PLP Flashcards
In which of the following situations can you accept instructions from the person identified?
From a woman on behalf of her and her civil partner. You met them both initially in which they confirmed that you can accept instructions from either of them on behalf of the other.
From a woman on behalf of her brother in the sale of his flat as he is travelling overseas.
From a man on behalf of his elderly mother in selling her home to pay for care fees. His mother has lost mental capacity and so is unable to instruct you.
A majority shareholder instructing you to sell the company’s headquarters.
A branch manager of a shop on behalf of a nationwide retail company in buying premises neighbouring the branch.
From a woman on behalf of her and her civil partner. You met them both initially in which they confirmed that you can accept instructions from either of them on behalf of the other.
Correct. As they have given you authority, you can rely on that
You are acting for a landlord that is granting a lease to a company. You have drafted the lease and sent a copy of the lease directly to the company as it had not yet instructed solicitors. One of the directors of the company calls you and asks you to act for the company as well as the landlord to save costs. The director says that the rent is agreed.
Which one of the following statements is correct?
As this transaction falls within CCS 6.1 you personally would not be able to act for both the landlord and the tenant
If you, personally, were to act for both the landlord and the company, there is a risk you would breach CCS 6.2
GCL and NWL are competing for the same objective as they both have the same objective of wanting the lease to be granted so you, personally, could act for them both by relying on CCS 6.2(b) so long as you could show you had satisfied all the elements of CCS 6.2 (i) to (iii).
The landlord and the company have a substantially common interest as all the key terms in the lease have been agreed so you, personally would be able to act for both of them by relying on CCS 6.2(a) so long as you could show you had satisfied all the elements of CCS 6.2 (i) to (iii).
If you, personally, were to act for both the landlord and the company, there is a risk you would breach CCS 6.2
If you, personally, were to act for both the landlord and the company, there is a risk you would breach CCS 6.2
You are acting for a couple purchasing a house. You are also acting for their lender, a high street bank. The couple do not want you to tell the lender that they intend to let out the property as they know the lender would then insist that the mortgage interest rate would increase from the mortgage rate they have been offered on the basis of the house being lived in by the couple as their main residence. What is the professional conduct issue here?
You advise the clients to proceed as it is unlikely that the lender will ever discover that the property is let.
You have a duty to immediately report to the relevant authority that the clients are committing mortgage fraud.
Your duty of confidentiality to the couple overrides your duty to disclose. You must inform the lender that you cannot now act for professional reasons.
You have a duty to report the couple’s plans to the lender.
Your duty of confidentiality to the couple overrides your duty to disclose. You must inform the lender that you cannot now act for professional reasons.
As a solicitor, which of the following would NOT be a breach of client confidentiality?
Notifying your client’s lender (who is also your client) that the price of the property your client is buying is lower than the lender was told.
Updating your parents on the work you are doing for your sibling.
Sending details of your client’s financial circumstances to solicitors acting for the client’s buyer.
Advertising on your website that you act for a famous client without disclosing the precise nature of your instructions.
Sending details of your client’s property to solicitors acting for the client’s buyer.
Sending details of your client’s property to solicitors acting for the client’s buyer.
Correct. You are likely to have either express (in your client care letter) or implied consent to provide this information which is necessary to progress the sale.
Which of the following statements best describes why the parties to a property transaction will often appoint a solicitor?
To identify any potential issues and offer practical solutions
There will be rights, obligations and restrictions on the property that will need advising on.
To ensure there are sufficient funds to finance the transaction.
To investigate the physical condition of the land and any buildings on it
There will be rights, obligations and restrictions on the property that will need advising on.
Correct. In addition, property is a very valuable asset and a property transaction involves a lot of documentation.
Which of the following correctly describes the buyer’s aims in a property transaction?
Identify the rights that the property enjoys.
Effect a legal transfer of the property to the buyer
Ensure that the buyer has the right to buy the property.
Realise funds from the sale transaction and repay any mortgage on the property.
Identify the rights that the property enjoys.
Correct. The buyer will wish to identify the different rights that benefit and burden the property.
Which of the following correctly describes the seller’s aims in a property transaction?
Ensure the property transaction is tied in with any related transaction and meets their business requirements.
Identify any third party rights affecting the property
Ensure the seller has the right to sell the property
Identify any third party rights affecting the property
Ensure there are sufficient funds to finance the purchase
Ensure the property transaction is tied in with any related transaction and meets their business requirements.
Correct. This is one of the seller’s aims in a property transaction.
In which of the following stages in a conveyancing transaction does most of the work take place?
Pre-completion to completion
Post-completion
Pre-contract to exchange
Pre-contract to exchange
Correct. The most work is pre-contract when the buyer is trying to find out as much as possible about the property before becoming contractually bound
At what point in a property transaction do the parties become contractually committed to the deal?
When Heads of Terms are agreed
Exchange of contracts
Completion
Registration of the transfer deed at the Land Registry
When the TR1 is executed
Exchange of contracts
correct
At what stage in a property transaction is the buyer recognised as the new legal owner?
Exchange of contracts
When Heads of Terms are agreed
Completion
Registration of the buyer at the Land Registry
When the TR1 is executed
At what stage in a property transaction is the buyer recognised as the new legal owner?
Exchange of contracts
When Heads of Terms are agreed
Completion
Registration of the buyer at the Land Registry
When the TR1 is executed
Registration of the buyer at the Land Registry
Correct. Legal title to the property will not pass until the transfer deed is registered at the Land Registry
At which stage in the property transaction is SDLT paid?
Pre-completion to completion
Pre-contract to exchange
Post completion
Post completion
Correct. SDLT is a government tax a purchaser may have to pay depending on the price of the property. If SDLT is payable, this will be paid by the buyer post-completion.
At which stage in a property transaction does the buyer’s solicitor request mortgage funds from the buyer’s mortgage lender?
Post completion
Pre-completion to completion
Pre-contract to exchange
Pre-completion to completion
Correct. Prior to completion the buyer’s solicitor will request mortgage funds from the lender so that it has the balance of the purchase price (less the deposit paid at exchange) in its account prior to completion taking place, the point at which the balance is transferred to the seller’s solicitor.
To which party is the principle of caveat emptor most relevant?
The seller
The buyer
It is equally relevant to both parties
The buyer
Correct. The principle means that a buyer takes the property as it finds it. It cannot turn around after exchange of contracts to the seller and try pull out of the deal because there is something wrong with the property. The principle is therefore most relevant for the buyer.
Which of the following options is not a source of information about the property for the buyer?
Pre-contract search results
The draft contract
Official copies from the Land Registry
Physical survey
Replies to standard pre-contract enquiries
The draft contract
Correct. Information about the property will not come from the draft contract. The contract will document the terms agreed between the parties.
Which of the following options best describes the principle from the case of Hardy v Griffiths?
A seller does not have to disclose information about rising damp or dry rot in replies to enquiries.
A buyer can claim misrepresentation if the seller fails to disclose any information in the replies to enquires. It is not even necessary for the buyer to have read the replies.
There is no onus on the seller to disclose any physical defects, it is for the buyer to discover them.
A buyer can pull out of a deal before contracts are exchanged.
There is an onus on the seller to disclose any physical defects in the property.
There is no onus on the seller to disclose any physical defects, it is for the buyer to discover them.
Correct. This demonstrates the application of the principle of ‘caveat emptor’.
In which of the following situations would co-ownership issues not need to be considered?
Two individuals buying a property from which they will run their business
An individual buying a house to be held on trust for his grandchildren
Four friends are buying a property together
A man is buying a property by himself with a contribution to the purchase price from his brother
A company is buying a property
A company is buying a property
Correct. Only one entity is buying the property here so co-ownership issues do not need to be considered.
Which of these following statements applies in respect of the equitable title (ownership)?
There can only be a maximum of 4 who hold the title
You can hold the title as joint tenants or tenants in common.
You must be over 18 to hold the title
You can only hold the title as tenants in common
You can only hold the title as joint tenants
You can hold the title as joint tenants or tenants in common.
Correct. There is more flexibility regarding the equitable ownership. There is no limit to the number of equitable owners, a minor can hold the equitable title and the equitable owners can choose to hold the title as joint tenants or tenants in common.
Two clients are buying a property together. They are contributing in equal proportions to the purchase price but have stated they want to be able to pass their share in the property under a will should they die during the ownership of the property. Which of the following correctly explains the best advice you should give your clients?
The legal title should be held by them as joints tenants because the right of survivorship will apply
The equitable title should be held by them as joints tenants because they are contributing equal proportions to the purchase price
The equitable title should be held by them as joints tenants because the right of survivorship will apply
The equitable title should be held by them as tenants in common because the right of survivorship will not then apply
The legal title should be held by them as tenants in common because the right of survivorship will not then apply
The equitable title should be held by them as tenants in common because the right of survivorship will not then apply
Correct. The clients have advised us they do not want the right of survivorship to apply, they wish to be able to leave their share of the property under a will. Therefore, they should hold the equitable title as tenants in common, which means they are seen as owning their own share in the property.
Two clients are buying a property together. They are contributing in equal proportions to the purchase price but have stated they want to be able to pass their share in the property under a will should they die during the ownership of the property. Which of the following correctly explains the best advice you should give your clients?
The legal title should be held by them as joints tenants because the right of survivorship will apply
The equitable title should be held by them as joints tenants because they are contributing equal proportions to the purchase price
The equitable title should be held by them as joints tenants because the right of survivorship will apply
The equitable title should be held by them as tenants in common because the right of survivorship will not then apply
The legal title should be held by them as tenants in common because the right of survivorship will not then apply
The equitable title should be held by them as tenants in common because the right of survivorship will not then apply
Correct. The clients have advised us they do not want the right of survivorship to apply, they wish to be able to leave their share of the property under a will. Therefore, they should hold the equitable title as tenants in common, which means they are seen as owning their own share in the property.
Your client is buying a 1950s house that has been lived in continuously. Which of the following correctly explains the advice you should give your client about surveys?
A home buyer’s survey should be carried out because this is the most detailed survey
A homebuyer report would be appropriate for this kind of property.
A basic valuation need only be carried out because this is all a lender requires
A full structural survey should be carried out because this is the most detailed survey
A structural survey should be carried out as this is the only survey that gives a valuation.
A homebuyer report would be appropriate for this kind of property.
Correct. The basic survey should not be relied upon, and a homebuyer report will give the buyer important detail about the house.
You are acting for the seller of a property. Which of the following types of tax do you need to consider may be payable by your client depending upon the circumstances?
SDLT only
VAT only
SDLT and VAT
Capital Gains Tax and SDLT
Capital Gains Tax and VAT
Capital Gains Tax and VAT
Correct. Capital Gains Tax (CGT) is a tax on the profit when you sell of an asset. It may therefore be payable depending upon the circumstances. VAT (value added tax) is a tax where a business charges VAT on its sales and recovers VAT on its purchases. It may be payable, you would need more information from the client.
Which of the following statements is correct in respect of interest rates?
A low risk borrower is likely to be charged a higher interest rate
The interest rate is the cost of debt for the lender
A high risk borrower is likely to be charged a lower interest rate
A high risk borrower is likely to be charged a higher interest rate
The higher the interest rate the lower the monthly payments that a borrower will make
A high risk borrower is likely to be charged a higher interest rate
Correct. When the borrower is consider a high risk, the interest rate they will be charged will be higher. This means the cost of the debt for the borrower is higher. This reflects the risk the lender is taking by loaning to the borrower.
A borrower is repaying monthly sums on their mortgage loan. At the end of the term they will have repaid all sums owed through these repayments. Which of the following types of mortgage loan will the borrower have?
An interest only mortgage
A capital repayment mortgage
A sharia-compliant mortgage
A pension mortgage
An endowment mortgage
A capital repayment mortgage
Correct. A Capital Repayment mortgage is the basic way of repaying all mortgages. With repayment mortgages, each month you repay some of the interest you owe plus some of the money (capital) borrowed. At the end of the period the borrower will have paid back everything they owe and will own their home outright.
Which of the following would be classed as a disbursement for a buyer in a property transaction?
SDLT
Legal Fees
The purchase price
Proceeds from any related sale
A mortgage loan
SDLT
Correct. SDLT would be classed as a disbursement, along with search fees and Land Registry fees. A buyer must have sufficient funds to pay for these in addition to the costs of the transaction.
A solicitor is instructed on the purchase of a parcel of land for development. The client is also interested in negotiating the purchase of a neighbouring parcel of land, and finds out that the same solicitor had acted for the owner of that land. The client asks the solicitor if the solicitor can provide a copy of the report on title prepared for the owner. The report on title is over 20 years old.
Can the solicitor comply with the client’s request to provide a copy of the report on title?
A. No, not in any circumstances because it is never possible to pass one client’s papers to another client.
B. No, because the solicitor owes a duty of confidentiality to the owner. However, if the owner consents, then the solicitor can comply.
C. Yes, because a solicitor’s duty to act in the best interests of their client override all other considerations.
D. Yes, because the report is over 20 years old and data protection rules didn’t exist then.
E. Yes, because the solicitor prepared the report on title, it is in the solicitor’s archives, and therefore it is the solicitor’s property.
B. No, because the solicitor owes a duty of confidentiality to the owner. However, if the owner consents, then the solicitor can comply.
You act for an investor client in buying a house. You also act for the client’s lender, a high street bank, who has instructed you to secure their loan with a mortgage over the property. Your local search has been delayed and you do not have the results. Your client is desperate not to lose the property, and tells you to exchange immediately.
Which of the following statements best describes your position?
A. You cannot exchange without a local search because the lender would then be committed to lend the money and bear the risk of any adverse entries.
B. You cannot exchange without a local search because the client cannot override your duty to act in the client’s best interests.
C. You can exchange, but you should leave at least 10 working days until completion to give you a chance to resolve any issues on the local search.
D. You can exchange, but you should advise your client that you will not be able to certify title to the lender unless you have a clear local search.
E. You can exchange. You told your client in your initial letter what exchange meant, and it is the client’s decision.
D. You can exchange, but you should advise your client that you will not be able to certify title to the lender unless you have a clear local search.
legally/technically you can but you want to be careful!
local searches is one of the biggest searches that you do (an important search, always get one!)
when acting for the lender, the lender wants reassurance that it is safe (if no reassurance, then no loan)
by going ahead (D) the risk is for the investor as the lender may not lend if there is no search (unless it comes back in time)
A man comes into the office to instruct the solicitor on the sale of a house owned by him and his partner. The solicitor asks if the partner can come into the office as well, and the man explains that the partner works long shifts at the local hospital and therefore will not have an opportunity to attend the office or speak to the solicitor. He declines to give out the partner’s work telephone number. What should the solicitor do?
A. The solicitor should decline instructions as a conflict of interest has arisen.
B. The solicitor should proceed with the conveyancing as a couple buying a house together will have a substantially common interest, and one partner can speak for both.
C. The solicitor should not proceed until the man allows the solicitor to speak to his partner to confirm instructions.
D. The solicitor may proceed if the partner sends an email to confirm instructions.
E. The solicitor should call the hospital switchboard and ask to speak to the partner directly.
C. The solicitor should not proceed until the man allows the solicitor to speak to his partner to confirm instructions.
“until the man allows” - slightly odd wording, don’t read too much into it
A - no conflict of interest
B - no
D - next best thing but how do you know email is authentic
E - client declined to give the partner’s work telephone number
A client has entered into a contract to sell her house. After the exchange of contracts, the client seeks your advice about whether she may keep the light fitting in the sitting room. This is held to the ceiling by three small screws and was made by the client’s late father. The light fitting is not mentioned in the contract.
May the client remove the light fitting before completion?
A. No, because the light fitting is likely to be a fixture due to the high degree of attachment. B. No, because the removal would constitute a breach of an implied term of the contract as the room would be unlit when the new owners moved in.
C. No, because any item within a property is permanently part of the land and must not be removed.
D. Yes, because the light fitting is likely to be a chattel due to the slight degree of attachment.
E. Yes, because any item with sentimental value is always removable.
technically, land law question
D. Yes, because the light fitting is likely to be a chattel due to the slight degree of attachment.
A client goes to see his solicitor because his neighbour’s roof has recently fallen into disrepair and he wants to see if he can do anything about it. He shows his solicitor a deed in which the neighbour gave a covenant for the benefit of the client’s house “not to let the roof fall into disrepair.”
Which of the following best describes why the client is likely to be able to sue the neighbour under this covenant?
A. Because the building scheme exception will apply.
B. Because the doctrine of mutual benefit and burden will apply. C. Because it is a positive covenant.
D. Because it is a restrictive covenant.
E. Because the neighbour was the original party to the deed.
E. Because the neighbour was the original party to the deed.
it is a positive covenant but that is not why they can sue
they can only sue because the NEIGHBOUR entered into the positive covenant directly with our client
positive covenants do no run with the land
You are acting for the buyer of a property. In an effort to speed up the sale, you submit searches which will involve an expense to your client. These form part of your investigation of title. At what point in the transaction would you expect to send these?
After completion.
As soon as your client indicates that they have put an offer in on the property.
After you have ensured that the draft contract is in final form.
After exchange of contracts.
After receiving a draft contract and before exchange of contracts.
After receiving a draft contract and before exchange of contracts.
Correct. Any issues which might arise need to be dealt with in the contract. You don’t necessarily know who the buyer is once you have received instructions from your seller client - you need the Heads of Terms. After agreeing the contract is too late - and the contract will be agreed by exchange. After completion is far too late. The best answer here is before exchange of contracts. Often it is once you have received the Heads of Terms - you will send the official copies and the standard CPSE replies if your firm has some prepared. If not, the buyer’s solicitor will send their standard set of CPSEs and enquiries.
You act for a client buying a house at a price of £200,000 with the help of an 80% mortgage. Searches and enquiries have been carried out, and you have agreed with the seller’s solicitor to aim for exchange by no later than the end of next week.
You receive a call from the seller’s solicitor to say that the seller has had an offer from a third party of £210,000 and that your client will need to match it, or the seller will sell to the third party.
Your client tells you that they were already overstretching themselves, and it will be impossible to do this.
How do you advise your client?
You should see whether your client wishes for you to refer it to a litigation colleague to issue proceedings to force the sale to proceed.
You advise your client that as you are holding the contract, you can exercise a lien over it and refuse to return it to the seller’s solicitor until they honour the original price agreed.
Your client should be prepared to lose the property, but at least they can recover the costs of their searches and survey from the seller.
You should ask to see proof of the third party’s offer, as a seller may only withdraw from an existing sale if a genuine offer has been received.
Your client can see if they can persuade the seller to honour the original price, but if the seller refuses, then your client will unfortunately lose the property.
Your client can see if they can persuade the seller to honour the original price, but if the seller refuses, then your client will unfortunately lose the property.
Correct. Until exchange of contracts, either party can walk away from the deal without incurring any liability. The seller can choose to sell to another party who is offering a higher price without any liability - this is know as ‘gazumping’ in practice. There is no obligation on the seller to prove another genuine offer has been received and the buyer would not be able to recover the costs of their searches and survey from the seller.
You act for a client buying a house near an industrial plant. When viewing the house, your client was concerned by offensive chemical smells coming from the plant. The seller reassured your client both verbally and in a written reply to enquiries that it only happens once or twice a year when the plant carry out a particular process.
The contract incorporated the Standard Conditions of Sale (Fifth Edition).
Following completion, your client calls to say that the plant emits the smell every weekend. Correspondence with the plant operator confirms that they carry out the process weekly, and have done for the last few years. Your client’s surveyor gives the opinion that the house is worth £20,000 less than it would be if the seller’s statement had been correct.
Which of the following options best describes if your client can make a claim for damages?
Your client cannot make a claim against the seller because it is a subjective matter and most of the neighbours are not offended by the smell
Your client cannot make a claim for damages as it has not suffered any loss in the circumstances
Your client may wish to a claim for damages from the seller based on misrepresentation
Your client cannot make a claim against the seller because of the principle of caveat emptor
Your client may wish to claim for damages from the search provider as this should have been flagged in the desktop environmental report
Your client may wish to a claim for damages from the seller based on misrepresentation
Correct. Although the principle ‘caveat emptor’ means the buyer takes the property as it find its and there is no onus on the seller to disclose patent incumbrances or physical defects in the property, the seller cannot mislead the buyer by answering questions dishonestly, which it has done here. The standard conditions of sale do not require the buyer the prove they were induced to reply on the conduct or statement; it is sufficient to prove that there was an error or omissions, which there has been there. The client can therefore make a claim for damages.
You act for a buyer who is buying a house with a loan to be secured by a mortgage. You also act for the mortgage lender.
One of the conditions of the mortgage is that the buyer will meet the balance of the purchase price from their own funds, and not further borrowing.
You are due to exchange tomorrow, or the seller has indicated that they may withdraw from the transaction. The deposit has arrived today. Your accounts department tell you that the payment has been made from a company who only deal in personal loans.
How should you proceed?
You should advise your client that the loan company should have made the payment to your client, and then from their account to you, so that it would appear as a cash advance.
You should notify your lender client, and let your client know when you have their response.
Under the Conveyancing Protocol, you should advise the seller’s solicitor of the issue so that they understand the cause of the delay.
Given the urgency of the transaction, you should exchange, but raise this issue with the client before completion.
You should advise your client that you will need to disclose this to your lender client, and if your client does not give their consent to you doing this, you will need to cease acting for both buyer and lender.
