Pre-completion, completion and post (registered land) Flashcards
After exchange of contracts, the transfer deed needs to be drafted and sent to seller’s solicitor for approval. What is the form called that is used?
TR1
In event that a second trustee needs to be appointed what wording needs to be included in panel 11?
For the purpose of giving a valid receipt for the purchase price, [NAME OF SOLE PROPRIETOR] (‘Current Trustee’) in exercise of the power under section 36(6) of the Trustee Act 1925 appoints [NAME OF ADDITIONAL TRUSTEE] to be a trustee of the Property with the Current Trustee.’
What form needs to be sent next/ with the TR1?
TA13 which buyer sends to seller’s sol to confirm undertakings and practical information:
- Undertaking that seller’s sol will forward sufficient monies for the discharge of the mortgage immediately on completion taking place.
- Seller’s completion statement setting out balance of funds required for completion.
- Bank details of seller’s sol.
- Where keys are to be collected from.
What are the steps in regards to finance that both sides must take post exchange of contracts?
- Seller’s sol completion statement - usually in TA13.
- Buyer’s financial statement to buyer - total cost of transaction for buyer including legal fees, SDLT, registration fees etc
- Paramount that the sources of funding for buyer are all cleared prior to completion - in house accounting, cheque clearances, notice to bank if on deposit…
(Large commercial transactions may come from merchant lender (pension fund or insurance co) - time for clearing again needs to be considered) - Certificate of title - the draft form was sent prior to exchange, (the final signed form sent at completion) - buyer’s sol chases up to ensure funds will be available on completion date
What part of the SRA code should you bare in mind regarding the potential to act for lender and borrower? Dealt with in detail in SGS 5.
O(3.5) - not permitted to act for more than one party where there is a significant risk of client conflict.
Why is it essential that you carry out an OS1 post exchange and pre-completion?
- To check whether any adverse entries have been made on the register since the buyer’s first search/ search from date of the OCs. e.g. new mortgages, easements, covenants, or deed of variation on an easement.
- Provides a priority period of 30 working days within which the buyer can register the sale and take free of any other entries made in that period.
Why should a solvency search be made against a company on the morning of completion?
Whilst you will have already conducted a solvency search, as this does not confer a priority period it is best practice to update this on morning of completion.
It is prudent to discover if company’s assets have any floating charges pending insolvency and if liquidator has been appointed!
What are the three steps the seller’s sol must do pre-completion?
- Reply to buyer’s sol TA13.
- Which also involves preparing a completion statement for buyer’s sol re final amount required for completion.
- Request redemption statement from seller’s lender if there is a mortgage which needs to be discharged.
- Agree the TR1 and arrange for it to be executed by the seller.
Once the TR1 is agreed by both seller and buyer what will the buyer’s solicitor send to the seller’s sol?
- An ‘engrossment’ of the TR1 i.e. the final form of the TR1 for execution by the seller.
What requirements for proper execution of a deed are set out in s.1(3) of the LP(MP)A 1989?
An instrument is validly executed as a deed by an individual if, and only if -
- Signed, in presence of a witness who attests the signature (signature of witness plus name, address, occupation)
OR
- signed at their direction in their presence and the presence of TWO witnesses
AND
- is delivered as a DEED (it must state it is a deed on its face) by them or person authorised to do so - also will say ‘signed as a deed’ or ‘Executed as a Deed’
What wording would you expect in a valid execution clause of an individual?
Signed as a deed and delivered by [name] …………
In the presence of:
Signature of Witness: …………..
Name:
Address:
Occupation:
What act and which sections governs execution clauses for companies?
Companies Act 2006 ss. 44(1) and (2).
Can execute by 2 authorised signatories or by one director in presence of independent witness.
What does a correct execution clause executed by 2 authorised signatories look like for companies?
Executed as a Deed by [X Limited] acting by [a director and its secretary] / [two directors]
Signature [director] ………
Signature [director / secretary] ……….
What does a correct execution clause of one director and independent witness look like?
Executed as a Deed by [X Ltd] acting by a director in the presence of:
[Signature of director] ………………
Signature of a Witness: ………………………
Name:
Address:
Occupation:
If there is a delay of completion how do you calculate compensation?
Contract rate of purchase price minus any deposit paid for the period between agreed completion and actual. This is all days of the week!
Remember if using SCPC default position is by 2pm. So if completion is after then this effectively means an extra day!
