OUP MCQs Flashcards
A solicitor has been instructed by the buyer of a parcel of land. At their initial meeting, the solicitor mentions to the buyer that they will be utilising the services of the National Land Information Service (NLIS). The buyer has not heard of the NLIS before and asks for further details.
Which one of the following best describes the explanation the solicitor should give to the buyer as to the role of the NLIS?
It provides a single point of enquiry for making pre-contract searches.
This is because the NLIS brings together most of the different agencies involved in the conveyancing process, thereby enabling pre-contract searches to be undertaken via a single NLIS licensed channel rather than contacting each agency independently.
A solicitor is acting for the buyer of a house which has a registered title. The house was first registered in 2004 following a sale. The house was the subject of a further sale which was registered in 2012. The house is built on land which is near the church within a Church of England parish. There is no entry in the register as to chancel repair liability.
Which one of the following statements best describes whether the buyer’s solicitor would need to carry out a chancel repair liability search?
A chancel repair liability search should be carried out because there has been no registered transfer on sale after 12 October 2013.
This is because although there is no entry in the register and chancel repair liability no longer takes effect as an overriding interest after that date, the property remains subject to any existing liability until the next transfer on sale is registered. There is therefore a risk, at this stage of the transaction, that an application could still be made for registration of the burden of any such liability in the register and the buyer would then be bound by it if they proceed with their purchase.
A solicitor is acting for a client in the purchase of a house for £250,000 and has just received the local land charges official search certificate from the local authority. The client asks the solicitor about the extent to which the accuracy of the official search certificate can be relied upon.
Which one of the following statements best describes the position in relation to such a search certificate?
The official search certificate is guaranteed by the local authority as at the date of the local search result.
This is because the Local Land Charges Act 1975 provides that where an official search certificate is inaccurate, the local authority may be liable to pay compensation to the buyer.
The buyer of a property intends to build a large extension at the rear, once they have completed their purchase. When they meet with their solicitor to go through the purchase documentation prior to signing the contract, the solicitor advises that there is a particular matter revealed by the local search which will need further investigation as regards the proposed extension.
Which one of the following statements best describes that particular matter?
A tree preservation order relates to a tree at the property.
This is because a copy of the tree preservation order (TPO) would need to be obtained, to ascertain the position of the tree in relation to the proposed extension. A TPO will protect the tree from being cut down or lopped without the permission of the local authority and this will need to be taken into account if the tree impinges upon the proposed extension.
A mortgage lender is intending to take repossession proceedings in respect of a property over which it has a registered charge, so that it can then sell the property. The house has a registered title and there is a sole registered proprietor. As an initial step, the lender carries out an application to HM Land Registry using Form HR3.
Which one of the following statements best describes the purpose of such an application?
To search the register as to whether any home rights notice has been registered or applied for.
This is because s56 of the Family Law Act 1996 requires a lender to serve notice of the repossession proceedings upon any person who has registered a home rights notice in the title. A search using Form HR3 enables the lender to check whether any such notice has been registered or is the subject of a pending application. The search result confers a priority period of 15 days
A buyer’s solicitor is reviewing a title and raising pre-contract enquiries for a residential property purchase. They notice a discrepancy between the property description in the title and the physical boundary.
How should the solicitor proceed?
Raise enquiries with the seller’s solicitor regarding the discrepancy.
The first thing to do is to raise enquiries and gather as much information regarding the discrepancy. This is in order to see if it can be addressed, as any boundary issue which could lead to a dispute should be avoided.
A solicitor is acting for a purchase of a large freehold property in Cheshire. The property was built at least 100 years ago and is set on 3 acres of land. The seller purchased the home 2 years ago. The solicitor has undertaken a Local Search, Water and Drainage Seach, and Environmental search.
What additional search should the solicitor undertake?
Brine Extraction Search.
If the property is located in Cheshire or Greater Manchester, a search should be sent to Groundsure requesting a Cheshire Salt Search report. This report will reveal any brine-extraction works in the locality and the presence or absence of old workings that could cause subsidence. Salt has been extracted in Cheshire since Roman times and still is today, and therefore when purchasing a property in this area this search should be undertaken.
A recently married couple are buying a new house together in their joint names. One of them has no children; the other has children from a previous marriage, to whom she would like her interest in the property to pass after her lifetime. The couple are contributing unequal amounts towards the purchase price and want their respective interests in the property to reflect those contributions.
What would be the most appropriate way for the couple to hold the legal and beneficial ownership of the property in these circumstances?
They should hold the legal estate as joint tenants but should hold the beneficial interest as tenants in common in specified shares.
The legal estate cannot be severed and held as legal tenants in common; it can only be held on a legal joint tenancy.
A solicitor is acting for the buyer of a freehold house which has a registered title. The buyer is currently living in rented accommodation and has no property to sell. They are funding the purchase partly with a mortgage loan. The seller has an existing mortgage on the house.