You should advise your client that you will need to disclose this to your lender client, and if your client does not give their consent to you doing this, you will need to cease acting for both buyer and lender.
This is correct. In residential transactions it is common for the buyer’s solicitor to act for the lender because there is unlikely to be a conflict of interest between these parties.
On the facts, you have a duty to disclose (CCS 6.4) all information material to the matter which you have knowledge, which includes the fact the balance of the purchase price is being met by a company who deal in personal loans, not the buyer ie in breach of one of the conditions of the mortgage.
The duty of confidentiality (CCS 6.3) that you owe your buyer client will override the duty, which means you cannot disclose this information without the permission of the buyer.
If the buyer does not give consent, you will have to cease to act for the lender. You would be advised to stop acting for the buyer as well.
A solicitor is acting for a buyer of a registered freehold title in England. Part of the purchase price is to be funded by a mortgage loan.
Which of the following options describes what the buyer’s solicitor will do after completion of the purchase?
Report on title to the buyer.
Exchange contracts.
Pay Stamp Duty Land Tax and register the buyer as owner of the property, and the lender as a chargee, at the Land Registry.
Pay off the outstanding balance of the seller’s mortgage.
Nothing. Completion marks the end of the transaction.
Pay Stamp Duty Land Tax and register the buyer as owner of the property, and the lender as a chargee, at the Land Registry.
Correct. These are the main tasks for the buyer’s solicitor to carry out after completion.
Which of the following documents are required to deduce title to registered land?
Estate agent’s particulars, official copies of the register, a survey report, title plan and copies of all documents referred to in the official copies.
Survey report, official copies of the register and title plan.
Official copies of the register.
Title plan, official copies of the register and copies of all documents referred to in the official copies.
Official copies of the register, title plan and copies of documents referred to in the official copies where the relevant rights have not been fully extracted.
Official copies of the register, title plan and copies of documents referred to in the official copies where the relevant rights have not been fully extracted.
Correct, you have understood which documents comprise the title to registered land.
Which is the correct order of the three registers in the Official Copies?
1) Property Register, 2) Charges Register, 3) Proprietorship Register.
1) Charges Register, 2) Property Register, 3) Proprietorship Register.
1) Proprietorship Register, 2) Property Register, 3) Charges Register.
1) Charges Register, 2) Proprietorship Register, 3) Property Register.
1) Property Register, 2) Proprietorship Register, 3) Charges Register.
1) Property Register, 2) Proprietorship Register, 3) Charges Register.
correct
Match the description to the register:
gives the registered proprietor’s (owner’s) name and address, the class of title and entries affecting ownership
describes the property and any rights benefiting the property (eg, covenants or easements)
lists rights burdening the property (eg, mortgage, covenants, easements and leases)
Charges register
Proprietorship register
Property register
gives the registered proprietor’s (owner’s) name and address, the class of title and entries affecting ownership
Proprietorship register
describes the property and any rights benefiting the property (eg, covenants or easements)
Property register
lists rights burdening the property (eg, mortgage, covenants, easements and leases)
Charges register
Which one of the following entries, appearing on the official copies, is not fully extracted, so that the buyer’s solicitor would need to see a copy of the underlying document?
The land has the benefit of a right of way contained in a conveyance dated 27 March 1970.
The Transfer to the proprietor contains a covenant to observe and perform the covenants referred to in the Charges Register and of indemnity in respect thereof.
The land has the benefit of the following right contained in a conveyance dated 15 August 2000: a right of way on foot and with vehicles over the roadway shown hatched black on the plan.
A conveyance of the land in this title dated 17 February 1900 contains restrictive covenants details of which are set out in the schedule of restrictive covenants hereto.
Restriction: Except under an order of the Registrar no disposition by the proprietor of the land is to be registered without the consent of the proprietor of the charge dated 2 June 2003 in favour of the City and County Bank Public Limited Company referred to in the Charges Register.
The land has the benefit of a right of way contained in a conveyance dated 27 March 1970.
Correct. The buyer’s solicitor would need to see a copy of this conveyance to establish the details of the right of way eg which piece of land the right of way is over and any restrictions on its use.
The property your client is considering buying has the benefit of a right of way in the Property Register and the right of way extracted on the register does not refer to maintenance obligations.
Which ONE of the following is the most accurate list of the issues you need to consider and advise on in relation to this right?
Adequacy, Adoption and Registration of the burden.
Maintenance, Adequacy, Adoption and Registration of the benefit.
Maintenance, Adoption, Registration of the burden and Adequacy.
Adequacy, Adoption, Registration of the benefit and Registration of the burden.
Registration of the benefit and Registration of the burden.
Maintenance, Adoption, Registration of the burden and Adequacy.
Correct. You have understood the four issues to consider and discuss when the property has the benefit of a right of way.
The following entry appears in the property register of the official copies of a property your client is purchasing:
“A right of way to pass and repass day or night on foot only over the land coloured blue. Note: the land coloured blue is shown hatched black on the filed plan.”
Which ONE of the following statements in respect of this right is CORRECT?
If the right of way is not adequate for your client the solutions are either to seek insurance to cover breach, or approach the person with the benefit or go to the Upper Tribunal (Lands Chamber) to have the right modified.
The burden of the right of way should be registered in the charges register of the servient land.
The purchaser will not have to contribute towards maintenance of the right of way as there is no obligation to do so mentioned in the right.
The right of way is not extracted and so you will need to see a copy of the deed granting the right.
As the right of way is on foot only, the local authority cannot adopt the private road to make it into a public highway.
The burden of the right of way should be registered in the charges register of the servient land.
Correct. If the servient land is unregistered you would put a caution against first registration over the land so that you can ensure the burden of the right of way is registered in the charges register once the servient land is registered.
Which ONE of the following statements about the Property Register and its possible contents is CORRECT?
The Property Register contains the name of the registered proprietor.
The Property Register must always contain the benefit of a right of way.
The Property Register describes the property using the postal address and also by referring to the Title Plan.
An extracted right is the same thing as an excluded right.
The Property Register describes the property using the postal address and also by referring to the Title Plan.
correct
Which is the best class of title?
Possessory Title
Good Leasehold Title
Title Absolute
Qualified Title
Title Absolute
Yes, this is the best class of title.
Match the class of title to the description:
Is granted when the registered proprietor has shown that they have physical possession of the property, but has no title deeds or is claiming through adverse possession (‘squatters’ rights’)
Is where there is a specific defect in the title.
An example would be where a deed known to contain covenants or easements was missing on first registration.
Is granted when the leaseholder cannot provide evidence of the landlord’s title to the land.
The best and most common class of title.
It indicates no issues – the proprietor has satisfied the Land Registry that it is the true and proper owner of the property.
Title absolute
Qualified title
Good leasehold title
Possessory title
Is granted when the registered proprietor has shown that they have physical possession of the property, but has no title deeds or is claiming through adverse possession (‘squatters’ rights’)
Possessory title
Is where there is a specific defect in the title.
An example would be where a deed known to contain covenants or easements was missing on first registration.
Qualified title
Is granted when the leaseholder cannot provide evidence of the landlord’s title to the land.
Good leasehold title
The best and most common class of title.
It indicates no issues – the proprietor has satisfied the Land Registry that it is the true and proper owner of the property.
Title absolute
The seller is usually the registered proprietor. Which of the following situations would be an exception to this?
Where the seller is a limited liability partnership
Where there is more than one individual legal owner
Where the seller is a company
Where the seller is the executor of a deceased person’s estate
Where the seller is the executor of a deceased person’s estate
This is correct. The seller is usually the registered proprietor. An exception would be where the seller is the executor of a deceased person’s estate.
Which one of the following could appear in the Charges Register?
A lease granted out of the property.
A lender’s Restriction.
A tenant in common Restriction.
The benefit of an easement.
An indemnity covenant given by the seller when it bought the property.
A lease granted out of the property.
Correct. A lease granted out of the property burdens the property and appears in the Charges Register.
Interests burdening the property
Mortgage in favour of a lender — Usually, an undertaking is given on completion to discharge this so that the buyer takes free of mortgage.
Leases — These would normally be expected from the agent’s property description, but should always be reported, together with their terms.
Easements — We looked at the benefit of easements in the property register –
conversely, the land may be subject to rights of way, rights of light, rights of service media (pipes, cables, etc). These should always be reported to the client.
Covenants (restrictive or positive) — Either restrictive or positive covenants may be listed in the charges register — the important point is that it is their burden, not the benefit. These should always be reported to the client, with advice on appropriate action.
Which of the following statements about the entries on the official copies relating to a mortgage / charge is correct?
If there is a mortgage / charge over the property, there will be two entries in the Charges Register and one entry in the Proprietorship Register regarding it.
If there is a mortgage / charge over the property, there will be two entries in the Charges Register and no entries in the Proprietorship Register regarding it.
If there is a mortgage / charge over the property, there will be three entries in the Charges Register regarding it.
If there is a mortgage / charge over the property, there will be one entry in the Charges Register and one entry in the Proprietorship Register regarding it.
If there is a mortgage / charge over the property, there will be two entries in the Charges Register and one entry in the Proprietorship Register regarding it.
Correct. A mortgage / charge will have two entries in the Charges Register giving details of the mortgage / charge and also one entry in the Proprietorship Register – the lender’s Restriction.
The buyer will need to be certain it acquires the land free of any mortgage a seller has. Which of the following options is NOT something the buyer’s solicitor should be doing to ensure this happens?
Obtaining an appropriate undertaking from the seller’s solicitor to redeem the mortgage from the proceeds of sale on completion
Ensuring it transfers the buyer’s purchase monies to the lender on completion so that the lender can redeem its mortgage loan before then transferring the balance to the seller
Checking in enquiries that the seller will have sufficient funds to clear the mortgage
Ensuring that it is a term of the contract that the mortgage will be redeemed on completion
Correct
Ensuring it transfers the buyer’s purchase monies to the lender on completion so that the lender can redeem its mortgage loan before then transferring the balance to the seller
This is correct. The buyer’s solicitor will not transfer the purchase monies to the seller’s lender, it will sell them to the seller’s solicitor. The other options are all something the buyer’s solicitor should ensure it does to make sure the buyer takes the land free of the seller’s mortgage.
DKT Ltd (DKT) is buying a property and is concerned about covenants that burden the land. In particular DKT is concerned that its use as a textiles dyeing factory would breach a covenant which prohibits use as a factory. It has heard from the seller that they have spoken to the person owning the land with the benefit of the covenant who has indicated that they might consent to a breach of the covenant, for a price.
What is the next step you would recommend, in order to deal with this future breach?
Contact the Upper Tribunal (Lands Chamber) to get the covenant waived or removed.
Contact the person owning the land with the benefit of the covenant to request their written consent for the proposed breach.
Contact the person owning the land with the benefit of the covenant to request an easement to use the property as a textile dyeing factory.
Contact an insurance company for a quote for insurance in respect of the proposed breach.
Contact the person owning the land with the benefit of the covenant to request their written consent for the proposed breach.
Correct. As the person owning the land with the benefit of the covenant has already been approached insurance is no longer available as an option (otherwise getting an insurance quote would have been the first solution to attempt). We are requesting permission to breach a covenant here so easements are not relevant. The Upper Tribunal (Lands Chamber) is a last resort as it is time consuming and expensive.
incorrect
Contact an insurance company for a quote for insurance in respect of the proposed breach.
Incorrect. The option of approaching an insurer is no longer available as the person with the benefit of the covenant has already been contacted.
The Charges Register of a property contains a restrictive covenant stating that external alterations may not be made except with the consent of the Vendor, his heirs or assigns. The seller of the property added a front porch onto the property eleven years ago without obtaining consent. The buyer of the property thinks the front porch is not in keeping with the building and is removing it on completion.
Which one of the following is the most correct on these facts?
No solution is needed as, since the restrictive covenant breach occurred more than ten years ago, the person owning the land with the benefit of the covenant is unable to claim for any loss.
The past breach is not continuing and so no solution is needed unless the person owning the land with the benefit of the covenant has claimed they suffered loss.
The buyer’s solicitor should arrange an insurance policy covering the past breach of the covenant.
The seller’s solicitor should arrange an insurance policy covering the past breach of the covenant.
The past breach is not continuing and so no solution is needed unless the person owning the land with the benefit of the covenant has claimed they suffered loss.
Correct. As the buyer is removing the porch (the alteration which breached the restrictive covenant), the past breach will not be continuing and so a solution is not needed unless the person owning the land with the benefit of the covenant has complained about the breach or claimed for loss.
incorrect
The buyer’s solicitor should arrange an insurance policy covering the past breach of the covenant.
Incorrect. Insurance is a solution for a past breach of a restrictive covenant although as it is the seller’s breach, the buyer’s solicitor would ask the seller to obtain and pay for the insurance policy.
The seller’s solicitor should arrange an insurance policy covering the past breach of the covenant.
Incorrect. Insurance is a solution for a past breach of a restrictive covenant however, since the buyer is removing the porch (the alteration which breached the restrictive covenant), the past breach will not be continuing and so a solution is not needed unless the person owning the land with the benefit of the covenant has complained about the breach or claimed for loss.
Which one of the following statements about insurance for breach of a restrictive covenant is correct?
S.19(1) FSMA 2000 prevents a solicitor from arranging an insurance policy for breach of a restrictive covenant.
Insurance must be tried before approaching the person owning the land with the benefit of the covenant.
The buyer would have to arrange any insurance policy so that it was covered (ie protected) by the policy.
Insurance for a future breach of a restrictive covenant is expensive because it is difficult for the insurer to assess the risk of the breach occurring.
The seller will pay the initial premium for the insurance policy and thereafter the buyer will pay the annual insurance premiums for the policy.
Insurance must be tried before approaching the person owning the land with the benefit of the covenant.
Correct. Once the person owning the land with the benefit of the covenant (PWB) is approached insurance will be unavailable since the PWB has been alerted to the breach and is now much more likely to be aware they can make a claim for loss.
incorrect
Insurance for a future breach of a restrictive covenant is expensive because it is difficult for the insurer to assess the risk of the breach occurring.
Incorrect. Insurance for a future breach is expensive because it is difficult for the insurer to assess the risk of the person who owns the land with the benefit of the covenant (PWB) coming forward to make a claim for loss. This is because the breach has not occurred yet so there is no time period for which the breach has occurred and the PWB has not come forward which the insurer can use to assess the risk of the PWB coming forward in the future.
Which of the following best describes whether a positive covenant registered in the charges register will bind the buyer of a registered freehold property?
The buyer will not be bound by the positive covenant unless there is also a charge restriction in the proprietorship register.
The buyer will be bound by the positive covenant as it is registered in the charges register of the property.
The buyer will not be bound by the positive covenant despite it appearing in the charges register as positive covenants do not run with the land and so cannot bind buyers of the property.
The buyer will be contractually bound by the positive covenant if an indemnity covenant note appears in the proprietorship register as the seller will require an indemnity covenant from the buyer.
The buyer will be contractually bound by the positive covenant if an indemnity covenant note appears in the proprietorship register as the seller will require an indemnity covenant from the buyer.
Correct. Positive covenants do not run with the land but can be made contractually binding if there is a chain of indemnity covenants. An indemnity covenant note on the proprietorship register shows whether the seller gave an indemnity covenant and the standard conditions in the contract require the buyer to give an indemnity covenant if the seller did.
Which of the following best sets out the remedies, in the order they should be attempted, for a future breach by the buyer of a binding positive covenant?
1) Seller to remedy the breach / reduce the purchase price, 2) Insurance against the PWB claiming loss caused by the breach, 3) Approaching the PWB for consent to breach the covenant.
1) Insurance against the PWB claiming loss caused by the breach, 2) Approaching the PWB for consent to breach the covenant.
1) Seller to remedy the breach / reduce the purchase price, 2) Insurance against the PWB claiming loss caused by the breach, 3) Approaching the PWB for consent to breach the covenant, 4) Going to the Upper Tribunal (Lands Chamber) to have the covenant modified or discharged.
1) Insurance against the PWB claiming loss caused by the breach, 2) Approaching the PWB for consent to breach the covenant, 3) Going to the Upper Tribunal (Lands Chamber) to have the covenant modified or discharged.
1) Approaching the PWB for consent to breach the covenant, 2) Insurance against the PWB claiming loss caused by the breach.
1) Insurance against the PWB claiming loss caused by the breach, 2) Approaching the PWB for consent to breach the covenant.
Correct. As the breach is a future one to be carried out by the buyer, the seller will not remedy it. The PWB should not be approached prior to an insurance quote being obtained as once the PWB is approached insurance will not be available (it will be a condition of the insurance that the PWB has not been and will not be approached). The Upper Tribunal (Lands Chamber) is not available for positive covenants (s.84 LPA 1925).
Which of the following statements is the most accurate description of an epitome of title?
An epitome is a list of title documents relating to a specific property.
An epitome is a set of copies of relevant title documents with a front sheet setting out details of the documents.
An epitome is a set of copies of relevant title documents.
An epitome is a set of copies of the title register.
An epitome is a set of original relevant title documents with a front sheet setting out details of the documents.
An epitome is a set of copies of relevant title documents with a front sheet setting out details of the documents.
correct
What are the dates for compulsory first registration for 1) transfers of land for value and 2) transfers of land other than for value?
1) 1 January 1996 and 2) 1 December 1990
1) 1 April 1998 and 2) 1 January 1996
1) 31 July 1990 and 2) 1 December 1990
1) 1 December 1990 and 2) 31 July 1990
1) 1 December 1990 and 2) 1 April 1998
1) 1 December 1990 and 2) 1 April 1998
correct
A seller is selling unregistered land with the following history:
- The seller bought the land in 1977 for £3,000 with a mortgage. The 1977 conveyance states that the land is sold subject to covenants in a conveyance dated 3 June 1956.
- In 1978 the seller granted a five year lease of the land for value.
- The mortgage is still in place, and the seller intends to discharge it from the proceeds of sale.
Which of the following best describes the relevant documents to include copies of in the epitome of title for the land?
The 1956 conveyance, the 1977 conveyance, the 1978 lease and the seller’s mortgage
The 1977 conveyance, the 1978 lease and the seller’s mortgage.
The 1956 conveyance and the 1977 conveyance.
The 1956 conveyance, the 1977 conveyance, and the seller’s mortgage.
The 1956 conveyance, the 1977 conveyance, and the seller’s mortgage.
The 1956 conveyance, the 1977 conveyance, and the seller’s mortgage.
You act for a client Susan Wolston on the sale of an industrial building. Title to the property is unregistered. The deeds packet contains the following documents:
- Conveyance dated 1988 between Acton (Millinery) Ltd and Susan Wolston.
- Bundle of searches and enquiries dated 1988.
- Mortgage dated 1988 between Royal Bank of Scotland plc and Susan Wolston.
- Planning permission dated 1990 for an extension to the building.
Which one of the following best describes the documents which must be included in the epitome?
- Conveyance dated 1988 between Acton (Millinery) Ltd and Susan Wolston.
- Mortgage dated 1988 between Royal Bank of Scotland plc and Susan Wolston.
- Bundle of searches and enquiries dated 1988.
- Conveyance dated 1988 between Acton (Millinery) Ltd and Susan Wolston.
- Conveyance dated 1988 between Acton (Millinery) Ltd and Susan Wolston.
- Mortgage dated 1988 between Royal Bank of Scotland plc and Susan Wolston.
- Conveyance dated 1988 between Acton (Millinery) Ltd and Susan Wolston.
- Mortgage dated 1988 between Royal Bank of Scotland plc and Susan Wolston.
- Planning permission dated 1990 for an extension to the building.
All of the documents listed.
- Conveyance dated 1988 between Acton (Millinery) Ltd and Susan Wolston.
- Mortgage dated 1988 between Royal Bank of Scotland plc and Susan Wolston.Correct.
correct
The 1988 conveyance is the root conveyance (the conveyance to the current seller) and must be included. The 1988 mortgage is the current seller’s mortgage, entered into at the same time as the root conveyance. This must be included in the epitome, even though it will be redeemed at completion (and even if it has already been redeemed, as it post-dates the root of title).
A root of title conveyance containing covenants is dated 2 September 1989. The conveyance was from a company (the seller) to an individual (the buyer). Which one of the following would be correct execution of the root?
The buyer should have executed the conveyance by two directors or one director and the company secretary signing it. The seller should have executed the conveyance by signing with a witness and delivering it.
The seller should have affixed their company seal in the presence of two directors or one director and the company secretary who have both signed the conveyance. The buyer should have executed the conveyance by signing with a witness, sealing and delivering it.
The seller should have executed the conveyance by two directors or one director and the company secretary signing it. The buyer should have executed the conveyance by signing with a witness, sealing and delivering it.
The seller should have affixed their company seal in the presence of two directors or one director and the company secretary who have both signed the conveyance. The buyer should have executed the conveyance by signing with a witness and delivering it.
The seller should have executed the conveyance by two directors or one director and the company secretary signing it. The buyer should have executed the conveyance by signing with a witness and delivering it.
The seller should have affixed their company seal in the presence of two directors or one director and the company secretary who have both signed the conveyance. The buyer should have executed the conveyance by signing with a witness, sealing and delivering it.
Correct. These were correct execution methods for conveyances dated pre 31 July 1990.
What should you do if, acting for a buyer, the epitome of title contains an unstamped root of title conveyance?
