Pre-completion steps relevant to a freehold and/or leasehold property transaction

Question 1

Form of transfer of deed and formalities of execution:

Answer 1

*Transfer document normally prepared by buyer’s solicitor
UNLESS seller’s solicitor HAS included a draft in the contract bundle
AND should be sent to the seller at least 12 working days BEFORE completion date.
*Seller’s solicitor WILL reply with any queries within 4 working days.
*Transfer MUST be a deed – MUST state it is a deed, signed by the parties
AND delivered to transfer a legal estate in land.
*Registered land – MUST comply with HMLR requirements, Form TR1.
*Unregistered land – no prescribed form of conveyance exists, buyer AND seller will agree wording to reflect the terms of the contract.
*Transfer MUST always be signed by seller.
*Buyer signs where it contains a covenant OR declaration on the buyer’s behalf.
*Any plans SHOULD be attached to the transfer OR conveyance AND be signed.

Question 2

Formalities of execution of a deed -
Individuals:

Answer 2

For an individual to validly execute a deed, the instrument MUST be:
Signed by the individual.
Presence of a witness who attests the signature.
Delivered as a deed.

Question 3

Formalities of execution of a deed - Companies:

Answer 3

Company CAN execute a document (including deed) by either:
Affixing its common seal
OR
By the signatures of:
Two authorised signatories (e.g., two directors OR director and secretary of company)
OR director of the company attested by a witness.

Question 4

Formalities of execution of a deed - Witness requirements:

Answer 4

Party to a deed CAN’T be an attestating witness.
No civil prohibition on a signatory’s spouse, co-habitee OR civil-partner from acting as a witness.
Independent witnessing SHOULD always be followed as a matter of best practice,
use of a relative who benefits from the document as witness SHOULD be avoided,
purpose of requiring a party’s signature to be witnessed is to provide unbiased evidence of what was signed, by whom AND when.
Only an individual CAN act as a witness, company CAN’T attest to the execution of a document.
Generally acceptable for an employee OR director of a company to witness that company’s signing.
Solicitor OR other person advising on the matter can be a witness.

Question 5

Pre-completion searches:

Answer 5

MUST be conducted as close as possible to the completion date to update the property investigation AND title position to ensure that:
Information obtained about the property from pre-exchange searches continues to remain correct
AND identify anything that CAN have changed.
The seller has not further encumbered the title.

Question 6

Pre-completion search shows an adverse entry, immediately ascertain what it relates to AND?

Answer 6

contact seller’s solicitor to seek an undertaking that it will be removed before completion.

Question 7

Summary of pre-completion searches:
All land acquisitions:
Companies house:

Answer 7

Buyer/seller is a company, MUST check company exists
AND has the power, capacity, AND authority to enter into the transaction.
PURPOSE

Online at CO HSE
FORM

Question 8

Summary of pre-completion searches:
All land acquisitions:
Companies court:

Answer 8

Buyer/seller is a company, telephone search at the Registry of Winding UP Petitions WILL reveal any recent winding up petitions,
administration orders OR other insolvency proceedings filed against the company.
PURPOSE

Telephone search at companies court
FORM

Question 9

Summary of pre-completion searches:
All land acquisitions:
Bankruptcy Only Search:

Answer 9

Acting for the lender, search against the name of an individual buyer/borrower
AND any guarantors of the mortgage being entered into in connection with the property.
PURPOSE

Online at Land Charges Department Form K16 (Official search for bankruptcy).
FORM

Question 10

Summary of pre-completion searches:
All land acquisitions:
Local search (3 searches submitted together to local authority):

Answer 10

Repeat the Local Search to Local Authority IF more than 3 months have passed since exchange.
General, local land charges search result that is MORE than 3 months old SHOULDN’T be relied on.
Local search DOESN’T confer a priority period.
PURPOSE

Form LLC1, Form CON29 (standard enquiries), Form CON290 (additional optional enquiries).
FORM

Question 11

Summary of pre-completion searches:
All land acquisitions:
Unregistered land:
Land charges search:

Answer 11

Search land charges department for encumbrances over unregistered land such as, easements, covenants, mortgages, estate contracts, AND home rights.

Form K15 search WILL also include a search of the bankruptcy index against the seller.
Check that no adverse entries have been made since the original search.
Updated search WILL ensure that the priority period (15 working days) covers completion of the transaction as the priority period of 15 working days conferred by the original search
CAN have expired by the time the parties are in a position to complete.
PURPOSE

Form K15 against the name of the seller for their period of ownership.
Result – form K18
FORM

Question 12

Summary of pre-completion searches:
All land acquisitions:
Registered land:
Official search with priority:

Answer 12

SHOULD be conducted at least 5 days BEFORE completion.
Property being purchased with a mortgage, conduct search in the name of the lender to protect buyer AND lender.
Official search alerts the applicant to alterations to the register, unexpired priority searches
AND pending third party applications MADE since obtaining official copies in pre-exchange searches.
Valid official search confers a priority period (30 days) from the date of the certificate in which to lodge the protected disposition
AND avoid creation of any adverse third-party interests in the intervening registration gap.
Buyer/lender WILL be protected against any subsequent entries which CAN be placed on the register AFTER the date of the search BUT before the buyer is registered as the owner.