Which of the following statements correctly describes the normal sequence of the key steps which will be taken by the buyer’s solicitor?
Approve draft contract; receive mortgage offer; exchange contracts; prepare draft transfer.
The buyer’s solicitor will only undertake the pre-completion searches after exchange of contracts and will only pay the stamp duty land tax once the balance of the purchase price has been sent to the seller’s conveyancer and completion has taken place.
The owner of a large Grade II listed property has just sold part of his garden to a developer, who intends to build several new houses on the land. The land comprises an area of 1 hectare (10,000 square metres). The owner has owned and lived in the property as his home for over ten years. He has already used his full capital gains tax (CGT) annual allowance on the sale of other assets. He wishes to know whether the principal private residence exemption will apply to his capital gain arising from the sale.
Which of the following statements best describes the position regarding CGT on any gain made by the owner on the sale?
One half of the gain will be exempt because it relates to the area of land within the statutory limit of 0.5 hectare; the remainder will not be exempt.
A property investor owns a portfolio of properties and is selling a house which he bought as a buy-to-let nine months ago. The house has been let throughout his period of ownership. He is concerned as to whether, for capital gains tax (CGT) purposes, the principal private residence exemption will apply to the gain he will make on the sale.
Which one of the following statements best describes the position regarding CGT on the sale?
There will be CGT payable because the exemption does not apply to a buy-to-let property which has not been used by the seller as their residence.
The exemption only applies to a property which has been the only or main residence of the seller, not a third party. Residential use by the tenant(s) is not therefore sufficient to fulfil this requirement.
A firm of solicitors has just been instructed to act in a commercial property transaction. The firm has not previously acted for the client. A trainee conveyancer is assisting in the matter and as part of their development they ask their supervising partner about the position regarding complaints under the SRA Standards and Regulations (SRASR).
Which one of the following statements best describes a requirement regarding the firm’s complaints procedure?
It must be brought to the attention of the client at the time of engagement.
The provisions of the SRASR do not provide for such costs to be charged, even in circumstances where a complaint was not upheld or even justified.
The owner of a commercial property has just completed their sale of a buy to let property. The terms of the sale were originally agreed in February and contracts were exchanged in March. Completion took place in May and the transfer to the buyer was registered at HM Land Registry in June. The seller asks their solicitor to confirm the date of the disposal for capital gains tax (CGT) purposes.
Which one of the following statements best describes the deemed date of disposal for CGT purposes?
The date of exchange of contracts.
The buyer of a house has attended an initial meeting with his solicitor to confirm his instructions. At the meeting, the solicitor explains that his firm will be adopting the Law Society Conveyancing Protocol (LSCP) in relation to the transaction.
Which one of the following statements in relation to the LSCP is correct?
Its adoption does not mean compliance takes precedence over the obligation to act in the client’s best interests.
Although adoption of the LSCP is intended to promote efficiency and consistency in conveyancing transactions, it is not itself a quality accreditation scheme—that function is fulfilled by the Conveyancing Quality Scheme.
The executors of the deceased owner of a house are selling the property. The property is in a rural area and was originally purchased by the deceased owner in the 1970s. The executors are currently unable to locate any title documents for the property.
What would be the purpose of carrying out an official search of the index map in respect of the property?
To identify whether the whole or any part of the property has a registered title.
A house-building company is purchasing land for development from an engineering company which has owned the land for many years. The land has a registered title. A local authority search in Form CON29 has already been carried out.
Which one of the following additional pre-contract searches would be required in consequence of these specific circumstances?
Environmental search.
This is because this search would cover environmental matters, which will be particularly important as the seller has clearly been using the land for industrial purposes and so there is a high risk of contamination.
The owner of a freehold house, which she bought around seven years ago, now wishes to sell the property. It is a Grade II listed property. The owner is unsure as to the rules regarding an Energy Performance Certificate (EPC) for the property.
Which one of the following statements relating to an EPC is correct?
It contains recommendations about how to reduce energy use.
This is because an EPC does not just contain information about a property’s current energy performance and costs—it also includes recommendations about how to reduce energy use in the future.
This rating is a key element of the information contained in an EPC, the rating is from A to G not 1 to 7.
A solicitor is acting for the buyer of a commercial unit and is just about to undertake a local search in respect of the property. The title to the property is registered. The buyer asks their solicitor to explain what a local search involves.
Which one of the following describes the two main parts of a local search?
Local land charges search and standard enquiries of the local authority.
This is because a search of the planning register forms part of a larger search: it is not a main part of a local search in its own right. Also, although in some areas of England it is possible to carry out one part of a local search via the Land Registry, this does not involve enquiries directed at the Land Registry.