Get the seller to arrange for the root conveyance to be stamped as soon as possible.
Arrange for the seller to get the root conveyance stamped as soon as possible after completion.
Pull out of the purchase as you cannot retrospectively stamp a conveyance.
Nothing as it is only a problem if one of the parties wants to rely on it in court.
Get the seller to arrange for the root conveyance to be stamped as soon as possible.
This is correct. You would need to see evidence of this before exchange and completion.
You are acting for the buyer of an unregistered property and the seller’s solicitor has provided you with the epitome of title to the property. The epitome contains:a 1989 conveyance and a 1977 conveyance.
The 1989 conveyance contains a PD stamp and sets out the extent of the property by reference to the 1977 conveyance.
The 1977 conveyance contains a plan showing the extent of the property and has a PD stamp and an ad valorem stamp.
Which of the following statements is correct?
The 1989 conveyance cannot be a good root of title as the property should have been registered for the first time when it was conveyed in 1989
The 1989 conveyance cannot be a good root of title as it does not contain a plan showing the extent of the property.
The 1989 conveyance could be a good root of title provided it contains a certificate of value.
The 1977 conveyance is the good root of title as it is the only conveyance which complies with all the requirements of a good root of title.
The 1989 conveyance could be a good root of title provided it contains a certificate of value.
Correct. The 1989 conveyance does not have an ad valorem stamp but provided it has a certificate of value (to go with the PD stamp) then it has been correctly stamped. The last date for compulsory first registration was 1 December 1990 and you have no information to tell you that the property was in an area that was subject to compulsory first registration before this date. Provided the 1977 conveyance (with plan) is included in the epitome, it does not matter that the description of the property in the 1989 conveyance is only by reference to the 1977 conveyance.
Which one of the following statements is correct regarding covenants in an unregistered title?
Restrictive covenants bind a purchaser if they are registered as a class d(ii) land charge.
An indemnity covenant means that the original covenantor is not liable for the covenants to which the indemnity covenant relates.
Positive covenants bind a purchaser if they are registered as a class d(ii) land charge.
If a deed refers back to an earlier deed containing covenants, then those covenants will only be relevant if the earlier deed is provided in the epitome.
Positive covenants can be ignored as they do not bind the land.
need to do this set of MCQS (Title Issues)
You act for the buyer of a residential house on a plot of registered freehold land. The plot forms part of a new development. The buyer has agreed to enter into the following covenants: (1) not to use the Property for anything other than a private residence and (2) to erect and hereafter maintain a fence of no less than 2 metres in height along the northern and western boundaries of the Property.
What types of covenants are (1) and (2) and on which of the registers at Land Registry for the title to the buyer’s plot would you expect to see the two covenants entered?
A. (1) and (2) are both positive covenants and would be entered on the Charges register.
B. (1) is a restrictive covenant and (2) is a positive covenant and both would be entered on the Charges Register.
C. (1) is a restrictive covenant and would be entered on the Property Register and (2) is a positive covenant and would be entered on the Charges Register.
D. (1) and (2) are both restrictive covenants and both would be entered on the Charges Register.
E. (1) is a restrictive covenant and (2) is a positive covenant and only (1) would be entered on the Charges Register. (2) would not be entered as positive covenants cannot run with the land.
B. (1) is a restrictive covenant and (2) is a positive covenant and both would be entered on the Charges Register.
Covenants (restrictive or positive) — Either restrictive or positive covenants may be listed in the charges register — the important point is that it is their burden, not the benefit. These should always be reported to the client, with advice on appropriate action.
You are instructed to sell a farm, the land of which comprises various parcels of land, all of which are unregistered with separate bundles of deeds.
Which of the following documents would constitute a good root of title acceptable to a buyer’s solicitor?
A. A declaration of trust in favour of your client dated 25 October 1989
B. A conveyance to your client dated 25 October 1989 in your client’s former name together with a marriage certificate showing your client’s former name and spouse’s name (matching client’s current name)
C. A conveyance to your client dated 25 October 1989 in your client’s current name which states that it passes “bare legal title” to the buyer.
D. A conveyance to your client dated 25 October 1991 in your client’s current name.
E. Your client’s friend’s will 25 October 1979 in which they gift one of the parcels to your client
B. A conveyance to your client dated 25 October 1989 in your client’s former name together with a marriage certificate showing your client’s former name and spouse’s name (matching client’s current name)
different names would cast doubt!
so need marriage certificate
a will does not convey title (just wishes)
you want a conveyance!
You are instructed to sell a farm, the title to which is unregistered, and are in the process of deducing title. The deeds include: a conveyance (root of title); a power of attorney under which the conveyance was executed; conveyances predating the root of title that do not contain any additional rights; a death certificate of one of the joint tenants of the farm.
Which of the following deeds should you include?
A. The power of attorney and the death certificate.
B. The root of title and the previous conveyances.
C. The power of attorney and the root of title.
D. The power of attorney, the root of title and the death certificate. E. All of them
D. The power of attorney, the root of title and the death certificate.
power of attorney - cast no doubt
root of title needed
no need for previous conveyances as it does not add anything (unless it deals with additional rights that predate root of title)
also need to check when unregistered: land charges search against the name (not the address of the property)
You are instructed to sell a farm, the title to which is unregistered, and are in the process of deducing title.
The deeds include: a conveyance (root of title); a power of attorney under which the conveyance was executed; conveyances predating the root of title that do not contain any additional rights; a death certificate of one of the joint tenants of the farm.
Which of the following deeds should you include?
A. The power of attorney and the death certificate.
B. The root of title and the previous conveyances.
C. The power of attorney and the root of title.
D. The power of attorney, the root of title and the death certificate.
E. All of them
TO DO
When is a report on title sent to a purchaser?
After exchange of contracts.
Before exchange of contracts
After completion.
Upon being instructed by the client
Before exchange of contracts
Correct
This is correct. It is a report setting out all the matters relating to a property that the purchaser must review and make their mind up whether to buy the property. A purchaser is committed to purchase the property at exchange of contracts therefore the report must be sent out in good time before this point. It is unlikely that as soon as a solicitor has been instructed by the client that they would have had the search results and carried out the title investigation. It usually takes a few weeks for a solicitor to carry out the title investigation and then compile the report.
A solicitor is preparing a report on title. Which of the following approaches will best help the solicitor meet its conduct requirements?
Giving the client only that information which would put the client off continuing with the purchase, and it is for the client to question anything that they do not understand.
Giving the client only that information which would put the client off continuing with the purchase in a way that the client can understand.
Giving the client all material information of which the solicitor has knowledge in a way that the client can understand.
Giving the client all material information of which the solicitor has knowledge in precise language, and it is for the client to question anything that they do not understand.
Giving the client all material information of which the solicitor has knowledge in a way that the client can understand.
Correct. A well drafted report on title will help with these requirements.
Which ONE of the following matters is typically reported on in a report on title?
Details of any rights benefiting the property.
Details of the inspection of the property by the conveyancer.
Details of the conveyancer’s terms and conditions of business.
An opinion on the value of the property.
Details of any rights benefiting the property.
Correct
This is correct. The rights benefitting the property will be evident in the conveyancer’s title investigation of the property. The conveyancer would not have inspected the property and indeed it would make it clear as a limitation in the report that such an inspection had not taken place. The conveyancer’s terms and conditions of business would have been sent to the client upon being instructed. The report will not advise on the value of the property and whether the property is being purchased for the right price. This is something a surveyor would be able to advise on, not a solicitor.
Which of the following searches does NOT form part of the ‘local search’?
Highways search
Enquiries of the Local Authority (CON 29)
Local Land Charges Search (LLC1)
Additional Local Authority Enquiries (CON 29O)
Highways search
Correct
Correct. This is a search with the Highways Authority, rather than the Local Authority. The Local Search are enquiries with the Local Authority of the property.
Which of the following searches would you always order in a transaction?
Con29O (additional local search enquiries)
Drainage and Water
CON 29M (Coal Mining and Brine Search)
Waterways search
Company search
Drainage and Water
Correct. This search will always be carried out. The search checks matters such as whether foul and surface water from the property drain to a public sewer, and whether the property is connected to a mains water supply.
From where would you order any official searches from?
Companies House
A channel provider, such as SearchFlow
The Local Authority in which the property is located
The Land Registry
National Land Information Service
A channel provider, such as SearchFlow
Correct. The searches themselves are provided by channel providers (who offer an ‘ordering service’), such as SearchFlow, Thames Water Property Searches and GlobalX. Requesting searches via such channel providers is a typical trainee / paralegal job.
Where would you expect to find out whether a public footpath crosses a property?
Search of the Index Map Result (SIMR).
The Property Register of the Official Copy.
The Local Authority Search Result (CON29).
The Local Land Charges Search Result (LLC1).
The Local Authority Search Result (CON29).
Correct
Correct. There is a question to the local authority at enquiry 2.2 asking if there are any public rights of way (which would include footpaths) that abut or cross the property.
The Local Land Charges Search Result does not record details of footpaths, instead it records charges such as general and specific financial charges, planning charges, listed buildings charges. The Property Register of the Official Copy reveals rights benefitting the property such as private rights of way, not public footpaths. The Search of the Index Map Result reveals whether the area searched is registered or unregistered land, it does not provide any information on an any specific rights of way and indeed the Land Registry does not record public footpaths on its registers.
Your client is buying a house that has just had a loft conversion. Your client has asked you whether you can tell from the pre-contract papers whether the seller obtained any building regulation approval relating to the loft conversion. Where would you expect to find the answer?
The Local Authority Search Result (CON29).
The Local Authority Search Optional Enquiries (CON29O)
The Local Land Charges Search Result (LLC1).
The Local Authority Search Result (CON29).
Correct
Correct. There is a question to the local authority at enquiry 1.1(f) asking if there are any building regulation approvals and completion certificates issued in respect of the property.
Which of the following statements is correct in relation to the Local Land Charges Search (LLC1)?
The LLC1 is an official search of the Register maintained by the Land Registry.
The LLC1 result will reveal whether the property registered is common land or town or village green under the Commons Registration Act 1965 or the Commons Act 2006.
The LLC1 reveals planning permissions and restrictions against permitted development (known as an Article 4 Direction).
The LLC1 will reveal details of any application for planning permission that has been refused.
In every transaction the LLC1 is submitted to the local authority together with the CON29O enquiries.
The LLC1 reveals planning permissions and restrictions against permitted development (known as an Article 4 Direction).
Correct
Correct. The LLC1 is always carried out and the result reveals among other matters planning permissions granted (not refused) and restrictions against permitted development (an Article 4 Direction). In every transaction the LLC1 is submitted to the local authority (usually via an online search platform such as Searchflow) together with the CON29. The solicitor may raise additional enquiries on CON29O but this is not required in every transaction. It is the CON29O that will reveal whether a property is registered as common land or town or village green, not the LLC1.
A man is the sole owner of a freehold property. The property is currently let out as office premises. The man plans to carry out internal works to the property so that it can be let out as a single private dwelling house when the current occupant’s lease comes to an end.
Will the man require planning permission for his plans for the property?
No, the internal works do not constitute development and nor does the change of use.
No, the internal works do not constitute development and nor does the change of use because the change is within the same use class.
Yes, although he will not require planning permission for the internal works, he will require planning permission for the change of use.
No, the internal works do not constitute development and nor does the change of use because it is a change to a single private dwelling house.
Yes, he will require planning permission for both the internal works and the change of use because they are developments which are not permitted.
Yes, although he will not require planning permission for the internal works, he will require planning permission for the change of use.
Correct. s. 55(2)(a) TCPA 1990 states that internal works do not constitute development. Classes E(g) (offices) and C3 (dwelling house) of TCP(UC)O 1987 were the relevant use classes. Changing from one use class to another is a ‘development’ because it is a material change in use’ unless the change is one that is permitted under Part 3, Schedule 2 GPDO 2015. Under the GPDO this is not a change of use that is ‘permitted development’. It would have been a change from B1 to C3 under the pre-1 September TCP(UC)O 1987 but was also not permitted under the GPDO 2015 so does not fall within the transitional provisions.
What is the effect of a property being in a conservation area?
It will be impossible to obtain planning permission for any proposed development of the property and the LPA may have made an Article 4 Direction.
Any planning permission granted for development is likely to be subject to more onerous conditions than if the property was outside of the conservation area and the Local Planning Authority (LPA) may have made an Article 4 Direction.
If a planning permission is granted the development must then be commenced within three months of the planning permission. The LPA may have made an Article 4 Direction.
The LPA will make an Article 4 Direction and constructing new buildings is prohibited.
The LPA is under a duty to make an Article 4 Direction in respect of all property in a conservation area.
Any planning permission granted for development is likely to be subject to more onerous conditions than if the property was outside of the conservation area and the Local Planning Authority (LPA) may have made an Article 4 Direction.
Correct. Areas are designated conversation areas because they have a special character or appearance and hence it is likely that any planning conditions (e.g. bricks to be in keeping with the surrounding buildings) will be more onerous than in areas outside of such an area. Article 4 Directions are also very common in conservation areas.
A company is the owner of a warehouse. The property is currently vacant. The company plans to carry out substantial internal works involving removing internal structural walls so that it can be let out as a restaurant.
What planning consents will the company require?
Planning permission for the change of use.
Planning permission for the internal works, planning permission for the material change of use and building regulation consent for the internal works.
Planning permission for the material change of use and building regulation consent for the internal works.
Building regulation consent for the internal works.
Planning permission and building regulation consent for the internal works.
Planning permission for the material change of use and building regulation consent for the internal works.
Correct. The building works are internal works and therefore do not constitute development (s.55(2) TCPA 1990). Planning permission for the internal works is not required. The change of use of the property from a warehouse (Class B8) to a restaurant (Class E(b)) is a ‘material change of use’ which constitutes ‘development’ and hence planning permission is required for the change of use. This change does not fall within the GPDO 2015, nor would it fall within the transitional provisions (being a change in the pre-1 September TCP(UC)O 1987 from B8 to A3). As internal works are taking place, building regulation consent is required.
incorrect
Planning permission for the internal works, planning permission for the material change of use and building regulation consent for the internal works.
Incorrect. The building works are internal works and therefore do not constitute development (s. 55(2) TCPA 1990). Planning permission for the internal works is not required. The change of use of the property from a warehouse (Class B8) to a restaurant (Class E(b)) is a ‘material change of use’ which constitutes ‘development’ and hence planning permission is required for the change of use. This change does not fall within the GPDO 2015, nor would it fall within the transitional provisions (being a change in the pre-1 September TCP(UC)O 1987 from B8 to A3). As internal works are taking place, building regulation consent is required.
A house was built three years ago and the owner is now selling it to your client.
Which of the following statements best describes the legislation regarding planning control?
The seller need not have obtained building regulations approval for the building of the house.
If building regulations approval had been needed, the local authority must serve an enforcement notice for the seller having not obtained it within six months from the date of completion of the building work that is in breach.
If building regulations approval had been needed, the time limit for the local authority to apply for an injunction for the seller having not obtained it is 10 years from the date of completion of the building work that is in breach.
If planning permission had been needed the time limit for the local authority to bring enforcement action for the seller not obtaining planning permission is 10 years from the date of substantial completion
If planning permission had been needed, the time limit for the local authority to bring enforcement action for the seller not obtaining planning permission is 4 years from the date of substantial completion.
If planning permission had been needed, the time limit for the local authority to bring enforcement action for the seller not obtaining planning permission is 4 years from the date of substantial completion.
Correct. The correct time limit for enforcement of lack of planning permission is 4 years from the date of substantial completion (s. 171B TCPA 1990).
Your client is buying a house that had a substantial kitchen extension constructed recently. The seller has confirmed that buildings regulations consent has not been obtained. Which one of the following statements is good advice to give to your client in the circumstances?
Request that the buyer inspects the kitchen and to report back to you if they think the works present any problems.
Request that the seller obtains a Regularisation Certificate before completion.
Advise the buyer to obtain a Regularisation Certificate before exchange of contracts.
Building Regulations consent is not required because extending a house is permitted development under GPDO 2015 provided the seller complied with the criteria laid out therein
Advise the buyer to obtain indemnity insurance upon completion.
Request that the seller obtains a Regularisation Certificate before completion.
Correct. Building Regulations is concerned with how the works take place – so building materials, insulation, health and safety, fire escapes are all matters that building regulations covers. All works whether internal or external require Building Regulations. The seller should be asked to rectify the situation and obtaining a Regularisation Certificate is retrospective consent by the local planning authority that they are happy with the construction work. If you did not obtain a Regularisation Certificate, the local planning authority could apply for an injunction at any time requiring your client to alter or remove works. This would not be fair since it is the seller who should have obtained the consent and who should pay for any works that need to be carried out in order to obtain the correct approval.
incorrect
Advise the buyer to obtain a Regularisation Certificate before exchange of contracts.
Incorrect. Building Regulations is concerned with how the works take place – so building materials, insulation, health and safety, fire escapes are all matters that building regulations covers. All works whether internal or external require Building Regulations. It is the seller here who should be picking up any costs or doing any of the running around of obtaining a Regularisation Certificate as it is the seller who is at fault here and the seller should ideally be in a position to confirm at exchange of contracts that obtaining the regularisation certificate will be possible by completion.
Which one of the following statements is the most accurate description of a Planning Enforcement Notice?
It cannot require buildings to be demolished.
It invites the recipient to respond about how any breach may be satisfactorily remedied.
It flushes out information about potential planning breaches.
It cannot exist independently of a Planning Contravention Notice.
Non-compliance could result in a fine and the local authority carrying out the necessary work at the land owner’s expense.
Non-compliance could result in a fine and the local authority carrying out the necessary work at the land owner’s expense.
correct
Which one of the following is correct regarding Commercial Property Standard Enquiries (the ‘CPSEs’)?
The CPSEs are raised in all residential property transactions.
The CPSEs will be requested by the buyer’s solicitor.
The CPSEs are delivered after exchange of contracts.
No supplemental enquiries may be raised in addition the CPSEs.
The CPSEs will be requested by the buyer’s solicitor.
Correct. The buyer will request the CPSE.1 and any relevant supplemental CPSE enquiries are raised usually by email. The seller’s solicitor will then ask their client to complete and when received back, will send on to the buyer’s solicitor.
Which one of the following is a requirement when using the Law Society Conveyancing Protocol (the ‘Protocol’)?
Additional enquiries seeking the seller’s opinion may be raised.
Raising an additional enquiry to clarify issues arising out of the buyer’s mortgage.
Submission to the buyer’s solicitor of Property Information Form (TA6) and CPSE.2.
Additional enquiries relating to any issues may be raised.
Confirm and update where necessary replies to enquiries if completed more than two months earlier.
Confirm and update where necessary replies to enquiries if completed more than two months earlier.
Correct. This is from paragraph 15 of the Protocol.
incorrect
Additional enquiries seeking the seller’s opinion may be raised.
Incorrect. Enquiries asking for the seller’s opinion are not allowed, only enquiries of fact are allowed.
Raising an additional enquiry to clarify issues arising out of the buyer’s mortgage.
Incorrect. The seller does not have any information about the buyer’s mortgage. This would be communication between the buyer’s solicitor and the buyer’s lender.
Submission to the buyer’s solicitor of Property Information Form (TA6) and CPSE.2.
Incorrect. TA6 is to be used in residential transactions but not CPSE.2.
A company is selling a piece of land. In preparing replies to enquiries, the company director states that the company “is not aware of any disputes with neighbouring properties”. The company director can find no disputes in her file for the property. However, the site manager of the land did have a significant verbal dispute (not written down) with the neighbouring land, which he did not bring to the attention of the director.
After completion, the buyer finds out about the dispute. Is the seller protected against a claim by the wording of the reply?
No, because the seller can only rely on written evidence to provide replies to enquiries.
Yes, because the seller has checked her records.
No, because the seller should not give a reply without being certain as to its truth and the wording “is not aware” has no effect.
No, the director should have spoken to the site manager.
No, the director should have spoken to the site manager.
Correct. The seller should make reasonable efforts to check records AND speak to appropriate people in the organisation.
Which one of the following is correct regarding the Law Society’s Conveyancing Protocol (the ‘Protocol’)?
The Protocol can be used in residential transactions of newly built homes.
The Protocol can be used in commercial transactions of freehold and leasehold property.
The Protocol can be used in residential transactions of freehold and leasehold property.
The Protocol must be followed by all solicitors.
The Protocol can be used in residential transactions of freehold and leasehold property.
correct
When using the Law Society’s Conveyancing Protocol, which list accurately sets out what the solicitors agree to adopt?
Standard Conditions of Sale (incorporated into the contract), Commercial Property Standard Enquiries, Formulae for exchange, Code for Completion by Post.
Standard Conditions of Sale (incorporated into the contract), Property Forms, Formulae for exchange, Code for Completion by Post.
Standard Commercial Property Conditions (incorporated into the contract), Property Forms, Formulae for exchange, Code for Completion by Post.
Standard Conditions of Sale (incorporated into the contract), Property Forms, Formulae for completion, Code for Completion by Post.
Standard Conditions of Sale (incorporated into the contract), Property Forms, Formulae for exchange, Code for Completion by Telephone.
Standard Conditions of Sale (incorporated into the contract), Property Forms, Formulae for exchange, Code for Completion by Post.
correct
Which one of the following actions would constitute compliance with the Law Society’s Conveyancing Protocol (‘the Protocol’)?
