much as possible from the sale proceeds.

How much can the woman properly claim?

She may reclaim £25,000 under a presumed resulting trust.

She has no claim because a gift is presumed.

She may claim £30,000 if she can prove that no gift was intended.

She may claim £30,000 under a presumed resulting trust.

She may reclaim £25,000 if she can prove that no gift was intended.

Answer 41

(D) The woman may claim £30,000 under a presumed resulting trust. Where an individual contributes to the purchase of property in the name of another and there is no evidence that a gift was intended, the usual presumption is that the legal owner holds on resulting trust for himself and the other party in proportion to their respective contributions. This presumption does not apply where the contributor was the father or husband of the legal owner, or was acting in loco parentis to the legal owner. In these cases the presumption of advancement applies and it is presumed that the contributor intended to make a gift unless he can prove that he did not. (A) is incorrect because the contributor has a proportionate claim to the sale proceeds, so she may claim one-quarter of £120,000. (B), (C), and (E) are incorrect because the presumption of advancement does not apply here. Therefore the woman does not have to prove that no gift was intended.

Question 42

In his will a testator leaves £20,000 to his friend “to hold on the terms I have communicated to him”. Shortly after executing the will, the testator told his friend that he was to give the money to the testator’s son, and the friend agreed. The testator has now died.
Which of the following best describes the position of the trust?

The trust is valid because the friend has accepted its terms.

The trust fails, and the friend may keep the legacy.

The trust is unenforceable, but the friend may choose to give the money to the testator’s son as agreed.

The trust fails, and the friend holds on resulting trust for the testator’s estate.

The friend holds on constructive trust for the son.

Answer 42

(D) The trust fails, and the friend holds on resulting trust for the testator’s estate. The usual rule is that a trust which is to take effect on death must be declared in a valid will. Where a trust is declared in a will but the beneficiary is not identified, there will be a valid half-secret trust only if the identity of the beneficiary was communicated to the trustee before the will’s execution and the wording of the will is consistent with that communication. Here, the wording of the will does point to a past communication, but the communication was not made to the trustee until after the will was made. Therefore the trust fails. The friend is clearly a trustee, and so he holds on resulting trust for the testator’s estate and the money will pass with the residue of the estate. (A) is incorrect because even though the friend has agreed, the communication was after the date of the will. (B) is incorrect because the friend is a trustee and may not keep the money. (C) is incorrect because the money belongs to the residuary beneficiary and the friend has no power to decide who should take it. (E) is incorrect because a constructive trust is one imposed by the court on grounds of conscience, which does not apply in this case.

Question 43

Two women buy a house, contributing equally to the purchase price. The house is conveyed into the name of one alone to enable her friend to claim state benefits by concealing her assets. The women are now estranged, and the non-legal owner wishes to claim a share in the house. There is no written evidence to support her claim.
What is the likely result of the claim?

It will fail because only the registered owner is entitled.

Whether it will succeed depends on whether the court finds it to be in the public interest.

It will fail because the court will not hear evidence of the claimant’s improper intention.

It will succeed provided that no fraud has been committed.

It will fail because a trust of land requires signed written evidence to enforce it.

Answer 43

B) If a property transfer was made as part of an illegal or fraudulent transaction, the court must decide whether it is in the public interest to allow a claim. The court would take into account all relevant factors, including the underlying purpose of the relevant law and the respective conduct of the parties. In these circumstances, the court would consider the seriousness of the fraud, the conduct of both parties, and the effect of allowing a claim. (A) is incorrect. As indicated above, it will be up to the court to decide, taking into account all relevant factors. It should be noted that although the registered owner is entitled at common law, the claimant may establish an equitable interest under a trust. (C) is incorrect both because the result is uncertain and because, as indicated above, the court will consider all relevant factors, including the claimant’s improper intention. Like (C), (D) is incorrect because the result is uncertain and because the existence of fraud is just one factor to consider. (E) is incorrect because the requirement that a declaration of trust of land must be evidenced in signed writing applies only to express trusts, not to implied trusts.

Question 44

A will contains the following gift: “I give £50,000 to my son in full confidence that he will share what is left at his death among his children”.
Which of the following best describes the position of the son?

He holds the money on trust for his children.

He holds the money on resulting trust for the residue of the estate.

He will not receive the money because the trust fails for lack of certainty.

He is absolutely entitled to the money.

He may enjoy the money in his lifetime but must leave what remains to his children in his will.

Answer 44

(D) The son is absolutely entitled to the money. A declaration of trust must comply with the three certainties: it must demonstrate an intention to impose a binding obligation on the trustee, the subject matter must be certain, and the beneficiaries must be clearly described or named. The gift to the son in the will contains ‘precatory words’-that is, words which express a hope or desire but are not sufficient to show an intention to subject the son to a binding obligation. This means that no trust has been imposed on the son, and he is free to spend the money as he pleases. (A), (B), and (E) are all incorrect as no binding obligation has been imposed. (C) is incorrect because the gift to the son in the will is valid and no trust has been imposed on him.

