Property Flashcards
What is found in the Land Registry Official Copies of a Property?
Property Register, Proprietorship Register & Charges Register
What is detailed in the Property Register?
Describes the property
Details any rights benefitting the property
What is detailed on the Proprietorship Register?
Proprietor’s name and address
Class of title
Entries affecting ownership: indemnity covenants for positive covenants; restrictions on the seller’s right to sell e.g. if co-owners have notified that they hold it beneficially as tenants in common
What is detailed on the Charges Register?
Rights burdening the property
What are the requirements for a good root of title? (hint: ABCD)
Adequately describes extent of property
Be dated more than 15 years ago
Casts no doubt on seller’s title
Deals with legal & beneficial title
What are the formalities required for a deed?
Clear on face that it’s intended to be a deed
Delivered i.e. dated
Signed (either by individual in presence of a witness, or for a company, 2 directors OR 1 director & company secretary)
What are the different classes of title?
Title Absolute: best class; no issues
Qualified Title: specific defect in title
Possessory Title: registered proprietor has shown physical possession, but not title deeds
Good Leasehold Title: (leasehold only) leaseholder cannot provide evidence of the landlord’s title to the land
What are the requirements for a legal mortgage?
Created by deed
Entered in the Charges Register
(A lender may also require a restriction in Proprietorship Register to prevent them selling w/o their consent)
Are positive covenants appearing on the charges register always binding on the property?
No - have to check whether positive covenant affects the property, involving checking whether there is a chain of indemnity
What 4 standard pre-contract searches are there?
Local Search: enquiries of local authority (CON29) & search of local land charges (LLC1)
Drainage and Water Enquiries: public sewers & whether property is connected to a mains water supply
Desktop Environmental Search: indicates if land has been used for potentially contaminative uses; likelihood of flooding; natural subsidence; industrial land uses within 250m
Chancel Repair Liability: for properties in parishes
What are the standard searches relating to title or seller?
Land Charges Search (K15): unregistered land
Search of the Index Map: unregistered land or registered land subject to mineral rights) - shows extent of title/land
Companies Search: if company is a seller, check if they are in existence
MapSearch: free searchable map of registered titles
Bankruptcy Search (K16): appropriate if transaction is not at full market value OR buyer is taking out a mortgage (this is to protect the lender)
What does the CON29 standard enquiries of local authority reveal?
Planning consents, refusals & completion notices
Building regulations
Roads & public rights of way: whether roads adjacent to property are adopted
NB Highways Search: exact boundary between property and highway
Contamination: whether local authority has served a notice regarding contaminated land - consider this with Desktop Environmental Search
What does the LLC1 search reveal?
Whether planning permissions or consents have been granted
If the property is in a conservation area
Tree Preservation Order
Smoke control order
Listed Building Charge
When is a Cheshire Salt search necessary?
Property is in area that could be subject to brine subsidence
When is an Environmental Phase 1 Survey necessary?
More detailed than a desktop environmental search, including a site inspection
When is an Environmental Phase S Survey Necessary?
Where the Phase 1 Survey indicates a risk of contamination
What is a Flood Search?
Reveals whether there have been floods in the past
When is a utility providers search necessary?
Property is a new development or a site for development
Checks whether the site has benefit of utility providers
What is the form for pre-contract enquiries for commercial properties?
CPSE (replies to this are CPSE1 (& 2, 3 etc))
What is the form for pre-contract enquiries for residential property?
If Law Society Conveyancing Protocol is adopted, standard forms are Property Information (TA6) and Fittings and Content (TA10)
What necessary lending documents are there for a mortgage?
Mortgage Offer (or Facility Letter): formal offer to lend; sets outs T&Cs of loan
Certificate of Title: solicitor certifies that property is satisfactory for lending
Legal Charge: deed that creates security interest & is registered at LR
What are the differences between Report on Title and Certificate of Title?
Report on Title: for the buyer client vs Certificate of Title: for lender
Report on Title: done before exchange vs Certificate of Title: draft before exchange but final form sent just before completion to release mortgage funds
What are the requirements for a contract for land?
In writing
Incorporate all terms expressly agreed
Signed by, or on behalf of, all parties
What are latent incumbrances?
Rights burdening the property that aren’t apparent on inspection
What is title guarantee? What are the 2 types?
An exception to caveat emptor
Full Title: default one; property is free of all incumbrances other than those disclosed or those reasonably didn’t know about
Limited Title: given by sellers with limited knowledge of property (e.g. executors of deceased’s estate) - seller is only guaranteeing what has occurred during their own period of ownership, not rights before that
What is no title guarantee and the consequence for the buyer?
Seller doesn’t guarantee its right to sell the property or that the property is free of incumbrances
Consequence: buyer has no remedy against seller if issue arises
For standard conditions of sale, which specified incumbrances does the seller need to disclose?
Those registered at the Land Registry
Those on the Land Charges Registry (for unregistered land)
Those at Companies House
- if they don’t they are in breach
For standard commercial property conditions, how is the buyer deemed to buy the property in relation to specified incumbrances?