A seller’s solicitor sending to the buyer’s solicitor official copies of the register that are eight months old.
A buyer’s solicitor additional pre-contract enquiry as follows: “Has the property ever suffered from an infestation of rodents?’
A CQS solicitor not following the Protocol without any justification.
A buyer’s solicitor sending two pages of standard enquiries, as well as the Property Forms to the seller’s solicitor.
A buyer’s solicitor additional pre-contract enquiry as follows: “Has the property ever suffered from an infestation of rodents?’
Correct. This is an enquiry of fact, not opinion and the seller should give a reply.
incorrect
A buyer’s solicitor sending two pages of standard enquiries, as well as the Property Forms to the seller’s solicitor.
Incorrect. This would be a breach of the Protocol. The seller’s solicitor should only attend to the Property Forms and any additional enquiries that are essential to the transaction.
A buyer is buying an unregistered freehold property. The epitome reveals the following information: Company A sold the property in 1945 to Company B and Company B sold the property in 2003 to Company C. Company C is the current owner and seller of the property.
Which one of the following best sets out the Central Land Charges searches (Form K15) (‘CLC searches’) which the buyer’s solicitor should carry out pre-exchange?
CLC searches against: (1) Company A for the period 1926 – 1945; (2) Company B for the period 1945 – present date; (3) Company C for the period 2003 - present date.
None. These are pre-completion searches.
CLC searches against: (1) Company A for the period 1926 – 1945; (2) Company B for the period 1945 – 2003; (3) Company C for the period 2003 – present date.
CLC searches against: (1) Company A for the period 1926 –present date; (2) Company B for the period 1926 – present date; (3) Company C for the period 1926 – present date.
CLC searches against: (1) Company A for the period 1925 – 1945; (2) Company B for the period 1945 – 2003; (3) Company C for the period 1945 – 2003.
CLC searches against: (1) Company A for the period 1926 – 1945; (2) Company B for the period 1945 – 2003; (3) Company C for the period 2003 – present date.
Correct. CLC searches are carried out against previous owners of the property for their periods of ownership.
You would need a CLC search against Company A. As you don’t know when they bought the property, you would carry out the search from 1926, the year when the CLC register was started. However, you do know that Company A sold the property in 1945, so you only need search up to then.
The CLC search against Company B will be for the period 1945 to 2003, as you know that this is the period that they owned it.
The CLC search against Company C will be for the period of their ownership, being 2003 to the current year.
Note that the searches against companies A and B can be relied upon whenever they are dated, so if the seller’s solicitor provides them, the buyer’s solicitor need not carry out fresh searches. However, the search against Company C will need to be carried out again just before completion to confer priority.
You are acting for the buyers of a property. The seller is Mark Arthur. The seller’s solicitor tells you that Philip Arthur recently died. You review the official copies, which contain the following entry:
Proprietor(s): PHILIP ARTHUR and MARK ARTHUR of 35 Yewdale Road, Leeds, LS3 8QP
RESTRICTION: no disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.
Which one of the following statements best explains what you need to do in respect of this entry in the Proprietorship Register?
You need to ensure another trustee is appointed to pay the purchase money to so the restriction will not apply.
You need to see a certified copy of the death certificate and then Mark Arthur can sell as a sole proprietor.
You do not need to do anything as Philip Arthur has died so the restriction is no longer relevant.
You do not need to do anything, this is for the seller’s solicitors to deal with.
You do not need to do anything, the right of survivorship will apply so Mark Arthur can sell as a sole proprietor.
You need to ensure another trustee is appointed to pay the purchase money to so the restriction will not apply.
Correct
This is correct. This restriction tells us Mark and Philip are beneficial tenants in common and prevents a sale by a sole owner. This means a sale by Mark alone is not permitted and would not be registered by the Land Registry. A second trustee needs to be appointed in order to comply with the restriction. This will overreach Philip’s beneficial interest, which will have passed under his estate because the right of survivorship will not have applied on his death.
Your firm is investigating title on behalf of a client who is buying a commercial property. The seller’s solicitor has deduced title. There is a restrictive covenant in the Charges Register of the Official Copies for the Property not to make any alterations to the property. In the CPSE Replies the seller admits that they have breached this restrictive covenant by building an extension to the rear of the property. There is no indemnity covenant in the Proprietorship Register.
Which one of the following options is the best advice for your client?
Restrictive covenants do not bind successors in title unless there is an indemnity covenant on the Proprietorship Register.
Restrictive covenants do not bind successors in title so no further action is required.
Restrictive covenants bind successors in title so the seller should obtain restrictive covenant insurance to cover liability for breach of covenant.
Restrictive covenants bind successors in title so the buyer should obtain restrictive covenant insurance to cover liability for breach of covenant.
Your client should not proceed with the purchase as the title is defective.
Restrictive covenants bind successors in title so the seller should obtain restrictive covenant insurance to cover liability for breach of covenant.
Correct. The burden of restrictive covenants bind successors in title as long as they are correctly registered, which is likely, as the restrictive covenant referred to is in the Charges Register of the Official Copies. As restrictive covenants run with the land and bind successors in title, they do not require an indemnity covenant in the Proprietorship Register to make them binding unlike a positive covenant.The seller has breached this restrictive covenant, and as a past breach it is the seller who is responsible for obtaining restrictive covenant insurance. While the other answer options might sound plausible, they are each incorrect. Note also that a firm of solicitors cannot arrange an insurance policy under section 19(1) FSMA 2000 unless they are authorised or exempt.
You act for a client company who is buying a piece of registered, undeveloped land that only has access to adopted highway via a private right of way. The burden of the right of way is registered against the registered title of the servient land. The wording of the right is as follows: “… to pass and repass with or without motorcars over the lane coloured blue …”
The lane coloured blue is just large enough to allow one car at a time to drive along it. The client intends to develop the land as an office for the client’s business with just two car parking spaces for the company directors.
Is the right likely to be sufficient for the client’s plans for the property?
No. It is neither legally sufficient nor physically adequate.
Yes. It is legally sufficient and physically adequate.
No. It is not legally sufficient, but it is physically adequate.
No. It is legally sufficient, but not physically adequate.
Yes. It is legally sufficient and physically adequate. However, the right should additionally be checked on the CON29 replies.
No. It is neither legally sufficient nor physically adequate.
Correct. Although the lane may be sufficient for the ultimate intended use of the property, it will not be sufficient for the construction of the office. Construction requires heavy vehicles such as dumper trucks and cement mixers. They will not be able to access the site due to both the physical and legal constraints of the right of way.
You are acting for the buyer of a residential house on a plot of registered freehold land which is part of a new development so the buyer is buying part of a larger plot. The buyer has agreed to enter into the following covenants: (1) “not to use the Property for anything other than a private residence” and (2) “to erect and hereafter maintain a fence of no less than 2 metres in height along the northern and western boundaries of the Property”.
What types of covenants are these and on which of the registers at Land Registry for the title to the Property would you expect to see the two covenants registered?
(1) is a restrictive covenant and (2) is a positive covenant and only (1) would be registered on the Charges Register.
(1) is a positive covenant and (2) is a restrictive covenant and both would be registered on the Proprietorship Register.
1) is a restrictive covenant and (2) is a positive covenant and both would be registered on the Charges Register.
(1) and (2) are both restrictive covenants and both would be registered on the Charges Register.
(1) and (2) are both positive covenants and would be registered on the Charges Register.
1) is a restrictive covenant and (2) is a positive covenant and both would be registered on the Charges Register.
Correct. Both restrictive and positive covenants are registered on the Charges register at the Land Registry. The Proprietorship Register deals with restrictions on the owner of the land’s ability to deal with it rather than restrictions over the land.
Restrictive covenants are contracts entered into between the covenantor (the owner of the burdened land) and the covenantee (the owner of the land taking the benefit) which restrict the right of the covenantor and their successors in title to freely use the burdened land eg a restrictive covenant not to use the property for anything other than a dwelling house. The covenant could be worded positively but still be a restrictive covenant eg a covenant to use the property only as a residential dwelling.
Positive covenants are contracts entered into between the covenantor (the owner of the burdened land) and the covenantee (the owner of the land taking the benefit) which require the covenantor to do something with / on / to the property e.g. to build and maintain a fence along the boundary of the property. The covenant could be worded restrictively but still be a positive covenant e.g. not to allow the boundary fence to fall into disrepair.
An aid to working out whether a covenant is restrictive or positive (regardless of whether it is worded negatively or positively) is the ‘hand in the pocket test’. If you have to ‘put your hand in your pocket’ i.e. pay out money to comply with the covenant then it is a positive covenant (one obliging you to do something).
You act for a client who is buying a freehold restaurant for cash (not a mortgage) from a family member. The client instructs you not to carry out searches.
Which of these is your best option ?
A -Decline to act for the client as you cannot act in their best interests.
B. Advise your client as to the risks of not carrying out searches, and ensure that they understand before you proceed.
C. Agree that searches are unnecessary in a transaction between family members.
D. Agree that searches are unnecessary for a restaurant, but you or your client should as a minimum check that the property is registered as a food business.
E. Advise your client that as they are commercially minded, you will remove the section on searches in your report on title.
B. Advise your client as to the risks of not carrying out searches, and ensure that they understand before you proceed.
but finish choices from w3 collaborate
You act for a client buying a piece of land for redevelopment
Which of these matters will be revealed by your desktop environmental search?
A - previous planning applications
B - a conclusive report whether the land is contaminated or not
C - whether the mand is subject to right of common
D - flooding risk based on historic and other publicly available date
E - the energy efficiency of any buildings on the land
D - flooding risk based on historic and other publicly available date
A solicitor is acting for a client who is the sole owner of a freehold property. The property is not a listed building and is vacant, but was used as office premises until five years ago. The client plans to carry out internal works to the property so that she can let it as a single private dwelling house. She has asked for the solicitor’s advice about whether her plans constitute ‘development’ and therefore whether she will need to obtain planning permission.
Will the client require planning permission for her plans for the property?
A. Yes, although she will not require planning permission for the internal works, she will require planning permission for the change of use.
B. No, the internal works do not constitute development and nor does the change of use because the previous use was abandoned over four years ago.
C. No, the internal works do not constitute development and nor does the change of use because it is a change to a single private dwelling house.
D. Yes, she will require planning permission for both the internal works and the change of use because they are developments which are not permitted.
E. No, the internal works do not constitute development and nor does the change of use because the change is not material.
A. Yes, although she will not require planning permission for the internal works, she will require planning permission for the change of use.
You are acting for a couple buying a house. Replies to enquiries show that the loft was converted from storage to an additional bedroom four years ago. Your local search shows that no building regulations approvals have been obtained.
What should you do?
A. You should advise that indemnity insurance be taken out against the risk of enforcement, and that the loft conversion may not be safe to use if it doesn’t comply with building regulations.
B. You should advise that indemnity insurance be taken out against the risk of enforcement, but that no other action is necessary.
C. You can advise your clients that this is not an issue, as the local authority’s period for enforcement has expired, but the loft conversion may not be safe to use if it doesn’t comply with building regulations.
D. You can advise your clients that this is not an issue, as the conversion falls within the General Permitted Development Order 2015.
E. You should advise your clients to apply to court for a declaration that the works are in compliance with building regulations to prevent the risk of an injunction.
You should advise that indemnity insurance be taken out against the risk of enforcement, and that the loft conversion may not be safe to use if it doesn’t comply with building regulations.
Imagine last year Proporation Limited built a patio and porch along the full width of the rear of the Property and did not obtain the requisite planning permission. Which of the following statements best sets out NHL’s potential liability if it buys the Property without planning permission being in place?
NHL will have no liability as it did not carry out the works.
The local authority has four years from the date of substantial completion of the patio and porch to take enforcement action against NHL.
The local authority can serve a breach of condition notice against NHL because it is a condition of lawful development that planning permission is obtained before development takes place.
The local authority can serve an enforcement notice on NHL requiring it to pay a fine of up to £20,000.
The local authority can serve a stop notice on NHL requiring it to stop the ongoing breach and demolish the patio and porch.
The local authority has four years from the date of substantial completion of the patio and porch to take enforcement action against NHL.
Correct.
You act for a landlord client who has received a planning enforcement notice from the local authority. The landlord owns a commercial unit (‘Premises’) and five years ago, finished converting the Premises from a storage centre to a wine bar. The enforcement notice claims the landlord’s conversion works were carried out without planning permission and the material change of use wasn’t authorised under permitted development rights.
Which of the following best describes the advice you would give to the landlord regarding the enforcement periods for the two alleged breaches of planning law?
The local authority is unable to enforce against the landlord for lack of planning permission for both the works and material change of use because service of the enforcement notice is defective – the notice should have been sent to the tenant of the Premises instead of to the landlord.
The local authority is out of time to enforce against the landlord for the lack of planning permission for the building work but they are within the time limit to enforce for the unauthorised change of use.
The local authority can enforce against the landlord for carrying out works without planning permission because the works were carried out to effect the change of use and the time limit for changing use without authorisation is still running.
The local authority is unable to enforce against the landlord for either breach because they have allowed the wine bar to trade for the past five years without issuing a complaint.
The local authority is out of time to enforce against the landlord for the lack of planning permission for both the works and change of use because more than four years have passed since the works and change of use were completed.
The local authority is out of time to enforce against the landlord for the lack of planning permission for the building work but they are within the time limit to enforce for the unauthorised change of use.
Correct. This answer reflects the enforcement periods for lack of planning permission for works (four years) compared to lack of planning permission for a material change of use (ten years).
The local authority is out of time to enforce against the landlord for the lack of planning permission for both the works and change of use because more than four years have passed since the works and change of use were completed.
Incorrect
Incorrect. Please review your materials on how long a local authority has to enforce for a lack of planning permission for both works and a material change of use, when neither breach was deliberately concealed.
You act for the buyer of a freehold property. The preliminary information provided by your client indicates the property does not directly abut the public highway but access to the public highway is over a track (the Track) that crosses a neighbouring farm.
Which pre-contract search or enquiry would provide you with a definitive position as to whether the Track abuts the public highway?
CON 29 Enquiries of Local Authority
Pre-Contract Enquiries (CPSEs)
Physical inspection / site visit
Optional enquiries of the Local Authority (CON 29O)
Highways Search
Highways Search
Correct
This is correct. The primary reason for carrying out a Highways Search is to ensure that the boundary of the property abuts a public highway. The result of a Highways Search would include a plan, showing exactly where the public highway ends and the Track begins.
The CON 29 tells you whether there are roads in the vicinity of the property which are adopted/public.
Replies to CPSE enquires are given by the seller and would not be definitive on this issue.
A site visit would not provide the definitive confirmation required.
You have recently been instructed to act for a buyer on the purchase of an industrial unit. The seller built a large extension to the rear of the unit in September 2008. The seller’s solicitor has sent you the replies to CPSEs and you note that the seller did not obtain building regulations approval for the extension.
Is this a problem for the buyer?
No as the building works were carried out over four years ago and therefore are outside the local authority’s enforcement period re: the lack of building regulations approval.
Yes as there is no time limit for enforcement re: the lack of building regulations approval by the local authority.
No as the seller was responsible for the building works in 2008 it will not become a problem for the buyer.
No as the building works were carried out over ten years ago and therefore are outside the local authority’s enforcement period re: the lack of building regulations approval.
Yes as you would need to check the building regulations approval conditions as if breached there is a ten year enforcement period by the local authority starting from the date of the breach of condition.
Yes as there is no time limit for enforcement re: the lack of building regulations approval by the local authority.
Correct. The local authority can apply to court to enforce the building regulations by injunction at any time. While the other answer options might sound plausible, they are each incorrect.
Breach of conditions apply to planning permission only.
The four year enforcement period related to planning permissions.
The ten year enforcement period related to planning permissions.
The liability for lack of building regulations approval will pass to the buyer on completion.
incorrect
Yes as you would need to check the building regulations approval conditions as if breached there is a ten year enforcement period by the local authority starting from the date of the breach of condition.
Incorrect
Incorrect. Breach of conditions apply to planning permission only. Review your materials on enforcement periods for planning permission and building regulations.
No as the building works were carried out over ten years ago and therefore are outside the local authority’s enforcement period re: the lack of building regulations approval.
Incorrect
Incorrect. This enforcement period related to planning permissions. Review your materials on enforcement periods for planning permissions and building regulations.
No as the seller was responsible for the building works in 2008 it will not become a problem for the buyer.
Incorrect. The liability for lack of building regulations approval will pass to the buyer on completion. Review your materials on enforcement periods for planning permissions and building regulations.
A planning officer for a local authority has become aware of a potential planning issue. Five years ago, a commercial property within the local area has been redeveloped into a single residential property without obtaining any planning permissions.
Which of the following options should the planning officer take for this breach of planning control?
There is nothing he can do as the planning contravention is outside the enforcement period from the date of the change of use.
Serve an Enforcement Notice on the proprietor as the planning contravention is within the enforcement period from the date of the change of use.
Nothing as the change of use is permitted as general development.
Serve an Enforcement Notice on the proprietor as the enforcement period for this change of use is unlimited.
Apply to court for an injunction to restore the property to its lawful use.
There is nothing he can do as the planning contravention is outside the enforcement period from the date of the change of use.
Correct
Correct. This change of use of a building to a single residential property has a four year enforcement period which has now expired. While the other options appear plausible they are not. This change of use of a building to a single residential property has a four year enforcement period which has now expired. The enforcement period for change of use is not unlimited. An injunction applies mainly to lack of building regulations. This is not a permitted development.
You are acting for the purchaser of a registered commercial freehold property and in order to complete the report on title for the client you need to locate information from the searches about the following issues:
- Whether the property is a listed building
- Whether a contaminated land notice has been served.
- Building regulations previously granted.
- Flooding risk
- Whether the boundary fence needs repair.
Which of the following options best describes the searches and/or enquiries you would use to obtain the information needed?
LLC1 search; CON29 search; waterways search and Commercial Property Standard Enquiries.
LLC1 search; CON29 search; environmental desktop search and Commercial Property Standard Enquiries.
CON29 search and waterways search.
CON29 search; environmental desktop search and Commercial Property Standard Enquiries.
LLC1 search; CON29 search and environmental desktop search.
LLC1 search; CON29 search; environmental desktop search and Commercial Property Standard Enquiries.
This is correct. Whether the property is listed will appear in the LLC1. Contaminated land notices and building regulations approval are only detailed in the CON29. Flooding risk appears in the environmental desktop search and the seller will confirm in the CPSEs whether the fence needs repairing.
LLC1 search; CON29 search and environmental desktop search.
Incorrect
This is incorrect. The seller will confirm in the CPSEs whether the fence needs repairing.
You act for a client who intends to buy a registered freehold in the countryside. The client has asked you to look in the pre-contract papers to see whether a public footpath crosses the property.
Where would you normally expect to find the answer?
Search of the Index Map Result.
The Commons Registration Search Result.
The Property Register of the Official Copy.
The Local Authority Search Result.
The Local Land Charges Search Result.
The Local Authority Search Result.
Correct. There is a question to the local authority at enquiry 2.2 asking if there are any public right of ways (which would include footpaths) that abut or cross the property. While the other answer options might sound plausible, they are each incorrect. The Local Land Charges Search Result does not record details of footpaths, instead it records charges such as general and specific financial charges, planning charges, listed buildings charges, light obstruction notices. The Property Register of the Official Copy reveals rights benefiting the property such as private rights of way, not public footpaths. The Search of the Index Map Result reveals whether the area searched is registered or unregistered land, it does not detail any specific rights of way and indeed the Land Registry does not record public footpaths on its registers. The Commons Registration Search result (this is an optional enquiry in the Local Authority Search) will reveal whether the property is registered common land or town or village green under the Commons Registration Act 1965 or the Commons Act 2006.
Search of the Index Map Result.
Incorrect. Please review your materials on the purpose of pre-contract searches and search results.
A solicitor is acting for the buyer of a property. A river flows through the grounds of the property. Within its replies to pre-contract enquiries, the seller has stated that during its period of ownership of the property, there have not been any instances of flooding of the property itself, but on three separate occasions there has been serious flooding of a local village.
Which one of the following pre-contract searches should the buyer’s solicitor review to investigate the potential risk of flooding to the property?
The solicitor should review the Waterways Search.
The solicitor should review the Desktop Environmental Search.
The solicitor should review the Local Land Charges (LLC1) Search.
The solicitor should review the Drainage and Water Search.
The solicitor should review the results of the Enquiries of the Local Authority (CON 29).
The solicitor should review the Desktop Environmental Search.
Correct. The Desktop Environmental Search will confirm if the property is likely to flood (in addition to confirming if the property has ever been used for a contaminative use). While the other answer options might sound plausible, they are each incorrect. The Waterways Search will reveal a wide range of information in relation to the river running through the grounds of the property, including who has liability for the maintenance of the river banks, whether there are any rights of way along the river banks, whether there are any drainage or fishing rights and whether there are any water abstraction licences in place. It will not, however, reveal any information regarding the flood risk. The Drainage and Water Search checks matters such as whether foul and surface water from the property drain to a public sewer and whether the property is connected to a mains water supply. It does not contain any information relating to the flood risk. The Local Land Charges (LLC1) Search will reveal a number of matters regarding the surrounding area and the local environment such as planning permissions that have been granted, other planning matters such as Enforcement or Stop Notices, tree preservation orders, smoke control orders, financial charges such as road-making charges and whether the area is a Conservation Area. There is, however, no information within the LLC1 relating to the flood risk. The Enquiries of the Local Authority (CON 29) results will similarly reveal a large amount of information concerning the surrounding area such as further planning information, the status of roads in the vicinity of the property and whether there are any public rights of way affecting the property. They will again, however, not provide any information relating to the flood risk.