Question 45

An unmarried couple lived together in a house registered in the name of one party alone. At the time of the purchase, the non-legal owner paid 5% of the purchase price, and the legal owner paid 35%. The remaining amount was raised by a mortgage on the property. After 10 years the parties have separated, and the non-legal owner wants to claim an equitable interest in the property. There is no express declaration of trust.

Is the non-legal owner’s claim likely to succeed?

Yes, because the couple lived together for 10 years.

No, because there is no express declaration of trust in favour of the non-legal owner.

No, because the non-legal owner paid only 5% of the purchase price.

Yes, because the non-legal owner paid towards the purchase price.

No, because the house is registered in the name of one party only.

Answer 45

(D) The non-legal owner’s claim is likely to succeed because they paid towards the purchase price. When a non-legal owner attempts to assert an equitable interest in the family home, the court will impose a constructive trust in favour of the non-legal owner if the non-legal owner can establish that: (1) the parties had a common intention, either express or inferred, that the non-legal owner should have an equitable interest in the property; and (2) the non-legal party relied to their detriment on the common intention. The court may infer a common intention from the parties’ conduct, such as the non-legal owner making a direct contribution to the purchase price or making mortgage payments. Here, the non-legal owner contributed to the purchase price of the house, which is likely sufficient to show that there was an inferred common intention that the non-legal owner should have an interest in the house. In addition, the non-legal owner can show that they relied to their detriment on the common intention by paying some of the purchase price. (A) is incorrect because there is no requirement that the parties must live together for a certain amount of time before one can claim an interest in the property. (B) is incorrect because the court can impose a constructive trust in favour of the non-legal owner when there is no express declaration of trust. (C) is incorrect because there is no minimum amount that the non-legal owner must contribute in order to claim an interest. (E) is incorrect because a non-legal owner can claim an interest in property through an express declaration of trust or by asking the court to impose a common intention constructive trust.

Question 46

An unmarried couple lived together in a house registered in the name of one party alone. At the time of the purchase, the non-legal owner paid 5% of the purchase price, and the legal owner paid 35%. The remaining amount was raised by a mortgage on the property. After 10 years the parties have separated, and the non-legal owner wants to claim an equitable interest in the property. There is no express declaration of trust.

Is the non-legal owner’s claim likely to succeed?

Yes, because the couple lived together for 10 years.

No, because there is no express declaration of trust in favour of the non-legal owner.

No, because the non-legal owner paid only 5% of the purchase price.

Yes, because the non-legal owner paid towards the purchase price.

No, because the house is registered in the name of one party only.

Answer 46

(D) The non-legal owner’s claim is likely to succeed because they paid towards the purchase price. When a non-legal owner attempts to assert an equitable interest in the family home, the court will impose a constructive trust in favour of the non-legal owner if the non-legal owner can establish that: (1) the parties had a common intention, either express or inferred, that the non-legal owner should have an equitable interest in the property; and (2) the non-legal party relied to their detriment on the common intention. The court may infer a common intention from the parties’ conduct, such as the non-legal owner making a direct contribution to the purchase price or making mortgage payments. Here, the non-legal owner contributed to the purchase price of the house, which is likely sufficient to show that there was an inferred common intention that the non-legal owner should have an interest in the house. In addition, the non-legal owner can show that they relied to their detriment on the common intention by paying some of the purchase price. (A) is incorrect because there is no requirement that the parties must live together for a certain amount of time before one can claim an interest in the property. (B) is incorrect because the court can impose a constructive trust in favour of the non-legal owner when there is no express declaration of trust. (C) is incorrect because there is no minimum amount that the non-legal owner must contribute in order to claim an interest. (E) is incorrect because a non-legal owner can claim an interest in property through an express declaration of trust or by asking the court to impose a common intention constructive trust.

Question 47

A settlor transfers property to two trustees to hold on trust for his grandchildren. The trust deed contains no express powers dealing with the appointment of trustees. One of the trustees wishes to retire.

Which of the following best describes the trustee’s power to retire?

The trustee may retire by written notice and need not be replaced.

The trustee may retire provided a replacement is appointed by the settlor.

The trustee may retire but he and the continuing trustee must appoint a replacement.

The trustee may retire provided his co-trustee consents by deed.

The trustee may retire provided the settlor consents in writing.

Answer 47

C) The trustee may retire, but he and the continuing trustee must appoint a replacement. In the absence of express provisions in the trust instrument, statutory rules on the appointment and retirement of trustees apply. A trustee may retire without replacement only if he leaves in office two trustees or a trust corporation, and his co-trustees consent by deed. A trustee may be replaced where he desires to be discharged provided that a replacement trustee is appointed and the appointment is made in writing. The appointment must be made by the retiring and continuing trustees. (A) and (D) are incorrect because there are only two trustees, so the power to retire without replacement does not apply. (B) and (E) are incorrect because the settlor retains no further power to appoint trustees once the trust has taken effect unless the trust instrument makes express provision, and the facts state that there are no express powers dealing with the appointment of trustees.

