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OSCE > More Property > Flashcards

More Property Flashcards

1
Q

When can you act for lender

A
  1. best interests
  2. standard mortgage
  3. certificate of title in SRA / Council mortgage lenders form
  4. residential mortgage
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2
Q

Client care - property

A

Ask for proof of ID

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3
Q

Instructions

A

Full names, addresses parties, sellers agents, solicitors
Describe property, tenure, characteristics,
Price
Deposit
Chattells
Survey?
Mortgage offer - needed to exchange contracts
Related sale
Anticipated completion date

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4
Q

Property IV

A

Explain joint ownership issues
Ensure sufficient funds inc. stamp duty, costs
Ask for mortgage offer
Proposed use - planning permission issues
Restrictive covenants
Issues: negotiate with seller dates/amounts/mortgage lender
Surveys (full structural survey)
Will investigate title
Full details of costs will be sent in writing
Summary of advice will be sent in writing too, with client care letter
Contact sellers solicitors
Start pre-contract searches
Buyer beware
Types of survey - valuation, homebuyer, full structural - who pays (mortgage lender)

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5
Q

Property IV - how to treat mortgage offer

A

Ensure client understands offer and comply - summarise main terms - insurance (prior to completion: replacement value
If survey shows issues, mortgage lender may make retention until works carried out
Don’t exchange contracts until mortgage offer in place and accepted
How mortgages calculated - possible indemnity insurance
10% deposit normally needed on exchange of contracts
Must have funds in place before anything can happen
Ask for copy of the mortgage offer
Working from home - business use - write and ask for permission - disclose

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6
Q

Joint ownership

A

Presumption of tenants in common if purchasing in unequal shares
Make a will

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7
Q

Planning permission

A 
Development-such need permission
Town and Country Planning Act 1990
Material change of use
Interior alterations
GPDO
Restrictive covenants - indemnity insurance/release/variation
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8
Q

If client is renting

A

Check when can move out

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9
Q

Client care

A
  1. costs
  2. disbursements
  3. complaints
  4. Mortgage offers - Cannot advise which to get into, should refer to a person authorised by the FCA to do s - financial/mortgage advisor
  5. Can give general advice as to types of mortgage
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10
Q

Shortfall of funds/retention

A

Re-negotiate - but might result in reduced mortgage
Ask seller to do works
Get estimates
Negotiation with lender - release all funds with undertaking to carry out works by specified date
Bridging loan - not normally for works (better for deposit where loan discharged by proceeds of sale)
Must advice NOT to enter into binding contract for sale and purchase unless all in place

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11
Q

IV Checklist

A 
Sellers name and address and solicitors
Buyers name address and solicitors
ID - money laundering purposes
Property address
Purchase price
Deposit
Related sale
Contents of property - value
Property occupied
Completion
VAT - commercial property - when lease
Survey
Insurance
Intended use - planning permission? Changes
How will pay for it - advice types of mortgage
Other costs
Client care/checklist/importance being able to have finances in place
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12
Q

Types of mortgage

A
  1. Interest only - pay interest over term, then have to repay eg. sale of property. Cheaper monthly payments
  2. Repayment - repay over end of term, pay interest and part of capital
  3. Endowment - interest only, and capital is repaid by endowment policy (pot is invested to equal amount of mortgage by end of term / life insurance term)
  4. Pension - interest only, and capital repaid from retirement lump sum at end of term
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13
Q

How to deal with AML

A

Firms Money Laundering Reporting Officer nominated - overrides confidentiality
Ask for proof once proper concerns raised
Suspicions if doesn’t bring in ML docs, brings in deposit and pulls out, comes in cash
Cannot manipulate Stamp Duty - seller can reduce price, but cannot inflate the price of contents

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14
Q

Costs in purchase

A
  1. property
  2. mortgage
  3. searches
  4. survey
  5. legal fees
  6. stamp duty land tax
  7. Land registry fees
  8. mortgage arrangement fee
  9. insurance on property
  • important to have enough to complete
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15
Q

Exchange of contracts - means

A

Equitable interest in land - therefore must insure (partial ownership)

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16
Q

What steps must be taken prior to exchange of contract

A
  1. Report to client - results of title investigation, searches, enquiries of seler, and terms of contract and mortgage offer
  2. report to lender - good marketable title
  3. has client sufficient funds to complete (accepted mortgage offer, and complied with conditions/be in position to do so)
  4. Indemnity insurance is in place following exchange
  5. Agree completion date
  6. Express authority ideally written to exchange
17
Q

What is the usual method to exchange contracts

A

Telephone

Take detailed noted

18
Q

Law Soc formula

A

A - if seller has both copies and deposit
B if both sols hold their own signed
C for a chain

19
Q

Telephone call to exchange

A
  1. Introduce
  2. Name of other side
  3. Confirm property to exchange on AND agreed completion date
  4. Confirm who is holding which docs and Lawsoc formula
20
Q

Law Soc B - both sols hold own signed

A
  1. Confirms inserting completion date in own copy
  2. Either says ‘now exchanging Law Soc B, time/date
  3. Confirm insertion of agreement date
  4. Confirm holding client’s part of contract to other’s order
  5. Both undertaking to buyer to send his client’s part
  6. Buyer gives undertaking to send deposit
    * agree variation to send deposit by direct credit
21
Q

Law Soc A - Seller has both copies and deposit

A
  1. Seller confirms both contracts and is inserting agreed completion date
  2. Seller confirms exchanging under A, time date
  3. Seller inserts today’s agreement date
  4. Seller confirms holding their client’s part of contract to buyer’s solicitors order (ie belongs to other side)
  5. Seller undertaking to send their part to buyer
22
Q

What is inserted into contracts for exchange

A

Agreed completion date and date of agreement

23
Q

Failure to follow undertakings

A

Breach SRA

Liability

24
Q

2 legal stages for purchase land

A
  1. Contract (drafted by seller) - must be in writing, complete contract, signed/on behalf
  2. Transfer (Purchase Deed) - Completion - must be deed: writing, signed, witnessed, delivered and intention to be a deed
25
Q

What steps are taken on behalf of the lender?

A

Pre-exchange

  1. investigate title and report
  2. check client aware of mortgage terms

Pre-completion

  1. Report of title to lender, completion date and request for mortgage advance w/ undertaking that have carried out
  2. Prepare mortgage deed
  3. Bankruptcy search against client
  4. Official search of title in name of lender

Completion/Post-completion

  1. Ensure mortgage advance is received and used just for property on purchase day
  2. Register mortgage so that loan secured against property
  3. Send docs to lender for safekeeping
26
Q

How to deal with including furniture in property sale

A
  1. Stamp duty doesn’t apply
  2. Avoidance - might be questioned
  3. Could affect mortgage
27
Q

Representing mortgage lender and buyer

A

Yes - council for mortgage lenders standard T&C and Law Soc report for title

28
Q

Property - 2 parties eg husband and wife

A

Make sure instructions from both - consider separate representation, LoA

29
Q

Commercial rent outstanding

A

Cannot go for forfeiture if less than 6 months + notice unless otherwise in lease

OSCE (11 decks)

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