Which of the following statements correctly describes the purpose of a certificate of title?
It confirms to the recipient matters relating to the property through a series of statements of facts and disclosures
It sets out the terms of the security deed that the recipient is entering into.
It confirms that the security over the property is valid and enforceable.
It sets out the risks and issues relating to the property and provides advice and opinions on those risks/issues.
The certificate is a guarantee of a clear and good title to a property.
It confirms to the recipient matters relating to the property through a series of statements of facts and disclosures
This is correct. It confirms to the recipient matters relating to the property through a series of statements of facts and disclosures. It is not a report on the security deed (eg charge by way of legal mortgage) being valid and enforceable.
A company is buying a registered freehold property in England with funding from a corporate lending bank secured on the property with a first legal charge. The company’s solicitor is required to submit to the lender’s solicitor a CLLS Certificate of Title (COT) as a condition precedent to receiving the funding.
When should the company’s solicitor receive confirmation from the lender’s solicitor that the draft COT is approved?
At completion.
Before exchange of contracts.
A couple of hours before completion.
A week before completion.
Before exchange of contracts.
Correct
Correct. A buyer’s solicitor should not exchange contracts unless the source of funds is confirmed. Exchanging without confirmation means the lender could have issues with the property and then not want to lend, leaving the buyer contracted to buy without access to the main source of funds. There would be financial penalties under the contract if the buyer did not complete.
Match the lending document to the description: Mortgage offer, Legal charge, Facility letter, Certificate of title
The deed that creates the security interest and is registered at the Land Registry.
The commercial equivalent of a mortgage offer.
This will set out the terms and conditions of the loan.
A document in which a solicitor certifies that the title to the property is satisfactory for lending purposes.
A formal offer by the lender to lend. It is subject to the lender being satisfied with the transaction and the security (ie, the property) and will set out the terms and conditions of the loan.
The deed that creates the security interest and is registered at the Land Registry. –Legal charge
The commercial equivalent of a mortgage offer.
This will set out the terms and conditions of the loan. – Facility letter
A document in which a solicitor certifies that the title to the property is satisfactory for lending purposes. – Certificate of title
A formal offer by the lender to lend. It is subject to the lender being satisfied with the transaction and the security (ie, the property) and will set out the terms and conditions of the loan. – Mortgage offer
Which one of the following correctly describes section 2 of the Law of Property (Miscellaneous Provisions) Act 1989?
Contracts for the sale of land must be in writing and all the relevant terms must be incorporated into the contract.
The interest of a person in actual occupation will bind a purchase of the property.
Implies certain covenants or obligations on the part of the seller.
Contracts for the sale of land must be in writing and all the relevant terms must be incorporated into the contract.
Correct
Correct. This is indeed two of the requirements for a valid land contract. The contract will also need to be signed by, or on half of the parties to the contract.
Which one of the following will be expressly incorporated into a contract for the sale of land?
Law Society Conveyancing Protocol
Standard Conditions (either the Standards Conditions of Sale or the Standard Commercial Property Conditions)
Solicitor undertakings
Standard Conditions (either the Standards Conditions of Sale or the Standard Commercial Property Conditions)
Correct
Correct. The standard conditions will always be incorporated into a contract for the sale of land. They contain conditions that are common to all transactions and it is far easier to incorporate these by reference rather than write them all out again in the contract.
Your client is selling his home and you are about to start drafting the contract. Which ONE of the following contracts would you choose as a precedent?
A tailor made contract for sale incorporating the standard commercial property conditions and special conditions
A tailor made contract for sale incorporating the standard conditions of sale only.
A standard form contract for sale incorporating the standard commercial property conditions only.
A standard form contract for sale incorporating the standard conditions of sale and pre-printed special conditions.
A standard form contract for sale incorporating the standard conditions of sale and pre-printed special conditions.
Correct
Correct. It is usual for the solicitor to prepare the standard form contract for sale incorporating the standard conditions for sale for residential transactions and the pre-printed special conditions will be at the back page of the standard form contract. A tailor made contract is used mostly in commercial property transactions which this isn’t.
Which of the following statements correctly describes the role of special conditions in a property contract?
Special conditions are incorporated into both residential and commercial transactions though there are different conditions depending upon the nature of the transaction. Both conditions are updated from time to time to take account any changes in law.
Special conditions may be used in residential property contracts only to add to or amend the standard conditions
Special conditions may be used in commercial property contracts only to add to or amend the standard conditions
Special conditions may be used in both residential and commercial property contracts to add to or amend the standard conditions
Special conditions may be used in both residential and commercial property contracts to add to or amend the standard conditions
Correct
This is correct. The Standard Conditions of Sale may be amended, excluded or supplemented by ‘special conditions’. This applies in respect of both residential and commercial property transactions. Though, in respect of residential transactions, if the seller’s solicitor is following the Law Society Conveyancing Protocol, special conditions may only be added if ‘absolutely necessary for the purposes of the transaction’.
Which of the following will sell with limited title guarantee?
A seller who is the owner but has fully let the property out to a tenant.
A seller who is a mortgagee in possession
A seller who is the owner and occupier.
A seller who is a trustee
A seller who is a trustee
Correct
Correct. A trustee would usually give only a limited title guarantee.
If, immediately following exchange of contracts, the seller wishes to use the deposit payable by the buyer, the seller’s solicitor must ensure that the contract provides for the deposit to be held in which of the following capacities?
By the seller’s solicitor as agent for the seller’s estate agent.
By the seller’s solicitor as stakeholder.
By the seller’s solicitor as agent for the buyer.
By the seller’s solicitor as agent for the seller.
By the seller’s solicitor as agent for the seller.
Correct
Correct. Holding the deposit as agent for the seller means the money belongs to the seller and the seller is free to use it from exchange of contracts. If the deposit was held as stakeholder this means that the seller’s solicitor is custodian of the deposit for both parties: the deposit may not be released to the seller until completion.
A seller must disclose latent incumbrances and defects in title. Both the SCS and SCPC amend this duty. Match the description of what the seller must disclose to the set of conditions the duty is from (refer to SCS and SCPC if you need to):
The buyer is deemed to buy the property subject to any incumbrances which would be revealed by a prudent buyer’s searches and enquiries.
The seller needs to disclose any incumbrances (rights burdening the property that are not apparent on inspection) that are registered at the Land Registry (reg land), the Land Charges Registry (unreg land) and at Companies House.
The buyer is deemed to buy the property subject to any incumbrances which would be revealed by a prudent buyer’s searches and enquiries.
SCPC (used in commercial transactions)
The seller needs to disclose any incumbrances (rights burdening the property that are not apparent on inspection) that are registered at the Land Registry (reg land), the Land Charges Registry (unreg land) and at Companies House.
SCS (used in residential transactions)
Time is usually of the essence under both the SCS and the SCPC.
Is this statement true or false?
False
True
False
Correct
Correct. Both SCS and SCPC state that ‘time is NOT of the essence until a notice to complete is served’. This means that if a party fails to complete, the non-defaulting party cannot not yet walk away from the transaction.
What is the time for completion under both the SCS and the SCPC?
2pm
Correct
This is correct. The time for completion under both SCS and SCPC is 2pm. For the buyer’s solicitor this means that the money must be received by the seller’s solicitor before 2pm.
Your client is buying a house from a man who is an owner and an occupier of the house. Your review of the official copies reveals the registered proprietors as the man and woman who hold the property as tenants in common. You have been informed that the woman has died. Which ONE of the following would you include in the contract?
The man is to transfer the property with limited title guarantee in the transfer deed and appoint a second trustee who will give full title guarantee in the transfer deed.
The man is to transfer the property with full title guarantee.
The man is to transfer the property with limited title guarantee
The man is to transfer the property with full title guarantee and agrees to appoint a second trustee who will give limited title guarantee in the transfer deed.
The man is to transfer the property with full title guarantee and agrees to appoint a second trustee who will give limited title guarantee in the transfer deed.
Correct
Correct. A buyer from a sole surviving tenant in common would be expecting a title guarantee from both the surviving tenant in common AND from the second trustee appointed to overreach any beneficial interest in the property. However, the second trustee is often not appointed until completion. The sole surviving tenant in common will be named as the ‘Seller’ in the contract and will agree (by way of a special condition) to appoint the second trustee on completion. A trustee will usually agree only to give limited title guarantee as it has limited knowledge of the property.
You are acting for the buyer of a residential property. In the replies to enquiries, the seller disclosed that their adult child occupiers the property with them.
Which pre-written special condition would you expect to be included in the contract in light of this?
The property is sold with vacant possession - this should be included to include the details of the adult son in occupation
Title guarantee - this should be included so that the title guarantee given by the seller is varied from full to limited
This cannot be covered by a pre-written special condition. Rather, a tailor made special condition would need to be drafted
Occupier consent’s - the adult son should sign the contract to confirm they will vacate on or before completion
Occupier consent’s - the adult son should sign the contract to confirm they will vacate on or before completion
Correct
This is correct. The seller’s solicitor would need to obtain the signature of the adult child, who would need to be advised to seek independent legal advice.
A buyer and seller have agreed that the washing machine and dryer (not integrated)should be included in the sale of a property.
How should the buyer ensure this is documented in the contract?
The buyer should ensure pre-written special condition 3(a) is included and attach a list of any other fittings/chattels that are agreed the buyer will purchase
The buyer should ensure a tailor made special condition is drafted and included in the contract documenting the fittings/chattels the buyer would like including in the sale.
The buyer does not need to do anything as the standard conditions of sale include a condition that all fittings /chattels will pass automatically to the buyer on completion of the sale
The buyer does not need to do anything as all fittings/chattels will pass automatically to the buyer on completion of the sale
The buyer does not need to do anything as all fixtures will pass automatically to the buyer on completion of the sale
The buyer should ensure pre-written special condition 3(a) is included and attach a list of any other fittings/chattels that are agreed the buyer will purchase
Correct
Correct. The washing machine and dryer are not fixtures and will not therefore pass automatically to the buyer on a purchase. Fittings / chattels that the buyer would like including need to be expressly included in the contract. In a residential contract there is a pre-written special condition that allows the parties to specify any fittings / chattels (also called contents) that are to be included in the sale and any fixtures which are to be excluded.
A five year old commercial property is being sold. The seller has not opted to tax. The seller is drafting the contract, which includes the SCPC.
Which one of the following correctly sets out the contractual VAT provision(s) required and the reason why? (Refer to the text of SCPC if you need to.)
SCPC 2 is incorporated in the contract and the purchase price should state it is exclusive of VAT because VAT is chargeable on the sale.
SCPC 2 is incorporated in the contract because VAT is not chargeable on the sale.
SCPC special condition A1 should be expressly incorporated and the purchase price should state it is exclusive of VAT because VAT is chargeable on the sale.
SCPC special condition A1 should be expressly incorporated because VAT is not chargeable on the sale.
SCPC special condition A1 should be expressly incorporated because VAT is not chargeable on the sale.
Correct
Correct. The sale of an old commercial property where the seller has not opted to tax is not chargeable to VAT. SCPC special condition A1 is the relevant provision to incorporate to reflect the position that VAT is not payable in the contract.
The draft sale contract for a commercial property incorporates the SCPC, including SCPC 2. Special Condition A1 from the SCPC is not incorporated in the draft contract.
Which one of the following most accurately sets out the implication of this drafting and the reason(s) why the contract would have been drafted this way? (Refer to the text of SCPC if you need to.)
VAT is not chargeable on the sale of the property. The property is an old (more than 3 years old) commercial property with no option to tax.
VAT is chargeable on the sale of the property. The property is an old (more than 3 years old) commercial property with no option to tax.
VAT is chargeable on the sale of the property. The property is either a new (up to 3 years old) commercial property or an old (more than 3 years old) commercial property with an option to tax.
VAT is not chargeable on the sale of the property. The property is either a new (up to 3 years old) commercial property or an old (more than 3 years old) commercial property with an option to tax.
VAT is chargeable on the sale of the property. The property is either a new (up to 3 years old) commercial property or an old (more than 3 years old) commercial property with an option to tax.
Correct
Correct. SCPC 2 is the default position which is that VAT is chargeable on the sale of the property. The purchase price should state it is exclusive of VAT. The possible reasons why the sale of a commercial property would be chargeable to VAT are that it is a new commercial property or an old commercial property where the seller has made an option to tax.
In which one of the following situations is it most important for the purchase price in the sale contract to be expressly stated to be exclusive of VAT?
A residential property is being sold.
An old (more than 3 years old) commercial property is being sold. No option to tax the property has been made.
A new (up to 3 years old) commercial property is being sold.
A new (up to 3 years old) commercial property is being sold.
Correct
Correct. VAT is chargeable on the sale of a new (up to 3 years old) commercial property but the default position is that the purchase price is deemed to be VAT inclusive unless the contract states otherwise. If the purchase price was not expressly stated to be exclusive of VAT it will be deemed to be VAT inclusive. The seller will have to account for the VAT element out of the purchase price to HMRC and will be left only with the remainder.
What undertakings does a seller’s solicitor give when using Law Society Formula B to exchange contracts?
To discharge the seller’s mortgage.
To send the seller’s part of the contract to the buyer’s solicitor on receipt of the buyer’s part of the contract.
To send a client account cheque for the deposit to the buyer’s solicitor on that day.
To send the seller’s part of the contract to the buyer’s solicitor on that day.
To send the seller’s part of the contract to the buyer’s solicitor on that day.
Correct. You spotted the deposit is sent by the buyer’s solicitor to the seller’s solicitor and not the other way round.
Which one of the following steps is taken by the buyer’s solicitor pre-exchange of contracts where the buyer is purchasing with the aid of a mortgage?
Draft a certificate of title and send it to the lender.
Replying to enquiries.
Preparing engrossments of the final version of the contract.
Obtaining a redemption figure from the seller’s lender.
Draft a certificate of title and send it to the lender.
Correct
Correct. If the purchase is being funded with the aid of a mortgage the solicitor must draft a certificate of title and send it to the lender. If the lender is satisfied with the content of the certificate then the loan will be available to the buyer on the day of completion. There are different certificates of title for commercial and residential transactions. However in both cases it will set out the same type of information about the property as a report on title (ie that the title to the property is good and marketable and acceptable security for the lender)
What is the most common form of exchange of contracts?
By post, whereby the buyer’s solicitor sends his client’s part of the contract and the deposit cheque to the seller’s solicitor.
By telephone, whereby each solicitor has their client’s part of the contract and they agree to exchange during a telephone call.
In person, whereby the buyer’s solicitor attends the seller’s solicitor’s office.
By telephone, whereby each solicitor has their client’s part of the contract and they agree to exchange during a telephone call.
Correct
Correct. This is the most common method of exchanging contracts.
You act for a client who has just decided to invest in commercial property and is buying a site for development. The funder is represented by their own solicitor, who has requested you provide a certificate of title in the form of the City of London Law Society’s precedent. To save costs, your client tells you not to bother with a report on title, but just to send a copy of the certificate of title.
How should you deal with your client’s request?
A. You cannot comply with this instruction because the certificate of title is confidential to the lender for whom it is prepared.
B. Your client can see a copy of the certificate of title, but it is designed for a specific purpose and you should stress that your report on title would be more useful to your client.
C. You would need the consent of the lender’s solicitor, as it was prepared for the lender, not your client.
D. Your client can see the copy certificate of title, but it is incomplete as certificates of title may exclude items that can deter the lender from lending.
E. You can retitle the certificate a report on title, delete the statements and use the exceptions as the body of the report.
Your client can see a copy of the certificate of title, but it is designed for a specific purpose and you should stress that your report on title would be more useful to your client.
You act for the buyer of a freehold property registered with Title Absolute. The contract for the sale of the property states that it is sold with limited title guarantee. You raise this with your client, who asks whether it matters.
How would you advise your client?
A. Limited title guarantee means that the seller takes no responsible for any matter that is not in the Land Registry official copies.
B. Limited title guarantee means that the seller covenants that no third party rights have been created over the period of the seller’s ownership.
C. Limited title guarantee means that the seller covenants that no third party rights have been created except those apparent from the title.
D. Limited title guarantee means that the seller covenants only to the buyer and not to the buyer’s lender or successors in title.
E. Limited title guarantee should not be an issue, as the Land Registry has given title guarantee in the form of Title Absolute.
B. Limited title guarantee means that the seller covenants that no third party rights have been created over the period of the seller’s ownership.
You act for a seller, and just before exchange, the buyer’s solicitor tells you for the first time that the buyer can only pay a 5% deposit. The seller has a related purchase.
How should you proceed?
A. Check that the 5% deposit will be sufficient for the deposit on the related purchase. If so, write in the 5% deposit on the front page of the contract on exchange. If the buyer fails to complete, then they will have to make up the deposit to 10%.
B. Advise the buyer’s solicitor that a 5% deposit is unacceptable, and if the buyer cannot make up the deposit to 10%, they must return the contract papers.
C. Amend the deposit to 5% on the front page, and also amend the standard conditions so that the 10% deposit is not triggered by a failure to complete.
D. Ask the seller whether they are willing to accept a reduced deposit, and advise of the risks, and if necessary advise the solicitor acting on the seller’s purchase of any reduction to that deposit.
E. Advise the seller’s solicitor on the related purchase that a 5% deposit will be given.
Ask the seller whether they are willing to accept a reduced deposit, and advise of the risks, and if necessary advise the solicitor acting on the seller’s purchase of any reduction to that deposit.
You act for the buyer of a freehold property registered with Title Absolute. The contract for the sale of the property says the seller is going to sell with limited title guarantee. You explain to your client that it is usual for this type of seller to offer a full title guarantee. Your client asks you what it means for them to getting limited title guarantee. What would your advice to the client be?
Selling with limited title guarantee means the seller is selling the property free from all charges and incumbrances (monetary or otherwise) and free from all rights exercisable by third parties, including those the seller does not and could not reasonably know about.
Selling with limited title guarantee means the seller covenants that the seller is not aware of any rights having been granted over the property during the period of the seller’s ownership, but the seller doesn’t make any covenant about rights before that.
Selling with limited title guarantee means the guarantee is limited in time to the period for which the buyer owns the property.
Selling with limited title guarantee means the seller is selling the property free from all charges and incumbrances (monetary or otherwise) and free from all rights exercisable by third parties, other than those the seller does not and could not reasonably know about.
The client does not need to be concerned about obtaining limited title guarantee as the property has been registered with Title Absolute.
Selling with limited title guarantee means the seller covenants that the seller is not aware of any rights having been granted over the property during the period of the seller’s ownership, but the seller doesn’t make any covenant about rights before that.
Correct
Correct. The key difference of limited title guarantee from full title guarantee is that the seller is only guaranteeing what has occurred at the property during the seller’s ownership. Note that if the seller inherited or was given the property, then this period extends to the last transaction for value (ie, sale).
incorrect
Selling with limited title guarantee means the guarantee is limited in time to the period for which the buyer owns the property.
Incorrect
Incorrect. There is nothing in the statute which says this. A covenant in English law binds for life.
Selling with limited title guarantee means the seller is selling the property free from all charges and incumbrances (monetary or otherwise) and free from all rights exercisable by third parties, including those the seller does not and could not reasonably know about.
Incorrect
Incorrect. This looks like the definition of full title guarantee, but goes further as it refers to matters the seller does not and could not know about, which the title guarantee does not cover.
You are acting for a buyer client who is purchasing a property which is subject to a mortgage. You exchanged over the telephone with the seller’s solicitor in accordance with Law Society Formula B.
Which statement best describes the undertaking or combination of undertakings the seller’s solicitor would have given to you?
To forward the seller’s part of the contract to you and to send the deposit to the lender to discharge the mortgage.
To forward the seller’s part of the contract to you and transfer the deposit to your client account.
To forward the seller’s part of the contract to you and to send the deposit to the lender to discharge the mortgage and to forward proof of discharge to you on receipt.
To forward the seller’s part of the contract to you by DX this evening.
To forward the seller’s part of the contract to you and to keep the deposit in general client account.
To forward the seller’s part of the contract to you by DX this evening.
Correct
Correct. As you are acting for a buyer client, in accordance with Formula B you would have received an undertaking confirming that the seller’s solicitor would send the seller’s part of the contract to you by DX this evening. The outstanding mortgage will be dealt with at completion.
To forward the seller’s part of the contract to you and to send the deposit to the lender to discharge the mortgage and to forward proof of discharge to you on receipt.
Incorrect
Incorrect. Please review your notes on the procedure for exchange on a property purchase. You need to understand at what stage of the transaction an existing mortgage would get discharged.
A solicitor has just been instructed by a client in connection with the purchase of a commercial property. The solicitor has just received the draft contract, official copies and replies to CPSEs. The buyer’s instructions are that repairs are required to the roof at the property, and that the seller has promised to carry out these repairs prior to the completion date.
Which one of the following best represents the steps that the buyer’s solicitor must now take in connection with the contract?
The buyer’s solicitor should draft a special condition for insertion in the contract specifying that on or before the completion date the seller must repair the roof of the property to the reasonable satisfaction of the buyer.
