PLP WK 1

Question 1

What is the principle of caveat emptor?

Answer 1

It means “buyer beware.” The buyer is responsible for discovering any issues with the property.

Question 2

Is the seller required to disclose defects in the property?

Answer 2

Not unless specifically asked.

Question 3

What are the buyer’s solicitor’s responsibilities under caveat emptor?

Answer 3

Investigate title, conduct searches, and raise pre-contract enquiries.

Question 4

What is the significance of exchanging contracts?

Answer 4

The buyer is legally bound. Withdrawal can result in financial penalties.

Question 5

How can a buyer discover physical issues with the property?

Answer 5

By getting a survey.

Question 6

What are the three key stages of a freehold property transaction?

Answer 6

Pre-exchange, pre-completion, and post-completion.

Question 7

What happens during the pre-exchange stage of a freehold transaction?

Answer 7

The buyer decides to buy, the surveyor surveys the property, the solicitor investigates the title, and the buyer and seller exchange contracts.

Question 8

What happens at the exchange of contracts?

Answer 8

The buyer and seller enter into a binding contract to buy/sell the property on a specific completion date, the buyer pays a deposit, and neither party can withdraw without penalty.

Question 9

What happens during the pre-completion stage?

Answer 9

The buyer’s solicitor orders mortgage funds and ensures the client has the money for completion; the residential buyer books removal vans, if applicable; the seller’s solicitor prepares paperwork to transfer the property; and completion occurs.

Question 10

What happens at completion?

Answer 10

The buyer’s solicitor sends the purchase price to the seller’s solicitor; the seller’s solicitor sends paperwork to the buyer’s solicitor to transfer the property; and the buyer receives the keys.

Question 11

What happens during the post-completion stage?

Answer 11

The seller’s solicitor pays off the seller’s mortgage, if any, and transfers the balance to the seller; the buyer’s solicitor pays SDLT/LTT and registers the buyer as the new owner at the Land Registry.

Question 12

What are the steps for the seller in the pre-exchange stage?

Answer 12

Take instructions, prepare a draft contract, deduce title, answer pre-contract enquiries, and respond to title-related queries.

Question 13

What are the steps for the buyer in the pre-exchange stage?

Answer 13

Take instructions, conduct pre-contract searches, investigate title, report on title to the client, and approve the draft contract.

Question 14

What are the steps for the seller in the pre-completion stage?

Answer 14

Approve the purchase deed, reply to pre-completion requisitions, and prepare for completion.

Question 15

What are the steps for the buyer in the pre-completion stage?

Answer 15

Prepare the purchase deed, issue pre-completion requisitions, carry out pre-completion searches, and prepare for completion.

Question 16

What does the property register describe?

Answer 16

The property and any rights benefiting it.

Question 17

What does the property register state?

Answer 17

Whether the property is freehold or leasehold and a description of the property.

Question 18

What are some examples of rights that might be included in the property register?

Answer 18

Right of way, service media, right of light, and excluded rights.

Question 19

If rights are fully extracted in the property register, what does this mean?

Answer 19

There is no need to refer to the original document.

Question 20

What are filed documents?

Answer 20

Documents that contain rights not extracted in the property register.

Question 21

What are the key elements of the proprietorship register?

Answer 21

Registered proprietor’s name and address and the class of title.

Question 22

What are the different classes of title?

Answer 22

Title absolute, qualified title, possessory title, and good leasehold title.

Question 23

What does title absolute mean?

Answer 23

The owner has full, undisputed ownership.

Question 24

When is qualified title granted?

Answer 24

When there is a specific defect in the title.

Question 25

When is possessory title granted?

Answer 25

When the owner can prove possession but not ownership via documents.

Question 26

What should the buyer’s solicitor do if the class of title is anything other than title absolute?

Answer 26

Inform the client and explain implications, check the mortgage lender’s stance, consider title indemnity insurance, and explore upgrading the title.

Question 26

When is good leasehold title granted?

Answer 26

When the leaseholder lacks evidence of the landlord’s title.

Question 27

What are some examples of information that might be included in the proprietorship register in addition to the owner’s name and address and class of title?

Answer 27

Price paid or stated value, indemnity covenants, and restrictions on the right to sell.

Question 28

What is co-ownership?

Answer 28

When a property is owned by more than one person.

Question 29

How is a trust of land created?

Answer 29

When a property is co-owned.

Question 30

How do co-owners hold legal title?

Answer 30

As joint tenants.

Question 31

How can co-owners hold beneficial title?

Answer 31

As joint tenants or tenants in common.

Question 32

What is the difference between joint tenants and tenants in common?

Answer 32

Under a joint tenancy, if a co-owner dies their interest in the property automatically passes to the surviving owner. Under a tenancy in common, the deceased’s share passes according to their will or intestacy rules.

Question 33

How can co-owners declare how they wish to hold beneficial interest?

Answer 33

On the TR1 form.

Question 34

If co-owners choose to hold as tenants in common, what will be added to the proprietorship register?

Answer 34

A restriction.

Question 35

How can you tell from the proprietorship register whether co-owners hold beneficial interest as joint tenants or tenants in common?

Answer 35

If there’s no restriction, they hold as joint tenants. If there is a tenancy in common restriction, they hold as tenants in common.

Question 36

What happens to legal title upon the death of a joint proprietor?

Answer 36

It automatically passes to the surviving co-owner.

Question 37

What happens to beneficial title upon the death of a joint proprietor who holds beneficial interest as a joint tenant?

Answer 37

It automatically passes to the surviving co-owner.

Question 38

What happens to beneficial title upon the death of a joint proprietor who holds beneficial interest as a tenant in common?

Answer 38

The deceased’s share passes to their beneficiaries according to their will or intestacy rules.

Question 39

How can a surviving joint tenant sell a property?

Answer 39

Sign the contract and transfer deed and provide a copy of the deceased’s death certificate.

Question 40

How can a surviving tenant in common sell a property?

Answer 40

Appoint a second trustee, provide a copy of the deceased’s death certificate, and sign the contract and transfer deed.

Question 41

What is overreaching?

Answer 41

The process where beneficial interests are transferred to the money paid by the buyer.

Question 42

What does the charges register list?

Answer 42

Interests and rights that burden the property, such as mortgages, covenants, easements, and leases.

Question 43

Where must a legal mortgage be registered?

Answer 43

In the charges register.

Question 44

What does a mortgage entry in the charges register typically include?

Answer 44

The date of the mortgage and the name and address of the mortgagee (lender).

Question 45

What is included in the proprietorship register in relation to a mortgage?

Answer 45

A restriction preventing the owner from selling the property without the lender’s consent.

Question 46

What should the buyer’s solicitor do in relation to a mortgage on the property?

Answer 46

Ensure through early enquiries that the seller has sufficient funds to redeem the mortgage, make it a term of the contract that the mortgage will be redeemed on completion, and obtain an undertaking from the seller’s solicitor to redeem the mortgage on completion.

Question 47

What are the exceptions to the conflict of interest rule?

Answer 47

Substantially common interest and competing for the same objective.