Property unregistered AND disposing party has applied for first registration,
acquiring party SHOULD apply for an official search with priority against the pending first registration title at HMLR.
Official search against a pending first registration title made using a procedure similar to an official search AGAINST the registered title,
AND subject to the same general principles.
PURPOSE

Form 0S1 – if sale of whole of property (priority search)
Result – form 0SR1.
Form 0S2 – sale of part of property (priority search)
Result – form 0SR2.
FORM

Question 13

Pre-completion steps:
Buyer’s solicitor:
Pre-completion searches:

Answer 13

Carry out pre-completion searches

Question 14

Pre-completion steps:
Buyer’s solicitor:
Completion statement:

Answer 14

Check the completion statement (prepared by the seller) of the amount due to the seller on completion.
Check that it’s in a accordance with the terms of the contract AND that the seller’s solicitor has provided receipts for any payments that are being apportioned.
Buyer’s solicitor SHOULD then prepare a completion statement for the buyer that includes the monies due to the seller together with all the other expenses,
such as, SLDT OR LTT, AND HMLR fees, disbursements, AND solicitor fees.
Purchase is being financed by a loan, request the funds from the lender, AND any balance from the client.

Question 15

Pre-completion steps:
Buyer’s solicitor:
Raise requisitions on title:

Answer 15

Raise requisitions on title AKA completion requirements, with the seller’s solicitor.

Question 16

Pre-completion steps:
Buyer’s solicitor:
Draft transfer:

Answer 16

Prepare a draft transfer for approval by the seller’s solicitor.
Once transfer is agreed, prepare engrossments, send one duplicate part to the seller’s solicitor
AND arrange execution of the other duplicate part by the buyer.

Question 17

Pre-completion steps:
Buyer’s solicitor:
Execution of a new mortgage deed:

Answer 17

Acting for the incoming lender, arrange execution of mortgage deed AND only date at completion.

Question 18

Pre-completion steps:
Buyer’s solicitor:
Undertaking:

Answer 18

Undertaking given by the buyer’s solicitor to the outgoing lender,
to hold completion monies to lender’s order, where a transaction likely to complete outside banking hours.

Question 19

Pre-completion steps:
Seller’s solicitor:
Redemption statement:

Answer 19

Request a redemption statement from the current lender with the figure required to redeem the mortgage on the contractual completion date, with a daily rate in case completion is delayed.

Question 20

Pre-completion steps:
Seller’s solicitor:
Completion statement:

Answer 20

Prepare a completion statement for the amounts due on completion (including apportionments) to send to the buyer’s solicitor.

Question 21

Pre-completion steps:
Seller’s solicitor:
Reply to requisition on title:

Answer 21

Reply to requisitions on title though the SCS limit the buyer’s ability to raise requisitions on title to a period of 6 working days of becoming aware of a title issue
UNLESS varied by contract.

Question 22

Pre-completion steps:
Seller’s solicitor:
Approve transfer:

Answer 22

Approve the draft transfer that the buyer’s solicitor SHOULD have produced for approval.

Question 23

Pre-completion steps:
Seller’s solicitor:
Discharge of existing mortgage deed:

Answer 23

Arrange for the current mortgage of the outgoing lender to be discharged.

Question 24

Pre-completion steps:
Seller’s solicitor:
Undertakings:

Answer 24

Ensure that any necessary undertakings are given such as:
An undertaking to be given by the seller’s solicitors to the seller’s lender that they are holding the form DS1.
Form to cancel entries relating to a registered charge AND following completion WILL transfer the completion monies to the lender.
An undertaking to be given by the seller’s solicitor to the buyer’s solicitor confirming that they are holding the release documents executed by the lender
AND on receipt of the completion monies, they will hold them to the order of the buyer’s solicitors UNTIL completion.

Question 25

Pre-completion steps:
Seller’s solicitor:
Miscellaneous:

Answer 25

Agree place AND method of completion (in person OR by post).
Agreement arrangement for handing over keys (estate agents OR solicitors).
Prepare list of completion documents to be handed over which would include BUT is not limited to:
*Title deeds AND schedule of deeds if unregistered land.
*Executed transfer deeds (form TR1, if registered land).
*Original lease (on purchase of a lease).
*Form DS1 (for discharge of existing mortgage) OR an undertaking to from seller’s solicitor to discharge the mortgage as soon as completion monies received.