Question 48

A testator died 20 years ago leaving all his estate to trustees on trust for his widow for life with remainder to his son. The estate consisted of a range of shares in public companies. The will contained no special administrative provisions. On the death of his mother, the son finds that the trustees took no investment advice but followed his mother’s suggestion that they should retain all the original investments. The investments have reduced in value.

Which of the following best describes the position of the trustees?

They are not in breach of trust because they retained the original investments transferred to them.

They are in breach of trust and must make good the loss to the trust fund.

They are in breach of trust but will not be liable because the limitation period has expired.

They are not in breach of trust because the beneficiary requested them to retain the investments.

They are in breach of trust but will be liable only if the loss was caused by the breach.

Answer 48

(E) The trustees are in breach of trust but will be liable only if the loss was caused by the breach. Trustees are under a duty to invest the trust funds and to keep investments under review. In choosing investments they must take into account the standard investment criteria which means they must consider the suitability of their investments and their diversification. They must take proper advice in choosing investments except where it is unnecessary or inappropriate in all the circumstances. The trustees in this case are in breach of trust, having apparently failed to take account of the standard investment criteria or to take advice. However, where a breach has occurred, trustees are only liable to make good the loss caused by the breach. The son must show that no reasonable trustee, acting with proper advice and taking into account the standard investment criteria, would have made the loss shown by these investments. (A) is incorrect because the duty to invest and review investments applies to the original investments in the trust. (B) is incorrect because it must be shown that the loss was caused by the breach. (C) is incorrect because the breach was ongoing throughout the existence of the trust. (Note also that time does not run against a beneficiary until his interest falls into possession, so the son has six years to bring a claim.) (D) is incorrect because, although the consent of a beneficiary is a defence to a breach of trust, in this case the son did not consent.

Question 49

A trustee places £10,000 of trust money into her own bank account, which has an existing balance of £1,000. She draws out £2,000 from the account to pay her rent and spends a further £1,000 on a painting. The breach has been discovered, and the trustee’s creditors are bringing bankruptcy proceedings against her. The painting is now worth £5,000, and the balance of £8,000 remains in the trustee’s bank account.

Which assets can be claimed for the trust in a proprietary claim?

The painting only.

The painting and £5,000 from the bank account.

£8,000 from the bank account only.

£8,000 from the bank account and a charge against the painting for £1,000.

The painting and £8,000 from the bank account.

Answer 49

(E) The painting and £8,000 from the bank account can be claimed for the trust in a proprietary claim. Where a trustee mixes trust funds with her own in a bank account, the trust may claim a charge over the account for the amount of trust money in it. When funds are withdrawn from the account, the trustee is treated as spending her own money first. Following this rule, the rent payment consisted of the trustee’s £1,000 plus £1,000 of trust money. The painting was purchased with trust funds alone. Where a trustee purchases an asset with trust funds, the trust may claim the asset as representing trust property, or a charge over the asset for the trust funds it represents. In this case, the trust will choose to claim the painting as representing their lost £1,000, and will benefit from the rise in value of the painting. In addition, the trust can claim a charge over the bank account for the remaining £9,000 taken from the trust, and so will claim the whole balance of £8,000 left in the account. (The trust still has a personal claim against the trustee for the £1,000 of trust money spent on the trustee’s rent but will rank alongside the trustee’s other creditors in this claim.) (A) is incorrect because the trust may make a proprietary claim to the funds in the bank account. (B) is incorrect because the trust may claim the painting as representing only £1,000 of trust money. (C) is incorrect because the trust may claim the painting in addition to the money in the bank account. (D) is incorrect because the trust has the option of adopting the painting as representing £1,000 of trust money and so will claim the increase in value.

Question 50

In 2013, a settlor transferred funds to trustees on trust for her son for life with remainder to her two grandsons in equal shares provided they attain the age of 25. The trust instrument contains no express powers. The elder grandson is now 21 and has asked the trustees to give him some of the capital to help set up a business. The younger grandson is 18.

Whose consent must the trustees obtain if they wish to comply with the elder grandson’s request?

No one’s, as the trustees have an absolute discretion.

Consent of the son only.

Consent of the settlor only.

Consent of the younger grandson only.

Consent of the son and the younger grandson.

Answer 50

(B) The trustees need to obtain the son’s consent if they wish to comply with the elder grandson’s request. Where a beneficiary has an interest in the capital of a fund, the trustees have power to advance capital for the beneficiary’s advancement or benefit. The trustees must obtain the consent of any beneficiary with a prior interest in the income of the fund. Here, the two grandsons each have a contingent interest in half the capital of the fund. The settlor’s son is entitled to the income of the fund, so he has a prior interest in the income of the shares of both grandsons. (A) is incorrect because the trustees must obtain the son’s consent; if capital is advanced to the grandson, the income the son receives will be reduced. (C) is incorrect because the settlor retains no control over the actions of the trustees once the trust has been created. (D) and (E) are incorrect because the younger grandson does not have a prior interest in the income of his brother’s share of capital.