PLP WK 1 Flashcards
What is the principle of caveat emptor?
It means “buyer beware.” The buyer is responsible for discovering any issues with the property.
Is the seller required to disclose defects in the property?
Not unless specifically asked.
What are the buyer’s solicitor’s responsibilities under caveat emptor?
Investigate title, conduct searches, and raise pre-contract enquiries.
What is the significance of exchanging contracts?
The buyer is legally bound. Withdrawal can result in financial penalties.
How can a buyer discover physical issues with the property?
By getting a survey.
What are the three key stages of a freehold property transaction?
Pre-exchange, pre-completion, and post-completion.
What happens during the pre-exchange stage of a freehold transaction?
The buyer decides to buy, the surveyor surveys the property, the solicitor investigates the title, and the buyer and seller exchange contracts.
What happens at the exchange of contracts?
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.
What happens during the pre-completion stage?
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.
What happens at completion?
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.
What happens during the post-completion stage?
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.
What are the steps for the seller in the pre-exchange stage?
Take instructions, prepare a draft contract, deduce title, answer pre-contract enquiries, and respond to title-related queries.
What are the steps for the buyer in the pre-exchange stage?
Take instructions, conduct pre-contract searches, investigate title, report on title to the client, and approve the draft contract.
What are the steps for the seller in the pre-completion stage?
Approve the purchase deed, reply to pre-completion requisitions, and prepare for completion.
What are the steps for the buyer in the pre-completion stage?
Prepare the purchase deed, issue pre-completion requisitions, carry out pre-completion searches, and prepare for completion.
What does the property register describe?
The property and any rights benefiting it.
What does the property register state?
Whether the property is freehold or leasehold and a description of the property.
What are some examples of rights that might be included in the property register?
Right of way, service media, right of light, and excluded rights.
If rights are fully extracted in the property register, what does this mean?
There is no need to refer to the original document.
What are filed documents?
Documents that contain rights not extracted in the property register.
What are the key elements of the proprietorship register?
Registered proprietor’s name and address and the class of title.
What are the different classes of title?
Title absolute, qualified title, possessory title, and good leasehold title.
What does title absolute mean?
The owner has full, undisputed ownership.
When is qualified title granted?
When there is a specific defect in the title.
When is possessory title granted?
When the owner can prove possession but not ownership via documents.
What should the buyer’s solicitor do if the class of title is anything other than title absolute?
Inform the client and explain implications, check the mortgage lender’s stance, consider title indemnity insurance, and explore upgrading the title.
When is good leasehold title granted?
When the leaseholder lacks evidence of the landlord’s title.
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?
Price paid or stated value, indemnity covenants, and restrictions on the right to sell.
What is co-ownership?
When a property is owned by more than one person.
How is a trust of land created?
When a property is co-owned.
How do co-owners hold legal title?
As joint tenants.
How can co-owners hold beneficial title?
As joint tenants or tenants in common.
What is the difference between joint tenants and tenants in common?
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.
How can co-owners declare how they wish to hold beneficial interest?
On the TR1 form.
If co-owners choose to hold as tenants in common, what will be added to the proprietorship register?
A restriction.
How can you tell from the proprietorship register whether co-owners hold beneficial interest as joint tenants or tenants in common?
If there’s no restriction, they hold as joint tenants. If there is a tenancy in common restriction, they hold as tenants in common.
What happens to legal title upon the death of a joint proprietor?
It automatically passes to the surviving co-owner.
What happens to beneficial title upon the death of a joint proprietor who holds beneficial interest as a joint tenant?
It automatically passes to the surviving co-owner.
What happens to beneficial title upon the death of a joint proprietor who holds beneficial interest as a tenant in common?
The deceased’s share passes to their beneficiaries according to their will or intestacy rules.
How can a surviving joint tenant sell a property?
Sign the contract and transfer deed and provide a copy of the deceased’s death certificate.
How can a surviving tenant in common sell a property?
Appoint a second trustee, provide a copy of the deceased’s death certificate, and sign the contract and transfer deed.
What is overreaching?
The process where beneficial interests are transferred to the money paid by the buyer.
What does the charges register list?
Interests and rights that burden the property, such as mortgages, covenants, easements, and leases.
Where must a legal mortgage be registered?
In the charges register.
What does a mortgage entry in the charges register typically include?
The date of the mortgage and the name and address of the mortgagee (lender).
What is included in the proprietorship register in relation to a mortgage?
A restriction preventing the owner from selling the property without the lender’s consent.
What should the buyer’s solicitor do in relation to a mortgage on the property?
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.
What are the exceptions to the conflict of interest rule?
Substantially common interest and competing for the same objective.