The special condition is not required as the SCPC confirms that the property is sold in the state it is in at the date of the agreement between the parties.
The buyer’s solicitor should draft a special condition for insertion in the contract specifying that the seller must repair the roof.
There is no need for a special condition as the verbal agreement of the seller is sufficient.
A special condition would not be required, as the seller is obliged to transfer the property in good repair.
The buyer’s solicitor should draft a special condition for insertion in the contract specifying that on or before the completion date the seller must repair the roof of the property to the reasonable satisfaction of the buyer.
Correct
This is correct. Special conditions are required to deal with specific matters agreed between the parties. Caveat emptor would mean that in the absence of a special condition, the responsibility for the repairs would fall to the buyer. s2 Law of Property (Miscellaneous Provisions) Act 1989 states that all the terms agreed between the parties must be incorporated in the contract, so the seller’s promise to repair the roof would not be binding without being in the contract.
A contract for sale of an industrial unit incorporates the standard commercial property conditions (‘SCPCs’) and there are no express clauses in the contract varying the standard conditions. Contracts have exchanged and the contractual completion date is next week. Yesterday the unit caught fire and has been practically destroyed.
Which one of the following statements is correct about who assumes risk under the contract from exchange of contracts?
The buyer bears the risk at exchange and if it does not have insurance cover it will not be obliged to complete the purchase on the contractual completion date.
The seller keeps the risk in the property and the buyer does not need to complete the purchase on the contractual completion date.
The common law position prevails, meaning that the seller keeps the risk from exchange.
The seller is under no obligation to insure the property; the common law position prevails, meaning that the buyer bears the risk at exchange.
The seller and the buyer are both under an obligation to insure the property and must both claim on their insurance policies.
The seller is under no obligation to insure the property; the common law position prevails, meaning that the buyer bears the risk at exchange.
Correct
This is correct. Since there is no variation to the SCPCs in the contract, under condition 8.1 of the SCPC, risk in the property passes to the buyer on exchange of contracts under common law (even without an express provision). The buyer should therefore be able to claim on its insurance for the damage. If for some reason the buyer does not have insurance cover, it will have to bear its own loss for the damage resulting from the fire and it will be obliged to complete the purchase on the contractual completion date.
incorrect
The buyer bears the risk at exchange and if it does not have insurance cover it will not be obliged to complete the purchase on the contractual completion date.
Incorrect
This is incorrect. Please review your materials on the key conditions contained in the SCPCs, in particular condition 8.1.
You act for the seller of a newly constructed commercial property, and have been instructed to issue a draft contract.
Which of the following describes the best basis for drafting the contract?
A contract incorporating the Standard Conditions of Sale and a special condition dealing with the VAT treatment.
You should first ascertain from replies to CPSE1 whether the seller has opted to tax the property.
A contract incorporating the Standard Commercial Property Conditions, and including the Part 2 A2 conditions as it is a transfer of a going concern.
A contract incorporating the Standard Commercial Property Conditions, and including the Part 2 A1 conditions as it is not a taxable supply.
A contract incorporating the Standard Commercial Property Conditions, but not incorporating any of the Part 2 VAT provisions as it is a standard-rated supply.
A contract incorporating the Standard Commercial Property Conditions, but not incorporating any of the Part 2 VAT provisions as it is a standard-rated supply.
Correct
Correct. Newly constructed commercial property is standard rated, and the Standard Commercial Property Conditions will be most appropriate for this.
Which one of the following is the correct form of transfer for the purchase of the whole of an unregistered freehold estate?
Conveyance signed under hand.
TP1 executed by deed.
TR1 executed by deed.
TR1 signed under hand.
TR1 executed by deed.
Correct
Correct. Section 52 of the Law of Property Act 1925 states that to transfer the legal estate in land a transfer must be by deed. Although the land is unregistered, purchase will trigger compulsory first registration of the land and so the Land Registry’s Form TR1 will be used as the Transfer Deed.
A TP1 is used when only part of a registered title is being purchased.
As s 52 of the Law of Property Act 1925 states that to transfer the legal estate in land a transfer must be by deed, it cannot be signed under hand but needs the formality of being executed as a deed.
A TR1 is today being drafted for the purchase of the whole of a registered title. Which one of the following best describes what should be put in Panel 3 (date) when the TR1 is drafted?
The completion date specified in the contract (which has been exchanged).
The date of the contract (which has been exchanged).
Nothing. Panel 3 should be left blank until completion.
Todays’ date.
Nothing. Panel 3 should be left blank until completion.
Correct
Correct. The date in panel 3 is the date the TR1 is completed. It will be filled in by hand when the solicitors complete the purchase.
Panel 3 is only filled in by hand when the solicitors actually complete the purchase (when the completion monies are received). This should be on the completion date which was specified in the contract however may not be eg if completion is delayed.
The date in panel 3 is the date the TR1 is completed and not the date of the contract, which is the date of exchange.
The registered proprietors on the official copies of a property being sold are Mr and Mrs Smith. They are joint owners and hold as tenants in common. Mr Smith has died. Mrs Smith’s solicitor is acting as the second trustee and the appointment has been made in panel 11 of the TR1. The buyer of the property is a company which changed its name a year ago.
Which one of the following best describes the documents which will need to be sent to the Land Registry post-completion with the completed TR1?
The separate deed of appointment of the second trustee and the change of name certificate.
Mr Smith’s death certificate, the separate deed of appointment of the second trustee and the change of name certificate.
The change of name certificate.
Mr Smith’s death certificate and the change of name certificate.
Mr Smith’s death certificate.
Mr Smith’s death certificate.
Correct
Correct.
There is no separate deed of appointment to send as the second trustee was appointed in the TR1.
The buyer’s change of name certificate does not need to be sent as the Land Registry only need evidence if the name of the seller is different from the name of the registered proprietor they have on the register of title.
incorrect
Mr Smith’s death certificate, the separate deed of appointment of the second trustee and the change of name certificate.
Incorrect
Incorrect. Please review your materials on the Transfer Deed, in particular focusing on the notes on completing panel 4 in the TR1.
A company is selling a property to two individuals who intend to hold the property as tenants in unequal shares. Which one of the following would be the correct execution clause(s) to insert in panel 12 of the TR1?
Transferor:
Executed as a deed by [name of company]
acting by [a director and its secretary] [two directors]
Signature of Director: ……………
Signature of [Director] [Secretary]: ……
Transferee:
Signed as a deed by [full name of individual]
[signature]
In the presence of:…………[signature of witness]
[print in block capitals the full name and address of the witness]
Transferee:
Signed as a deed by [full name of individual]
[signature]
In the presence of:…………[signature of witness]
[print in block capitals the full name and address of the witness]
Transferor:
Executed as a deed by [name of company]
acting by [a director and its secretary] [two directors]
Signature of Director: ……………
Signature of [Director] [Secretary]: ……
Transferor:
Signed as a deed by [full name of individual]
[signature]
In the presence of:…………[signature of witness]
[print in block capitals the full name and address of the witness]
Transferor:
Executed as a deed by [name of company]
acting by [a director and its secretary] [two directors]
Signature of Director: ……………
Signature of [Director] [Secretary]: ……
Transferee:
Signed as a deed by [full name of individual]
[signature]
Transferee:
Signed as a deed by [full name of individual]
[signature]
Transferor:
Signed as a deed by [full name of individual]
[signature]
In the presence of:…………[signature of witness]
[print in block capitals the full name and address of the witness]
Transferor:
Signed as a deed by [full name of individual]
[signature]
In the presence of:…………[signature of witness]
[print in block capitals the full name and address of the witness]
Transferee:
Executed as a deed by [name of company]
acting by [a director and its secretary] [two directors]
Signature of Director: ……………
Signature of [Director] [Secretary]: ……
Transferor:
Executed as a deed by [name of company]
acting by [a director and its secretary] [two directors]
Signature of Director: ……………
Signature of [Director] [Secretary]: ……
Transferee:
Signed as a deed by [full name of individual]
[signature]
In the presence of:…………[signature of witness]
[print in block capitals the full name and address of the witness]
Transferee:
Signed as a deed by [full name of individual]
[signature]
In the presence of:…………[signature of witness]
[print in block capitals the full name and address of the witness]
Correct
Correct. Both the transferor (seller) and both of the transferees (buyers) must execute the TR1. The transferor must always execute the TR1 and the transferees must execute if panels 10 (a declaration of trust to be completed if there is more than one transferee) and/or 11 (additional provisions eg an indemnity covenant) of the TR1 have been completed. Here panel 10 would have been completed as there is more than one transferee. The execution clauses set out are the appropriate ones for a company transferor and individual transferees.
Which one of the following is the correct priority period provided by an OS1 search?
15 working days from the OS1 search result.
2 months from the OS1 search result.
30 days from the OS1 search result.
15 days from the OS1 search result.
30 working days from the OS1 search result.
30 working days from the OS1 search result.
Correct
Correct.
It is a common mistake to say the priority period of an OS1 is 30 days. It is actually 30 working days.
15 working days is the protection period given by a K15 Central Land Charges search.
2 months is the time period for first registration at the Land Registry (post completion of the purchase of unregistered land).
Two individuals are selling Unit 20, Crayford Business Park (“the Property”) to a company, which is buying the Property for cash (ie without the need for a mortgage). The Property is registered at the Land Registry. You act for the buyer. Which one of the following sets out the pre-completion searches you need to carry out?
OS1 search only.
Central Land Charges search K15 on the buyer and OS1 search.
Bankruptcy search K16 on the seller and OS1 search.
Bankruptcy search K16 on the seller, Company search on the buyer and OS1 search.
Company search on the buyer and OS1 search.
OS1 search only.
Correct
Correct.
As this is a registered property and your client is purchasing the whole of the title, a Form OS1 search will always be required.
A bankruptcy search is not required to be undertaken against any individual seller of registered land (any bankruptcy would appear on the register of title and therefore on the OS1 search result).
As this is not unregistered land, no Central Land Charges search (K15) is required either. Central Land Charges searches K15 are only relevant for unregistered land and would be carried out against the seller not the buyer to check for adverse entries and to give a protection period.
As no buyer’s lender is involved, there are no solvency searches needed against the buyer.
An individual seller is selling the whole of a registered freehold residential property to an individual buyer, who is buying the Property with the aid of a mortgage. You act for the buyer and their lender. Which one of the following statements is correct on these facts?
You do not need to carry out a solvency search in respect of the buyer.
You need to carry out a Form K16 bankruptcy search in respect of the seller.
Solvency searches are carried out at the Land Registry.
You need to carry out a Form K16 bankruptcy search in respect of the buyer.
You need to carry out a Form K16 bankruptcy search in respect of the buyer.
Correct
Correct.
The lender’s solicitors carry out solvency searches against the buyer. On this scenario, you act for the buyer’s lender so you must carry the appropriate solvency search against the buyer pre-completion. As the buyer is an individual, the appropriate solvency search is a K16 bankruptcy search.
If the seller is bankrupt it will appear on the OS1 search result and so no bankruptcy search is required in respect of the seller.
Companies House searches (in respect of companies) are carried out at Companies House to check solvency pre-completion. K16 bankruptcy searches or K15 CLC searches which include bankruptcy are both carried out at the Central Land Charges Department. None of the solvency searches are carried out at the Land Registry.
If the seller has a mortgage over the whole of a registered property being sold, which one of the following is recommended form of undertaking for the seller’s solicitor to provide in respect of the mortgage?
To undertake to pay the completion monies to the lender and to forward Form DS1 to the buyer’s solicitor as soon as the seller’s solicitor receives it from the lender.
To undertake forthwith to pay the lender the money required to redeem the mortgage and to forward the receipted mortgage immediately to the buyer’s solicitor.
To undertake forthwith to pay the lender the money required to redeem the mortgage and to forward Form DS1 immediately to the buyer’s solicitor.
To undertake to discharge the mortgage and to forward Form DS1 to the buyer’s solicitor as soon as the seller’s solicitor receives it from the lender.
To undertake forthwith to pay the lender the money required to redeem the mortgage and to forward Form DS1 to the buyer’s solicitor as soon as the seller’s solicitor receives it from the lender.
To undertake forthwith to pay the lender the money required to redeem the mortgage and to forward Form DS1 to the buyer’s solicitor as soon as the seller’s solicitor receives it from the lender.
Correct
Correct.
This is the Law Society’s recommended form of seller’s solicitor’s undertaking re: the seller’s mortgage / charge.
The seller’s solicitor is not able to discharge the mortgage as only the seller’s lender can do that.
The seller’s solicitor will need to pay the money required to redeem the mortgage to the seller’s lender. This is likely to be paid out of the completion monies but it is the redemption amount and not the amount of the completion monies that must be paid over.
In registered land the seller’s solicitor will receive a Form DS1 from the lender discharging the mortgage, a receipted mortgage is used in unregistered land to show a mortgage has been discharged.
The seller’s solicitor cannot forward the receipted mortgage or DS1 until they receive it from the seller’s solicitor so they cannot undertake to send it immediately.
incorrect
To undertake forthwith to pay the lender the money required to redeem the mortgage and to forward Form DS1 immediately to the buyer’s solicitor.
Incorrect. Please review your materials on requisitions on title, in particular focussing on the form of the seller’s solicitor’s undertaking provided pre-completion in respect of the seller’s mortgage / charge.
Which one of the following is the most accurate statement regarding the Completion Information and Undertakings Form?
The Completion Information and Undertakings Form asks for details of the bank account to send the completion monies to.
The seller completes and returns the Completion Information and Undertakings Form.
The Law Society’s Form TA13 must be used as the Completion Information and Undertakings Form.
The Completion Information and Undertakings Form is sent by the seller’s solicitor to the buyer’s solicitor.
The Completion Information and Undertakings Form asks for details of the bank account to send the completion monies to.
Correct
Correct.
The Completion Information and Undertakings Form is sent by the buyer’s solicitor to the seller’s solicitor to obtain information about completion.
Form TA13 is one example of the Completion Information and Undertakings Form. Firms can use their own in house version.
The Completion Information and Undertakings Form is completed by the seller’s solicitor and signed by the seller’s solicitor. This is important as only a solicitor can give an enforceable undertaking and the Completion Information and Undertakings Form requests an undertaking in respect of the seller’s mortgage / charge.
Which one of the following is the most accurate summary of pre-completion requisitions on title?
They ask for key information regarding completion and deal with relevant undertakings required from the seller’s solicitor.
They are undertakings which the seller’s solicitor has to provide before completion.
They are enquiries sent to the Land Registry regarding the title being bought.
They are questions on the entries in the registers of title of the property.
They ask for key information regarding completion and deal with relevant undertakings required from the seller’s solicitor.
Correct
Correct.
Questions on the registers of title are asked pre-exchange in the title investigation stage.
Whilst the pre-completion requisitions on title deal with undertakings they also ask for practical information regarding completion.
Requisitions on title are questions asked of the seller’s solicitor regarding practical information for completion and dealing with relevant undertakings required from the seller’s solicitor.
incorrect
They are undertakings which the seller’s solicitor has to provide before completion.
Incorrect
Incorrect. Please review your materials on requisitions on title in particular on the content of the requisitions on title which includes more than just undertakings.
Which one of the following is correct regarding the Law Society’s Code for Completion by Post (the ‘Code’)?
The Code enables the buyer’s solicitors to act as agent for the seller’s solicitors.
The Code contains professional undertakings.
The Code is compulsory when completing by post.
The Code cannot be used in commercial property purchase transactions.
The Code contains professional undertakings.
Correct
Correct.
The Code is a voluntary procedure for postal completion.
The Code can be used for the completion of both residential and commercial property purchases.
The Code enables the seller’s solicitors to act as agent for the buyer’s solicitors. Completion occurs at the seller’s solicitor’s office as they hold the executed TR1 and receive the completion monies.
A solicitor acts for a buyer who is about to complete, having exchanged a week previously. The contract provides for the buyer to give an indemnity covenant. The seller has a mortgage, and the buyer is buying with the benefit of a 75% mortgage. The buyer has already approved the draft SDLT return. What documents does the solicitor need the buyer to execute or sign?
The transfer deed, the mortgage deed, and the discharge of the existing mortgage only.
The mortgage deed only.
The transfer deed, the mortgage deed, and written authority to complete only.
The transfer and mortgage deed only.
The transfer only.
The transfer and mortgage deed only.
Correct
Correct. The buyer will need to execute the transfer as they are giving an indemnity covenant, and the mortgage deed because they are buying with a mortgage.
Which one of the following is a requirement of the Law Society’s Code for Completion by Post (the ‘Code’)?
The seller’s solicitor is to confirm to their client in writing that completion has occurred immediately after it has occurred.
Written confirmation of completion must be sent to the buyer’s solicitor as soon as possible after completion and in any event by the end of the working day following completion.
The TR1 must be sent to the buyer’s solicitor by the end of the day of completion.
The seller’s solicitor must send the DS1 to the Land Registry as soon as they receive it from the seller’s lender.
Written confirmation of completion must be sent to the buyer’s solicitor as soon as possible after completion and in any event by the end of the working day following completion.
Correct
Correct. The Code says that the TR1 must be sent to the buyer’s solicitor as soon as possible after completion and in any event by the end of the working day following completion.
The Code also says that as soon as possible after completion the seller’s key holder is to be notified and authorised to make the keys available to the buyer immediately and the seller’s solicitor is to confirm the date and time completion took place to the buyer’s solicitor. The Code does not put a requirement on the seller’s solicitor to notify their client as it governs the process of completion between the two solicitors. The seller’s solicitor will of course let their client know completion has occurred as soon as possible as best practice.
The Code does not place a requirement re: the DS1 on the seller’s solicitor. The seller’s solicitor will fulfil the terms of their undertaking regarding any seller’s mortgage / charge but the usual form of undertaking will be to send the DS1 to the buyer’s solicitor. It will then be the buyer’s solicitor’s post-completion task to arrange for the mortgage to be removed at the Land Registry.
Which one of the following correctly sets out the advice that you would now give your seller client?
Provided the buyer completes by 2pm on Monday your client is entitled to one day of compensation under the SCS.
Provided the buyer completes by 2pm on Monday your client is entitled to three days of compensation under the SCS.
Provided the buyer completes by 2pm on Monday and your client serves a notice to complete under the SCS, your client is entitled to three days of compensation under the SCS.
Time is of the essence. Your client may simply refuse to complete the sale to the buyer on Monday. The seller is entitled to keep the deposit paid by the buyer at exchange.
Provided the buyer completes by 2pm on Monday your client is entitled to three days of compensation under the SCS.
Correct
You correctly identified that the seller, who is not in default, would be able to claim compensation under the SCS for three days (Friday, Saturday and Sunday - the days of default). The compensation is payable for each day that the buyer does not complete by 2pm (the latest time for completion under the SCS), including the weekend.
Under the SCS, time is not of the essence until a notice to complete has been served. The seller would not be entitled to take the buyer’s deposit until the expiry of the notice to complete and rescission by the seller.
There is no need to serve a notice to complete in order to trigger the right to compensation, although it is common in practice for a non-defaulting party’s solicitor to serve the notice to complete to protect their client’s right to keep the deposit and rescind the contract after ten working days following the service of the notice (excluding the day the notice was given).
Due to an issue with their related purchase, a seller cannot complete until five calendar days following the completion date. The contract incorporates the Standard Conditions of Sale with no amendment.
The buyer had already left their rented accommodation, and has had to pay hotel and storage costs totalling £750. Assume that the costs are reasonable.
The contractual compensation for the delay would work out at £200.
What is the most the the buyer can claim from the seller?
The hotel and storage costs of £750 less the contractual compensation of £200 = £550.
The hotel and storage costs of £750.
Nothing, as the compensation is fault-based, and the seller is not at fault, as the delay is due to its own seller.
The contractual compensation of £200.
The hotel and storage costs of £750.
Correct.
It is the contractual completion date and the buyer of a residential property, where the contract incorporates the Standard Conditions of Sale (SCS), fails to complete. The seller is ready, able and willing to complete. Which one of the following statements regarding the seller’s remedies is most accurate?
If the seller serves a notice to complete and the buyer fails to complete before the notice has expired, the contract will be deemed to be automatically rescinded immediately upon the expiry of the notice period.
The seller is entitled to rescind the contract and forfeit the buyer’s deposit ten working days after the contractual completion date.
The seller is immediately entitled to rescind the contract and keep the buyer’s deposit because time will be of the essence as soon as the completion date has passed.
If the seller serves a notice to complete, the buyer fails to complete in accordance with the notice and the seller rescinds the contract, the seller is no longer entitled to contractual compensation under the SCS.
If the seller serves a notice to complete, the buyer fails to complete in accordance with the notice and the seller rescinds the contract, the seller is no longer entitled to contractual compensation under the SCS.
Correct
Correct.
The SCS compensation is for delayed completion. Completion has to actually occur for the compensation to be payable. If the contract is rescinded, completion cannot occur and there is no entitlement to contractual compensation although common law damages could be claimed for any loss suffered from the breach of contract.
Time is not of the essence under the SCS until a notice to complete is served. The notice needs to expire before the seller can rescind the contract and keep the buyer’s deposit.
The seller is not entitled to rescind the contract or keep the buyer’s deposit under the SCS until a notice to complete has been served and the notice period has expired.