A local property firm regularly receives referrals from a firm of surveyors in the same area. One of the partners at the firm of surveyors wishes to put a formal fee-sharing arrangement in place with the firm regarding any clients they refer to the law firm to carry out their residential conveyancing.
What must the law firm do in these circumstances to ensure they are not in breach of the SRA Code of Conduct for Solicitors (CCS)?
Ensure that the clients are informed of the fee-sharing arrangement in writing.
This will ensure that the solicitor is acting in the best interest of the client and is also acting in accordance with paras 5 and 8 of the CCS. The client must be informed of any fee-sharing arrangement in place and this must be in writing (para 5.1(a)—(c)), and a client must be provided with information that they can understand and that they are in a position to make informed decisions (para 8.7).
A businessman is buying a freehold commercial unit in London, which has an unregistered title. The land on which the unit is built was previously owned by a company until 1980. The land has previously been used for a variety of different purposes, including a petrol station. The unit is currently owned by a local authority, which bought it in 1980.
Which one of the following statements best describes a group of pre-contract searches which will need to be undertaken for this property?
Environmental search, local authority search, index map search.
This is because in addition to the usual local authority search, an environmental search will be necessary given the previous use of the land as a petrol station. An index map search will be relevant, given that the property has an unregistered title.
A solicitor is acting for the buyer of a house from a married couple. The buyer is obtaining a mortgage from a building society. The completion date has been agreed and the parties are in a position to exchange contracts. The buyer’s solicitor advises the buyer that a physical inspection of the house prior to exchange would be advisable.
Which one of the following statements in relation to such an inspection is correct?
It enables a check to be made as to who is in actual occupation of the property.
This is because the rights of occupiers could potentially take effect as an overriding interest as against the buyer. It is therefore important to check who is in actual occupation and whether any such rights exist, so that the matter can be dealt with on or before exchange of contracts.
A solicitor is acting for a company which is buying a development site. The site was previously used for industrial purposes prior to its purchase as vacant land by the seller. The solicitor has carried out an environmental search which reveals the site is affected by contamination. The company asks its solicitor whether further investigation as to its potential liability for remediation costs is necessary before it commits to buying the site.
Which one of the following statements best describes whether such further investigation is necessary?
Further investigation as to potential liability for remediation costs is necessary because the buyer will potentially be liable if it becomes the new owner.
This is because the buyer will have a potential liability once it becomes the new owner. The liability is imposed by the Environmental Protection Act 1990 and the regulations issued under it. The liability is not automatic, as the original polluter (as a ‘Class A’ person) has primary liability. However, the liability may potentially fall on others—for example, where the original polluter cannot be found. As the new owner, the company may therefore find itself designated a ‘Class B’ person and therefore liable.
A building company is buying a parcel of land for residential development. Its solicitor has carried out pre-contract searches, which reveal that part of the land is registered under the Commons Registration Act 1965.
Which one of the following statements best describes why further enquiries will need to be made regarding this registration?
To ascertain whether the commons registration relates to the land being registered as a town or village green.
A buyer’s solicitor is reviewing a title and raising pre-contract enquiries for a residential property purchase. They notice a discrepancy between the property description in the title and the physical boundary.
How should the solicitor proceed?
Raise enquiries with the seller’s solicitor regarding the discrepancy.
The first thing to do is to raise enquiries and gather as much information regarding the discrepancy. This is in order to see if it can be addressed, as any boundary issue which could lead to a dispute should be avoided.
A solicitor is acting for a purchase of a large freehold property in Cheshire. The property was built at least 100 years ago and is set on 3 acres of land. The seller purchased the home 2 years ago. The solicitor has undertaken a Local Search, Water and Drainage Seach, and Environmental search.
What additional search should the solicitor undertake?
Brine Extraction Search
If the property is located in Cheshire or Greater Manchester, a search should be sent to Groundsure requesting a Cheshire Salt Search report. This report will reveal any brine-extraction works in the locality and the presence or absence of old workings that could cause subsidence. Salt has been extracted in Cheshire since Roman times and still is today, and therefore when purchasing a property in this area this search should be undertaken.
A solicitor is acting for the purchase of a leasehold property sold by an individual in South London. The property is a maisonette. The title confirms the property has a garden which is split between the two flats. The client was not aware a garden was included. The solicitor has submitted a Local, Environmental, Water and Drainage and Chancel Search.
What additional search should be undertaken?
Physical Inspection.
It is always appropriate to advise the buyer to inspect the subject property prior to exchange. They need to check the boundaries of the property. As they were unaware of the garden being included in the title, they need to check the boundaries of the garden for any issues and ensure the boundaries are as shown on the title plan.
A solicitor is acting for a purchaser of a freehold property. In the Property Information Form (TA6) the seller confirmed they did not know if there were any public sewers within the boundary of the property.
What can the solicitor do to find this information out?
Carry out a Water and Drainage search using Form CON29 (DW).