They are deemed to buy subject to any incumbrances which would be revealed by a prudent buyer’s search and enquiries i.e. it’s on the buyer
What are special conditions?
The method in which standard conditions of sale can be amended, excluded or supplemented
Who must register for VAT?
Businesses with a taxable turnover of more than £85,000
Who can voluntarily register for VAT?
Businesses with taxable turnover of less than £85,000
What is the advantage of registering for VAT?
Can offset input tax against output tax
What is output and input tax?
Output: VAT charged to clients
Input: VAT paid by business for g/s
If a VAT registered business sells property that is standard rated supply, what must it do? What type of tax is this?
It must charge VAT on top of purchase price
VAT on the land it sells is output tax
If a VAT registered business had to pay VAT in purchasing property, what type of tax is this?
Input tax (can be offset against output tax)
Until exchange, what are the parties’ loss’ limited to?
Whatever costs/expenses they’ve incurred in expectation of selling/buying the property
How does exchange normally take place?
Via telephone call (Law Society Formula B)
What are 5 consequences of exchange?
Risk passes to the buyer & they should make sure to have insurance
Buyer has equitable interest in property & should be protected (either notice on register or c(iv) land charge)
Deposit held as stakeholder for seller
Each solicitor prepares memorandum of exchange
Make arrangements for completion e.g. certificate of title
What pre-completion search should be done for registered land? What does it do?
Either OS1 or OS2 (for part of land)
Confers priority period of 30 working days, updating official copies and identifying any changes
What pre-completion search should be done for unregistered land? What does it do?
Land charges search of Land Charges Registry (K15)
Confers priority period of 15 working days, identifying any incumbrances or other adverse matters
What solvency searches may need to be done pre-completion?
Bankruptcy Search (K16): if acting for buyer and lender
Company Search: if either buyer (lender will want to know) or seller (buyer will want to know) is a company
What are requisitions on title?
Questions the buyer’s solicitor needs answering before completion
How does completion normally happen now?
By post (Law Society Code for Completion by Post)
What should the buyer’s solicitor do post-completion?
Settle stamp duty
Register buyer’s title at Land Registry
Register charge at Companies House
What is the timing requirement for registering a charge at Companies House?
Must be registered within 21 days of the creation of the charge
What are the timing requirements for SDLT and LTT?
SDLT: within 14 days of completion (or effective completion)
LTT: within 30 days of completion (or effective completion)
What is the consequence of failing to register charge at CH within time limit, or at all?
Void against liquidator/administrator and lender isn’t protected - no extension is available
Will have to apply for a court order allowing the filing out of time
What form is used to register the buyer’s title at the Land Registry?
Form AP1
What Land Registry deadlines are there for registering title post-completion?
For registered land, none, other than the priority period (which isn’t really a deadline as such)
For unregistered land, 2 months from completion
What happens if title to unregistered land is not registered within the deadline?
The transaction is void
An application must then be made to extend the period
What are the 4 remedies for delayed completion?
Contractual Compensation: interest for each day’s delay
Common Law Damages: any interest received under contractual compensation is deducted
Notice to Complete: parties must then complete within 10 working days
Rescission: contract set aside & parties put back in position before contract
What’s the purpose of an agreement for lease?
When both parties want to commit to the lease but either, they aren’t ready, or conditions must be satisfied prior
What enquiries will a tenant’s solicitor make?
CPSE1 & CPSE3 (specific to a grant of lease)
What is detailed in the completion statement?
Money due on completion, including any apportioned annual rent, service charge and insurance rent
What pre-completion searches are there for leases?
OS1: lease of whole
OS2: lease of part
OS3: non-registrable leases - doesn’t confer priority but checks if landlord is free to grant the lease
What are the requirements for registration of leases?
Up to 3 Years: no need to be registered & can’t be noted against title
> 3 years < 7 years: doesn’t need to be registered but can be noted against title (schedule of leases)
< 7 years: must be registered & can be noted against title
Where there is a lease of part, how will insurance be recovered from the tenant?
Landlord will pay whole insurance and the tenant will pay a proportionate amount of the insurance premium
Where there is a lease of whole, how will insurance be recovered from the tenant?
Tenant refunds the landlord for the whole insurance premium
Who normally always pays for insuring a building in commercial leases?
The landlord
What are the 4 types of rent review?
- Stepped Rent: lease outlines increase in rent in future
- Index-Linked Rent: increased rent by reference to an agreed measure of inflation
- Turnover Rent: rent calculated based on tenant’s turnover at property
- Open-Market Rent Review: based on comparable premises + terms of hypothetical lease (taking into account basic assumptions & common disregards)
How is new rent documented after a rent review?
In a rent review memorandum
What is the statutory right to carry out improvements?
A tenant can serve notice on landlord of its intention to carry out improvements on the property. If the landlord objects, they can apply for court permission.
If the landlord doesn’t respond within 3 months, they can carry out improvements
This can circumvent absolute covenants against alterations
What is a licence for alterations?
It is how consent for alterations is documents - details the work consented to, time limits for completing said works, any conditions etc.