The seller can rescind the contract once the notice to complete has expired but rescission is not automatically triggered by the expiry of the 10 working day notice period in the notice to complete.
incorrect
If the seller serves a notice to complete and the buyer fails to complete before the notice has expired, the contract will be deemed to be automatically rescinded immediately upon the expiry of the notice period.
Incorrect
Incorrect. Please review your materials on delay or failure to complete, in particular focussing on the notice to complete procedure and effect.
A company buyer has completed the purchase of a commercial freehold registered property in England with the aid of a mortgage. The seller did not have a mortgage/charge over the property. Post-completion, which one of the following is the most accurate list of the documents which the buyer’s solicitor must send to the Land Registry with their application on Form AP1?
TR1, SDLT1, Buyer’s mortgage/charge and the Certificate of Registration of the Charge.
The contract of sale, a plan of the property, SDLT1 and buyer’s mortgage/charge.
TR1, SDLT5, Buyer’s mortgage/charge and the Certificate of Registration of the Charge.
TR1, a plan of the property, SDLT5 and Buyer’s mortgage/charge.
The contract of sale, SDLT1, Buyer’s mortgage/charge and the Certificate of Registration of the Charge.
TR1, SDLT5, Buyer’s mortgage/charge and the Certificate of Registration of the Charge.
Correct.
The SDLT1 is the form sent to HMRC when SDLT is paid. HMRC will send back the SDLT5 acknowledgement of receipt which then needs to be sent with the Land Registry application.
The Land Registry do not need the contract of sale, they need the purchase deed (the transfer – TR1) to register the change in registered proprietor (owner) of the land.
The Land Registry do not need a plan of the property as it is already registered so they have a title plan already.
As the buyer is a company, their mortgage/charge needs to be registered at Companies House post-completion. Companies House will return a Certificate of Registration of Charge and this needs to be sent to the Land Registry as well as the buyer’s mortgage/charge so that it is registered against the title.
incorrect
TR1, SDLT1, Buyer’s mortgage/charge and the Certificate of Registration of the Charge.
Incorrect
Incorrect. Please review your materials on post-completion steps, in particular focussing on the Land Registry application for registered land. Look at the difference between an SDLT1 and an SDLT5.
Which one of the following is the correct deadline for the Land Registry application post-completion of the purchase of a registered freehold property?
30 days from the date contracts are exchanged.
30 working days from the date of the OS1 priority search result.
30 days from the date of the OS1 priority search.
30 days from the date of completion.
30 working days from the date of completion.
30 working days from the date of the OS1 priority search result.
Correct
Correct.
It is 30 working days rather than 30 days. This is the priority period of the OS1 priority search and the application to the Land Registry must be made before the priority period ends.
The deadline runs from the date of the OS1 priority search result rather than completion as it is the OS1 search result which provides the priority period within which the Land Registry application must be made.
The deadline runs from the date of the OS1 priority search result made pre-completion rather than the date contracts are exchanged as it is the OS1 search result which provides the priority period within which the Land Registry application must be made.
incorrect
30 days from the date of the OS1 priority search.
Incorrect
Incorrect. Please review your materials on post-completion steps, in particular focussing on the length of the deadline for the Land Registry application made post-completion of the purchase of a registered freehold property.
A company is buying a registered freehold property in Wales with the aid of a mortgage. Which one of the following most accurately identifies the steps the buyer’s solicitor will carry out post-completion of the purchase?
1) Draft the TR1,
2) submit requisitions on title,
3) carry out an OS1 search and
4) obtain finance from the buyer and its lender.
1) carry out an OS1 search,
2) send the SDLT1 and pay SDLT at HMRC and
3) apply to the Land Registry using Form AP1.
1) Register the buyer’s mortgage at Companies House,
2) send the SDLT1 and pay SDLT at HMRC and
3) apply to the Land Registry using Form AP1.
1) Send the SDLT1 and pay SDLT at HMRC and
2) apply to the Land Registry using Form AP1.
1) Register the buyer’s mortgage at Companies House,
2) send the LTT Return and pay LTT at WRA and
3) apply to the Land Registry using Form AP1.
1) Register the buyer’s mortgage at Companies House,
2) send the LTT Return and pay LTT at WRA and
3) apply to the Land Registry using Form AP1.
Correct
Correct.
As the property is in Wales LTT is payable to the WRA rather than SDLT to HMRC. The buyer’s mortgage must also be registered at Companies House (or it will be void as against liquidators, administrators and any other creditors) as the buyer is a company. The Land Registry application is necessary as the transfer and the buyer’s mortgage need to be registered on the title to the property.
An individual buyer purchases a freehold residential registered property in England with the aid of a mortgage. The buyer did not occupy the property prior to completion. The seller did not have a mortgage over the property. Which one of the following most accurately sets out the relevant post-completion steps and their deadlines?
1) Registration of the buyer’s mortgage at Companies House within 21 days from completion,
2) payment of LTT at WRA within 30 days from the day after completion and
3) application to the Land Registry to register the transfer and the buyer’s mortgage within 30 days of completion.
1) Payment of SDLT at HMRC within 14 days of completion and
2) application to the Land Registry to register the transfer within 30 days of completion.
1) Payment of SDLT at HMRC within 14 days of completion and
2) application to the Land Registry to register the transfer and the buyer’s mortgage within 30 working days of the OS1 priority search result.
1) Registration of the buyer’s mortgage at Companies House within 21 days starting on the day after the date of completion,
2) payment of LTT at WRA within 30 days from the day after completion and
3) application to the Land Registry to register the transfer and the buyer’s mortgage within 30 working days of the OS1 priority search result.
1) Registration of the buyer’s mortgage at Companies House within 21 days starting on the day after the date of completion,
2) payment of SDLT at HMRC within 14 days of completion and
3) application to the Land Registry to register the transfer and the buyer’s mortgage within 30 working days of the OS1 priority search result.
1) Payment of SDLT at HMRC within 14 days of completion and
2) application to the Land Registry to register the transfer and the buyer’s mortgage within 30 working days of the OS1 priority search result.
Correct
Correct.
SDLT rather than LTT is relevant as the property is in England and, as there was no early occupation by the buyer, the effective date which the 14 day deadline runs from is completion.
The buyer’s mortgage does not need to be registered at Companies House because the buyer is an individual not a company.
The deadline for the Land Registry application is 30 working days from the OS1 priority search result and, as well as registering the transfer, the application to the Land Registry would include applying to register the buyer’s mortgage at the Land Registry.
incorrect
1) Registration of the buyer’s mortgage at Companies House within 21 days starting on the day after the date of completion,
2) payment of SDLT at HMRC within 14 days of completion and
3) application to the Land Registry to register the transfer and the buyer’s mortgage within 30 working days of the OS1 priority search result.
Incorrect
Incorrect. Please review your materials on post-completion steps. Think about whether the buyer’s mortgage must be registered at Companies House on these facts.
Which one of the following is the most accurate summary of the consequences of failing to comply with the relevant post-completion step within its relevant deadline following the purchase of a registered freehold property with the aid of a mortgage?
The consequence of failing to apply to the Land Registry to register the transfer and the buyer’s mortgage within the relevant deadline is that the transfer is void.
The consequences of failing to pay SDLT/LTT within the relevant deadline are penalties and interest.
The consequences of failing to apply to the Land Registry to register the transfer and the buyer’s mortgage within the relevant deadline are 1) that the transfer is voidable and 2) that the buyer would take the property subject to any third party interests that may have been registered subsequent to its OS1 search.
The consequence of failing to pay SDLT/LTT within the relevant deadline is that only the beneficial title and not the legal title passes to the buyer.
The consequence of failing to register a buyer’s mortgage at Companies House within the relevant deadline is a fine.
The consequences of failing to pay SDLT/LTT within the relevant deadline are penalties and interest.
Correct.
The consequences of failing to register a buyer’s mortgage at Companies House within the relevant deadline are that 1) the mortgage/charge is void against liquidators, administrators and other creditors; 2) the loan is repayable on demand; and 3) it could be construed as negligence on the part of the solicitor.
The consequences of failing to apply to the Land Registry to register the transfer and the buyer’s mortgage within the relevant deadline are that 1) the buyer would take the property subject to any third party interests that may have been registered subsequent to its OS1 search; and 2) the buyer will only have beneficial title (not legal title) to the property until they are registered as the registered proprietor of the title at the Land Registry.
Which one of the following statements about the basis of charge to Capital Gains Tax (CGT) is correct?
The amount of CGT payable depends on the rate of income tax an individual pays.
CGT is payable on the sale price of the property.
CGT is a tax imposed on the transferee, on the transfer of property.
The amount of CGT payable depends on the rate of income tax an individual pays.
Correct
Correct. If CGT is payable the rate depends on whether the individual paying is a basic rate or higher rate taxpayer.
SDLT/LTT are the taxes payable by the purchaser (transferee) on the transfer of property. CGT is a tax imposed on an individual who disposes of an asset (ie the transferor) and makes a chargeable gain.
CGT is payable on the chargeable gain made when an asset is disposed of. The chargeable gain is calculated by taking the sale price and subtracting the purchase price, any allowable expenses and the annual exemption.
In which one of the following situations is CGT payable?
A sale at a profit of an individual’s only main home which they have lived in themselves since buying it although they have let one room to a lodger and which is 500 square metres including the garden.
A sale at a profit of an individual’s only main home which they have only used to live themselves in since buying it and is 400 square metres including the garden.
A gift of a property to a spouse.
A sale at a loss of an individual’s only main home which they have only used to live themselves in since buying it and is 400 square metres including the garden.
A sale at a profit of an individual’s UK holiday home used by them for two months of the year and let out for the rest of the year.
A sale at a profit of an individual’s UK holiday home used by them for two months of the year and let out for the rest of the year.
Correct
Correct. This would not fall under the principal private dwelling house exemption and CGT would be payable.
CGT is not usually payable on gifts to a husband, wife or civil partner.
Sale of an individual’s one home which has been lived in as a main home all the time it was owned, has not had part let out or used for business only and is less than 5,000 square metres in total falls under the principal private dwelling house exemption. The exemption allows the owner to have a single lodger and still applies in that case.
CGT is payable on a gain. If the property was sold at a loss, there is no gain to pay CGT on.
Which one of the following situations would mean the principal private dwelling house exemption is not available?
The owner of the dwelling house had a lodger whilst they owned the house.
The owner of the dwelling house was absent on an extended round the world holiday for a period of four years during the middle of the period of fifteen years in which they owned the house.
The owner of the dwelling house works from home one day a week on their kitchen table.
The owner of the dwelling house was absent on an extended round the world holiday for a period of four years during the middle of the period of fifteen years in which they owned the house.
Correct
Correct. Only period(s) of absence not exceeding three years in total throughout the period of ownership are disregarded for the purpose of applying the exemption.
Whilst you cannot let part of the dwelling house out under the conditions of the exemption, you are allowed to have a single lodger.
Whilst the dwelling house should not be used for business, the full exemption is still available if there is duality of user ie a person works from home but not in a separate room which is used purely for business use.
You act for the seller of a registered freehold property. The seller is a company registered in England. The seller company has three shareholders (none of whom is an officer of the company), one director and the company secretary. There is a shareholder agreement. The seller asks who should sign the TR1.
What do you tell the seller?
A. Any two of the three shareholders, or all of them if the shareholder agreement provides. B. The director.
C. The director and all three shareholders.
D. The company secretary and at least one of the shareholders.
E. The director and a witness.
E. The director and a witness.
In a residential property transaction, the buyer completes three working days later than the completion date agreed on exchange of contracts. The contract is a standard form contract incorporating the Standard Conditions of Sale (5th Edition). The seller served notice to complete promptly after the deadline for completion had passed.
Which remedies does the seller have against the buyer?
A. None, as the buyer completed within the ten working day period allowed by the notice to complete.
B. Contractual interest for three working days and a claim for damages in addition to it.
C. Contractual interest for the number of calendar days’ delay and a claim for damages in addition to it.
D. Contractual interest for three working days and a claim for damages less the calculated interest.
E. Contractual interest for the number of calendar days’ delay and a claim for damages less the calculated interest.
E - Contractual interest for the number of calendar days’ delay and a claim for damages less the calculated interest.
contractual compensation is not limited to working days!
A solicitor is acting for the purchaser of a property with registered title. The purchaser is buying the property with the aid of a mortgage. Contracts have been exchanged, requisitions on title made, and the solicitor has conducted a pre-completion priority search of the title.
Following completion the solicitor will need to deal with post-completion matters involving payment of Stamp Duty Land Tax (SDLT) to HM Revenue & Customs and registration of the dealing at the Land Registry.
Registration at the Land Registry must take place within 30 working days of which date?
A. The date contracts are exchanged, to avoid interest becoming payable on outstanding SDLT.
B. The date of completion, to avoid interest becoming payable on outstanding completion monies.
C. The date of completion, to avoid the equitable title in the property reverting to the seller.
D. The date of the result of the priority search, to avoid subsequent entries being made on the title which bind the purchaser.
E. The date of completion, to avoid the mortgagee’s power of sale arising under the legal charge.
SQE1 sample question
D. The date of the result of the priority search, to avoid subsequent entries being made on the title which bind the purchaser.
Which one of the following do you think a landlord would prefer to have as a tenant?
Coolings Landscaping Limited - a newly formed subsidiary company of Coolings Plc. Coolings Plc is a highly profitable UK garden centre chain.
A person who has been running a catering company for over 10 years.
Abacus Limited - a newly formed company with no trading history.
Sainsways Plc - a UK supermarket chain established 80 years ago.
Incorrect
Sainsways Plc - a UK supermarket chain established 80 years ago.
Correct
Correct. A chain of companies that has been trading for 80 years is more desirable than the other options shown.
Which one of the following provisions would prevent a lease being an FRI lease?
A tenant’s covenant to pay towards the cost of maintaining any areas used in common with other tenants.
A tenant’s covenant to pay annual rent but no further sums.
A tenant’s covenant to keep the premises in good and substantial repair and condition.
A provision requiring the rent to be paid quarterly.
Rent review provisions.
A tenant’s covenant to pay annual rent but no further sums.
Correct
Correct. An FRI lease would expect a tenant to pay the cost of insuring the property and, if appropriate, service charge.
What is the attraction of commercial property to institutional investors?
It offers income and capital growth which outweigh the repair costs that the landlord will need to account for.
Commercial property is unaffected by changes in the market.
It offers income, the potential for capital growth and is seen as reasonably secure.
Compared to other investments such as equities, there is little management required.
Commercial property is exempt from Stamp Duty Land Tax or Land Transaction Tax.
It offers income, the potential for capital growth and is seen as reasonably secure.
Correct. Commercial property offers all of these advantages.
A warehouse owner agrees to allow a business tenant to occupy the whole of the warehouse for a year, paying a fixed sum every month. There is nothing in writing.
What is the legal status of this arrangement?
It is a licence to occupy the premises.
It is a one year oral tenancy.
It is a void tenancy as it does not comply with the necessary legal formalities.
It is a tenancy at will.
It is a void tenancy as it fails for want of certainty.
It is a one year oral tenancy.
Correct
Correct. A tenancy of 3 years or under may be created orally.
The owner of a department store enters into a written agreement with a key cutter to operate a stall on the ground floor, paying a weekly fixed sum. The agreement is for a minimum of six months, after which it can be ended by a month’s notice by either party. The agreement also states that the department store can require the stall to be moved to a different location as long as it is on the ground floor.
What legal arrangement is this?
A periodic tenancy.
A bare licence.
A tenancy at will.
A licence to occupy.
A fixed term tenancy.
A licence to occupy.
Correct
Correct. The nature of the agreement is that the key cutter may be required to move, and therefore does not have exclusive possession of any part of the premises. It is a licence.
incorrect
A periodic tenancy.
Incorrect
Incorrect. This arrangement does not give exclusive possession.
A solicitor is adapting a 1 year lease precedent to a term for four years.
What difference should the solicitor be aware of?
As the lease term is over 3 years, it will need to be signed under hand.
As the lease term is over 3 years, it will need to be executed as a deed.
As the lease term is over 1 year, it will need to be signed under hand.
As the lease term is over 1 year, it will need to be executed by deed.
A four year lease will require more obligations on the part of the tenant.
As the lease term is over 3 years, it will need to be executed as a deed.
Correct
Correct. A legal tenancy of over 3 years must be created by deed.
Which of these statements is correct?
The term commencement date can only be the same day or later than the date of the lease.
The term commencement date can be earlier, the same day, or later than the date of the lease.
The term commencement date is fixed, but the lease can be backdated, for example, to before an increase in Stamp Duty Land Tax rates.
The term commencement date can only be earlier or the same day as the date of the lease.
The term commencement date can only be the same day as the date of the lease.
The term commencement date can be earlier, the same day, or later than the date of the lease.
Correct. The term commencement date can be any of these.
A tenant has a 10 year FRI lease. The initial rent was £40,000 per annum. The 5 year upwards only rent review is coming up. The tenant’s surveyor has advised that although the rental market has stayed static, due to the landlord’s neglect of the common areas, the rent should only be £35,000 per annum on review. The hypothetical lease assumes only that the tenant, not the landlord, has complied with its covenants.
What would you expect to happen on review?
The rent will remain the same because it is an upwards only rent review.
The parties are likely to negotiate the rent to somewhere between £35,000 and £40,000.
The rent will be reviewed to £35,000 to take account of the landlord’s neglect.
The rent will be reviewed to £35,000 because the hypothetical lease only applies to rent increases.
The rent will remain the same because the landlord’s neglect of the common areas is ignored.
The rent will remain the same because it is an upwards only rent review.
Correct
Correct. The hypothetical lease would take into account the landlord’s neglect of the common areas, but the rent will not drop because the rent review is upwards only.
A tenant has a restaurant business in premises on a 10 year lease. The 5 year rent review is coming up. The initial rent was £10,000 per annum. The rent on the open market now would be £14,000. However, due to the tenant’s success with the restaurant, the tenant’s surveyor considers that a rival restaurant business would gladly pay a rent of £20,000 per annum for the premises. The upwards only open market rent review clause contains a standard set of assumptions and disregards. The retail prices index has increased by 5% since the beginning of the lease.
What would you expect the reviewed rent to be?
£10,500
£10,000
£14,000
£14,500
£20,000
£14,000
Correct
Correct. The rent will be increased to the open market rent. The increase due to the tenant’s business (goodwill) would normally be disregarded.
incorrect
£10,500
Incorrect. This is an open market rent review, not index linked.
In which of the following scenarios would the Code for Leasing Business Premises apply?
A 10 year lease of office premises negotiated by an RICS regulated agent.
A 10 year lease of an office premises let by a landlord who is a member of the British Landlord Association.
A 20 year advertising hoarding licence negotiated by an RICS member.
A six month tenancy of a warehouse negotiated by an RICS regulated agent.
A one year lease of a flat to a couple negotiated by an RICS regulated agent.
A 10 year lease of office premises negotiated by an RICS regulated agent.
Correct
Correct. The agent would be bound by the provisions of the Code.
WHY is this “A 20 year advertising hoarding licence negotiated by an RICS member.” wrong?? NOT A LEASE! it is a license
A solicitor is instructed on a 10 year commercial letting by a landlord who is a member of RICS. The letting agent is unregulated. On receiving the heads of terms, the solicitor notices one provision that does not comply with the mandatory requirements of the Code for Leasing Business Premises.
Which statement best describes the solicitor’s duties?
The solicitor should advise the landlord of the provision that does not comply.
The Code would not apply as the letting agent is not regulated.
The solicitor must comply with the Code for Leasing Business Premises, and if the client does not agree, then the solicitor must cease acting.
The solicitor can assume that the Code for Leasing Business Premises applies, and may disregard the provision in the heads of terms that contravenes it.
The solicitor can disregard the Code as the Code only applies to the landlord.
The solicitor should advise the landlord of the provision that does not comply.
Correct
Correct. Although the landlord is an RICS member and should be aware of the Code, having spotted the provision, the solicitor should advise the landlord.
Which of the following most accurately states the difference between mandatory requirements and good practice in the Code for Leasing Business Premises?
RICS members must follow mandatory requirements and good practice. Non-RICS members are only required to observe good practice.
Mandatory requirements are legally binding; good practice is advisory only.
When the Code applies, RICS members and regulated firms must follow mandatory requirements. They must follow good practice unless there are exceptional reasons for not doing so.
When the Code applies, RICS members and regulated firms must follow mandatory requirements. They should follow good practice, but this is a matter for their discretion.
When the Code applies, RICS members and regulated firms must follow mandatory requirements unless there are exceptional reasons not to do so. They should follow good practice unless there are good reasons not to do so.
When the Code applies, RICS members and regulated firms must follow mandatory requirements. They must follow good practice unless there are exceptional reasons for not doing so.
Correct
Correct. This correctly states the difference.
When should pre-contract searches be carried out in a leasehold transaction?
Searches should be unnecessary if the landlord provides sufficient detail in the replies to CPSE enquiries.
They should usually be carried out, but the client may decide not to bother in some instances (eg, a short tenancy).
They are required if there is a full repairing obligation.
Searches are only necessary if the lease is registrable at the Land Registry.
They must be carried out in every leasehold transaction.
They should usually be carried out, but the client may decide not to bother in some instances (eg, a short tenancy).
Correct
Correct. The starting point is that searches should be carried out. If the client decides not to bother, then the solicitor should ensure that they are advised on possible consequences.
Which of the following correctly describes what a landlord’s and tenant’s solicitors do on completion of a commercial lease?
The landlord’s solicitor dates the original lease. The tenant’s solicitor sends the completion monies and dates the counterpart lease.
The landlord’s solicitor dates the original lease and the tenant’s solicitor dates the counterpart lease. The tenant will usually send the completion monies to the landlord directly.
The landlord’s solicitor dates the counterpart lease. The tenant’s solicitor sends the completion monies and dates the original lease.
The landlord’s and tenant’s solicitors date the lease in duplicate and then send them to their respective clients for signature.
The landlord’s solicitor dates the original lease and the tenant’s solicitor dates the counterpart lease. The parties exchange the agreement for lease under Formula B.
The landlord’s solicitor dates the original lease. The tenant’s solicitor sends the completion monies and dates the counterpart lease.
Correct
Correct. The original lease is that signed by the landlord; the counterpart by the tenant. The completion monies are paid by the tenant to the landlord through their solicitors.
Incorrect
The landlord’s solicitor dates the original lease and the tenant’s solicitor dates the counterpart lease. The parties exchange the agreement for lease under Formula B.
Incorrect. Except for a residential long lease, it would be rare for an agreement for lease to be exchanged simultaneously with the grant of a lease.
You act for a tenant taking a 5 year lease of part from a landlord with a registered freehold title. Which is the correct pre-completion search to carry out?
An OS1 search.
A central land charges search against the name of the new tenant.
An OS3 search.
An OS2 search
A central land charges search against the landlord’s name.
An OS3 search.
Correct
Correct. As the lease is not registrable, priority is not needed, and an OS3 search is appropriate.
WHY IS THE LEASE NOT REGISTRABLE?hope
incorrect
An OS2 search
Incorrect
Incorrect. An OS3 search would be more appropriate as the lease is not registrable.
A solicitor is reviewing a draft lease to work out what the tenant is directly responsible for repairing.
Where should the solicitor look for this information?
The tenant’s repairing covenant and the definition of the premises.
The tenant’s repairing and alterations covenants.
The tenant’s survey.
The tenant’s repairing covenant and the service charge provisions.
The tenant’s repairing covenant only.
The tenant’s repairing covenant and the definition of the premises.
Correct
Correct. The tenant’s repairing covenant is read in conjunction with the definition of the premises.
A tenant is taking a 10 year FRI lease of a newly constructed building. The lease excludes inherent and structural defects from the tenant’s repairing obligation.
Why does the tenant instruct its surveyor to carry out a full building survey?
Because the tenant cannot be required to put the premises into any better state of repair than it was at the date of the lease, and the survey will provide evidence of this.
Because the survey will identify any problems arising from poor design or construction that will be the tenant’s responsibility in the lease.
Because it is quicker to obtain a survey than a full set of searches.
Because under the principle of caveat emptor, the tenant cannot complain about any wants of repair that come to light after completion.
Because the tenant will be responsible for putting right any items that are in disrepair (save where arising from poor design or construction).
Because the tenant will be responsible for putting right any items that are in disrepair (save where arising from poor design or construction).
Correct
Correct. In an FRI lease, the tenant gives a full repairing obligation and will have to put the premises in good repair.
A tenant takes an FRI lease of a warehouse that comprises the whole of the landlord’s title.
How is it likely that the lease will deal with insurance?
The landlord will insure the warehouse, but will contribute a small percentage of the insurance premium given that the landlord is the freeholder.
The landlord will insure the warehouse at its own expense, as there are no other tenants to contribute.
The landlord will insure the freehold and the tenant will insure the leasehold.
The tenant insures the warehouse at its own cost, and there is an obligation in the lease to this effect.
The landlord insures the warehouse and recovers the whole of the premium from the single tenant.
The landlord insures the warehouse and recovers the whole of the premium from the single tenant.
Correct
Correct. The landlord will normally insure, recovering the premium from the tenant.
You act for the tenant of the top floor of an office forming part of a large office block on an FRI lease. The lift has broken down, and the tenant wants to know details of the responsibility for (1) arranging its repair (2) paying for its repair.
Where in the lease are you likely to find the answer?
A. The repairing clause in the tenant’s covenants.
B. The insuring clause in the landlord’s covenants.
C. The provision of services clause in the landlord’s covenants and the service charge obligation in the tenant’s covenants or in the schedule on services and service charge.
D. The provision of services clause in the tenant’s covenants and the service charge obligation in the landlord’s covenants.
E. The rent suspension clause.
C. The provision of services clause in the landlord’s covenants and the service charge obligation in the tenant’s covenants or in the schedule on services and service charge.
correct
A – it is not going to be a tenant’s repair since it is a common part
B – nothing to do with insurance/ it is a repair issue
D – is the wrong way around
E – irrelevant
An institutional landlord and tenant are negotiating the new rent following a five year rent review in an FRI lease of a retail unit in a shopping centre.
Which of the following is likely to lead to an increase in the rent?
A. The tenant sells luxury goods and has fitted the unit to a particularly high quality specification.
B. The tenant is a major department store and has increased the footfall to the shopping centre.
C. The tenant could be expected to pay more rent to avoid the cost and inconvenience of moving to another property.
D. Rents of comparable properties in the local area have increased in the last five years.
E. Rents of other properties in the landlord’s portfolio have increased in the last five years.
D. Rents of comparable properties in the local area have increased in the last five years.
correct ( cf assumptions and disregards)
A – tenant improvements disregarded
B – goodwill of the tenant disregarded
C – tenant in occupation is disregarded
E – not relevant to market rent! unless every property in landlord’s portfolio is in the area (which we do not know on the facts)
A haulage company knows that it needs a warehouse unit for no more than five years. It finds a suitable unit, and the owner offers a fixed ten year term with a five year tenant’s only break, saying that this is better as the tenant has the choice.
How would you advise the haulage company?
A. The five year lease is preferable as complying with a break clause is onerous and can easily be forgotten.
B. The five year lease is preferable because it is at the discretion of the landlord whether to accept the tenant’s break notice.
C. The five year lease is preferable because a shorter term lease will contain fewer onerous provisions.
D. The ten year lease is preferable as it gives the option to stay on after the five year term.
E. There is no real difference as the haulage company can give notice at any time to end the lease in either case.
A. The five year lease is preferable as complying with a break clause is onerous and can easily be forgotten.
correct – respect your clients instructions! don’t engage yourself no longer than you need to
B – incorrect, not at landlord’s discretion if served correctly
C – not necessarily true (cannot assume this)
D – not correct: you have a 10 year lease but have the ability to break after 5 years
E – not true! unless it was a rolling break clause from the 5 year point but still need to serve notice properly
You are acting for a tenant who has agreed to take a 10 year lease of a unit in a shopping centre. The landlord is the freehold owner of the shopping centre.
Which one of the following best describes one of the pre-completion steps you will need to take before completion of the lease?
Request completion monies from the tenant.
Arrange for the tenant to sign the underlease.
Apply to register the lease at the Land Registry using form AP1.
Submit a final certificate of title to the bank.
Carry out an OS1 search.
Request completion monies from the tenant.
Correct
Correct. You will need to be in funds for all completion monies due, which usually will be the first quarter’s rent, service charge and insurance rent so this can be sent to the landlord’s solicitor at completion.
Incorrect
Carry out an OS1 search.
Incorrect. Please revisit your understanding of the pre-completion steps required for the grant of a commercial lease and when an OS2 search is appropriate instead of an OS1 search.
What effect do the mandatory provisions of Royal Institution of Chartered Surveyors (RICS) Code for Leasing Business Premises (1st edition February 2020) have regarding leasehold transactions?
Following completion of a lease with an RICS regulated landlord, a tenant may apply to the court to strike out any provisions of the lease that do not comply with the mandatory provisions of the Code and are manifestly unreasonable.
Following completion of a lease with an RICS regulated landlord, a tenant may apply to the court to strike out any provisions of the lease that do not comply with the mandatory provisions of the Code.
Solicitors who act for an RICS member or RICS firm must comply with the Code or face disciplinary sanctions by the Solicitors Regulation Authority.
Letting agents and other property professionals must comply with mandatory provisions, and non-compliance may be taken into account in regulatory or disciplinary proceedings.
Letting agents and other property professionals who are RICS members or in a RICS regulated firm must comply with mandatory provisions, and non-compliance may be taken into account in regulatory or disciplinary proceedings.
Letting agents and other property professionals who are RICS members or in a RICS regulated firm must comply with mandatory provisions, and non-compliance may be taken into account in regulatory or disciplinary proceedings.
Correct
Correct. RICS members are bound by the Code’s mandatory provisions. (The Code also contains statements of good practice, which RICS members should follow unless there is a good reason not to.)
In which of the following situations would an agreement for lease not be necessary?
The landlord is in the process of buying an office block with a rental void, and the tenant has agreed to take a lease from the landlord once the purchase completes.
In a residential transaction for the sale of a newly constructed 999 year leasehold flat.
The tenant is taking a unit in a shopping centre that is currently under construction.
The tenant intends to take a high street premises for a restaurant, but first wants to apply for a premises licence which is essential for its business.
The parties to the lease are ready to proceed to completion as soon as the form of the lease has been agreed.
The parties to the lease are ready to proceed to completion as soon as the form of the lease has been agreed.
Correct. In this case, there is no need for an agreement for lease.
WHY??
incorrect
In a residential transaction for the sale of a newly constructed 999 year leasehold flat.
Incorrect. In a residential transaction, it is usual to exchange before or simultaneously with completion. This document may be referred to as a contract, but it can also be described as an agreement for lease.
The landlord is in the process of buying an office block with a rental void, and the tenant has agreed to take a lease from the landlord once the purchase completes.
Incorrect. An agreement for lease would be useful here to tie the parties into the transaction conditional on the purchase of the office block completing.
The tenant intends to take a high street premises for a restaurant, but first wants to apply for a premises licence which is essential for its business.
Incorrect. An agreement for lease may be useful here so that the parties can commit to the lease, but completion of the lease is conditional upon the premises licence being obtained.
The tenant is taking a unit in a shopping centre that is currently under construction.
Incorrect. An agreement for lease would be used to lock the tenant in to taking the unit in once the shopping centre has been constructed.
Which of the following may not be a valid lease term?
A 10 year lease to start one year after signing the lease.
A 10 year lease with the option to renew the lease at the end of the 10 years.
A lease in which the tenant can occupy on a month by month basis, paying the rent monthly.
A lease to run for 10 years, but may be brought to an end earlier if the tenant firm is no longer employed as the landlord’s accountants.
A lease to run as long as the tenant firm is employed as the landlord’s accountants.
A lease to run as long as the tenant firm is employed as the landlord’s accountants.
Correct. This is not a valid lease term. The lease term must be certain and may not continue indefinitely.
A lease to run for 10 years, but may be brought to an end earlier if the tenant firm is no longer employed as the landlord’s accountants.
Incorrect
Incorrect. This is a valid lease term. The lease term has a certain maximum duration, even though it can be brought to an end earlier.
In negotiations to take a commercial lease in England, the prospective tenant asks for a 5 year lease term as the tenant knows that it will not need the premises for longer. The landlord offers a 10 year lease with a 5 year mutual break clause, saying this is just as good.
As the prospective tenant’s solicitor, what advice can you give?
Although the tenant can get out of the lease at 5 years, exercising a break is not straightforward. However, the Stamp Duty Land Tax calculation will not be affected.
You cannot advise your client on this as it is regulated financial advice.
A 10 year lease with 5 year break is better, as it as it gives the tenant a choice whether to leave at 5 years or 10 years. The Stamp Duty Land Tax calculation will not be affected.
Although the tenant can get out of the lease at 5 years, exercising a break is not straightforward, and there may be more Stamp Duty Land Tax payable on the longer term.
A 10 year lease with 5 year break is better, as it gives the tenant a choice whether to leave at 5 years or 10 years. However, there may be more Stamp Duty Land Tax to pay.
Although the tenant can get out of the lease at 5 years, exercising a break is not straightforward, and there may be more Stamp Duty Land Tax payable on the longer term.
Correct. Break clauses are generally strictly drafted, and if the tenant does not comply exactly with their requirements, the break notice will be invalid. As the length of the lease is relevant to SDLT calculations, there may be a greater amount of SLDT to pay.
A man gave £200,000 to his son in March 2013. He gave a further £200,000 to his daughter in March 2016. He made no other gifts during his lifetime. The man died in May 2020.
How much inheritance tax is payable on the gifts made by the man?
£10,080
£16.560
£25,200
£15,120
£0
£0
Correct
Correct. The first PET was made more than 7 years before the man’s death. This means that the first PET is not chargeable. The second PET in March 2016 is a chargeable transfer. The value of the transfer (£200,000 ) is below the NRB, meaning no tax is payable.
incorrect
£16.560
Incorrect
Incorrect. Note that the first PET was made more than 7 years before the man’s death and therefore it is not a chargeable transfer. You have calculated the value of the first PET and applied this against the NRB, thus reducing the amount of NRB available against the second PET. The value of the second PET is below the NRB, meaning no tax is payable.
In January 2020 a man made a gift of £10,000 to his son on his marriage. In July 2018 the man had made a gift to his daughter of £10,000 on her marriage. The man has just died.
What is the chargeable value of the gift to the man’s son after the deduction of available exemptions and reliefs?
£4,000
£2,000
£6,000
£7,000
£0
£2,000
Correct
Correct: The gift to the man’s son benefits from the annual exemption (‘AE’) for the 19/20 tax year. The AE for the 18/19 tax year was applied to the gift to the man’s daughter so is not available to be carried forward. The marriage allowance for a child of £5,000 is also deductible. It does not matter that the man gave his daughter the equivalent gift in the previous tax year. It is available to each child of the donor. The other options were wrong because they failed to apply both exemptions and/or incorrectly concluded that AE from the previous tax year was also available.
£0
Incorrect
Incorrect: Review your materials on lifetime exemptions and reliefs. The gift to the daughter was also made in the last tax year. What effect does that have on the availability of the annual exemption?
A woman died in August 2020. The only lifetime gifts she has made are as follows:
May 2015 a gift to her mother of £10,000
July 2016 a gift to her husband of £20,000
September 2016 a gift to her daughter of £5,000
October 2017 a gift to her son of shares in a private company valued at £5,000. She had owned the shares for 10 years.
What was the woman’s cumulative total on the date she died?
£4,000
£13,000
£6,000
£9,000
£40,000
£6,000 (REVIEW)
Correct
Correct: The value of the gift to her mother is £4,000 after deduction of the annual exemption for the current tax year and the previous tax year was not used up. The value of the gift to her husband is nil as it is spouse exempt. The value of the gift to her daughter in the same tax year is £2,000 after deduction of the annual exemption for that year which is not used up by the gift to her husband. There is no annual exemption for the previous year as this has been used up. The gift to her son is eligible for 100% business property relief. The other options were wrong because they did not apply all relevant exemptions and reliefs.
Incorrect
£13,000
Incorrect: Review your materials on the spouse exemption and think about how this affects the cumulative total.
£40,000
Incorrect: Review your materials on calculating tax on lifetime transfers. Note that the cumulative total is based on the chargeable value of the transfers. Not all of the transfers are chargeable, and some benefit from reliefs or exemptions that reduce their chargeable value.
A woman died yesterday and by her will leaves the whole of her estate to her children. The woman owned farming land with an agricultural value of £10,000 and market value of £30,000. She acquired this land 10 years ago. The land has not been occupied for farming for the last 3 years.
What is the amount of agricultural property relief that can be claimed by her estate?
£5,000
£10,000
£15,000
£0
£30,000
£0
Correct
Correct. APR applies to the agricultural value of property that has been owned and occupied for farming in the 2 / 7 years prior to death. The woman’s estate does not qualify for APR.
You are advising a client who has made the following transfers:
A gift into a trust in September 2017 of £10,000
A gift into a trust in January 2019 of £350,000
The client has made no other transfers. Following the gift in 2017, the client’s cumulative total was £4,000.
Calculate the inheritance tax due when the gift in 2019 was made. The nil rate band was £325,000.
£5,200
£3,800
£5,800
No inheritance tax is due as this gift is a potentially exempt transfer.
£9,200
£5,200
Correct
Correct: You needed to deduct one annual exemption, deduct the nil rate band and then tax the balance at 20%. £350,000 - £3,000 (tax year 17-18). The previous tax year’s annual exemption was used. £347,000 - £321,000 (the cumulative total was £4,000). £26,000 taxed at 20%.
Incorrect
£9,200
Incorrect: Review your materials on how to calculate the cumulative total. You deducted two annual exemptions. Only one annual exemption was available as the gift in September 2017 used up an annual exemption. You taxed the balance at 40% instead of 20%.
A tenant’s solicitor is calculating the SDLT due after completion. The lease has a Net Present Value of £105,000 and no premium. The landlord’s freehold is worth £200,000. The applicable rates are 0% up to £150,000, and 1% from £150,000 up to £5 million.
How much SDLT is payable?
£0
£1,050
£4,500
£1,500
£5,000
£0
Correct
Correct. There is no SDLT on this Net Present Value.
question: is the freehold value irrelevant to the fact pattern?
A tenant’s solicitor is calculating the LTT payable on a lease with a NPV of £425,000 and no premium. The prevailing rates are 0% up to £225,000 and 1% from £225,000 to £2 million.
What LTT is payable?
£2,000
£0
It is not possible to say, as it will depend whether the rent is payable annually, quarterly or monthly.
£4,250
£2,250
£2,000
Correct. The LTT is calculated as 1% of the £200,000 by which the NPV exceeds £225,000.
A tenant’s solicitor is dealing with the post-completion tasks on a 5 year lease.
Which of the following summarises the position with registration of the new lease?
The lease must be registered and will be given its own title number. It will also be noted against the landlord’s title.
The lease must be registered if the landlord’s title is registered.
The lease is not registrable but can be noted against the landlord’s title.
The lease must be registered as the grant of lease is an event triggering first registration.
The lease is not registrable and cannot be noted against the landlord’s title.
The lease is not registrable but can be noted against the landlord’s title.
Correct. The lease is more than 3 years but not more than 7 years. This is the correct answer.
A lease contains a covenant as follows: “not to alter the interior of the premises without the consent of the landlord”.
The tenant wants to insert some internal, non-structural partitioning.
How would you advise the landlord on this application?
The landlord can unreasonably withhold consent because it is not a fully qualified covenant.
It is likely that the landlord cannot unreasonably withhold consent if the alterations are considered an improvement from the tenant’s point of view.
The landlord can unreasonably withhold consent because if the tenant wants to make an improvement it can use the statutory procedure.
It is likely that the landlord cannot unreasonably withhold consent if the alterations are considered an improvement from the landlord’s point of view.
The landlord need not consider the application as it is an absolute covenant.
It is likely that the landlord cannot unreasonably withhold consent if the alterations are considered an improvement from the tenant’s point of view.
Correct. As the alteration improves the premises from the tenant’s perspective it would class as a tenant’s improvement.
Which of the following would be unlikely to appear in a licence for alterations?
A copy of the lease.
An obligation on the tenant to carry out work with good quality materials and a high standard of workmanship.
An obligation to obtain planning consent.
A time limit for starting and carrying out the works.
Plans and/or specifications of the proposed works.
A copy of the lease.
Correct. It is not usually necessary to include a copy of the lease.
A tenant occupies premises under a lease with a permitted use defined as “use as a hairdresser’s salon”. There is a qualified covenant against changes of use. The tenant wants to stop hairdressing and sell beauty products instead.
What does the tenant need to do?
The tenant need not ask for consent, as the permitted use and proposed use are both in planning use class E.
The tenant must ask for consent, and the landlord must act reasonably if withholding consent, as this is a tenant’s improvement.
The tenant need not ask for consent, as the permitted use definition breaches the Code for Leasing Business Premises.
The tenant must ask for consent, and the landlord must act reasonably if withholding consent as the new use is not dissimilar.
The tenant must ask for consent, but the landlord may unreasonably withhold it.
The tenant must ask for consent, but the landlord may unreasonably withhold it.
Correct. As it is not a fully qualified covenant, the landlord has no obligation to give consent.
incorrect
The tenant need not ask for consent, as the permitted use and proposed use are both in planning use class E.
Incorrect. The permitted use is more specific than the planning use class.
The tenant need not ask for consent, as the permitted use definition breaches the Code for Leasing Business Premises.
Incorrect. The Code for Leasing Business Premises only regulates RICS members and regulated firms, but does not override the provisions of a lease.
The tenant must ask for consent, and the landlord must act reasonably if withholding consent as the new use is not dissimilar.
Incorrect. The use is specified in the lease, and the landlord need not give consent to a different use, even if only slightly different.
An RICS regulated surveyor is preparing heads of terms for a landlord client letting out an
office building.
In doing so, which of the following may the surveyor do in accordance with the Code
for Leasing Business Premises?
A. State “see draft lease to follow” instead of giving the length of term.
B. State “see draft lease to follow” instead of giving the basis for rent review.
C. State a rent that is significantly above open market value.
D. Not refer to the permitted use, because it is obvious from the nature of the premises.
E. Tell the tenant that the surveyor will talk through the heads of terms over the phone
instead of providing them in writing
C. State a rent that is significantly above open market value.
correct - this is a commercial consideration
A – you have to give length of the term
B – transparency of lease needed including rent review
D – no, again transparency!
E – no: have to be writing
