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SQE - Elmina M > Property > Flashcards

Property Flashcards

1
Q

What is found in the Land Registry Official Copies of a Property?

A

Property Register, Proprietorship Register & Charges Register

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2
Q

What is detailed in the Property Register?

A

Describes the property
Details any rights benefitting the property

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3
Q

What is detailed on the Proprietorship Register?

A

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

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4
Q

What is detailed on the Charges Register?

A

Rights burdening the property

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5
Q

What are the requirements for a good root of title? (hint: ABCD)

A

Adequately describes extent of property
Be dated more than 15 years ago
Casts no doubt on seller’s title
Deals with legal & beneficial title

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6
Q

What are the formalities required for a deed?

A

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)

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7
Q

What are the different classes of title?

A

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

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8
Q

What are the requirements for a legal mortgage?

A

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)

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9
Q

Are positive covenants appearing on the charges register always binding on the property?

A

No - have to check whether positive covenant affects the property, involving checking whether there is a chain of indemnity

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10
Q

What 4 standard pre-contract searches are there?

A

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

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11
Q

What are the standard searches relating to title or seller?

A

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)

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12
Q

What does the CON29 standard enquiries of local authority reveal?

A

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

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13
Q

What does the LLC1 search reveal?

A

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

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14
Q

When is a Cheshire Salt search necessary?

A

Property is in area that could be subject to brine subsidence

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15
Q

When is an Environmental Phase 1 Survey necessary?

A

More detailed than a desktop environmental search, including a site inspection

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16
Q

When is an Environmental Phase S Survey Necessary?

A

Where the Phase 1 Survey indicates a risk of contamination

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17
Q

What is a Flood Search?

A

Reveals whether there have been floods in the past

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18
Q

When is a utility providers search necessary?

A

Property is a new development or a site for development
Checks whether the site has benefit of utility providers

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19
Q

What is the form for pre-contract enquiries for commercial properties?

A

CPSE (replies to this are CPSE1 (& 2, 3 etc))

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20
Q

What is the form for pre-contract enquiries for residential property?

A

If Law Society Conveyancing Protocol is adopted, standard forms are Property Information (TA6) and Fittings and Content (TA10)

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21
Q

What necessary lending documents are there for a mortgage?

A

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

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22
Q

What are the differences between Report on Title and Certificate of Title?

A

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

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23
Q

What are the requirements for a contract for land?

A

In writing
Incorporate all terms expressly agreed
Signed by, or on behalf of, all parties

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24
Q

What are latent incumbrances?

A

Rights burdening the property that aren’t apparent on inspection

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25
Q

What is title guarantee? What are the 2 types?

A

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

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26
Q

What is no title guarantee and the consequence for the buyer?

A

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

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27
Q

For standard conditions of sale, which specified incumbrances does the seller need to disclose?

A

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

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28
Q

For standard commercial property conditions, how is the buyer deemed to buy the property in relation to specified incumbrances?

A

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

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29
Q

What are special conditions?

A

The method in which standard conditions of sale can be amended, excluded or supplemented

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30
Q

Who must register for VAT?

A

Businesses with a taxable turnover of more than £85,000

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31
Q

Who can voluntarily register for VAT?

A

Businesses with taxable turnover of less than £85,000

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32
Q

What is the advantage of registering for VAT?

A

Can offset input tax against output tax

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33
Q

What is output and input tax?

A

Output: VAT charged to clients
Input: VAT paid by business for g/s

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34
Q

If a VAT registered business sells property that is standard rated supply, what must it do? What type of tax is this?

A

It must charge VAT on top of purchase price
VAT on the land it sells is output tax

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35
Q

If a VAT registered business had to pay VAT in purchasing property, what type of tax is this?

A

Input tax (can be offset against output tax)

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36
Q

Until exchange, what are the parties’ loss’ limited to?

A

Whatever costs/expenses they’ve incurred in expectation of selling/buying the property

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37
Q

How does exchange normally take place?

A

Via telephone call (Law Society Formula B)

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38
Q

What are 5 consequences of exchange?

A

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

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39
Q

What pre-completion search should be done for registered land? What does it do?

A

Either OS1 or OS2 (for part of land)
Confers priority period of 30 working days, updating official copies and identifying any changes

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40
Q

What pre-completion search should be done for unregistered land? What does it do?

A

Land charges search of Land Charges Registry (K15)
Confers priority period of 15 working days, identifying any incumbrances or other adverse matters

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41
Q

What solvency searches may need to be done pre-completion?

A

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

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42
Q

What are requisitions on title?

A

Questions the buyer’s solicitor needs answering before completion

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43
Q

How does completion normally happen now?

A

By post (Law Society Code for Completion by Post)

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44
Q

What should the buyer’s solicitor do post-completion?

A

Settle stamp duty
Register buyer’s title at Land Registry
Register charge at Companies House

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45
Q

What is the timing requirement for registering a charge at Companies House?

A

Must be registered within 21 days of the creation of the charge

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46
Q

What are the timing requirements for SDLT and LTT?

A

SDLT: within 14 days of completion (or effective completion)
LTT: within 30 days of completion (or effective completion)

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47
Q

What is the consequence of failing to register charge at CH within time limit, or at all?

A

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

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48
Q

What form is used to register the buyer’s title at the Land Registry?

A

Form AP1

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49
Q

What Land Registry deadlines are there for registering title post-completion?

A

For registered land, none, other than the priority period (which isn’t really a deadline as such)
For unregistered land, 2 months from completion

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50
Q

What happens if title to unregistered land is not registered within the deadline?

A

The transaction is void

An application must then be made to extend the period

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51
Q

What are the 4 remedies for delayed completion?

A

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

52
Q

What’s the purpose of an agreement for lease?

A

When both parties want to commit to the lease but either, they aren’t ready, or conditions must be satisfied prior

53
Q

What enquiries will a tenant’s solicitor make?

A

CPSE1 & CPSE3 (specific to a grant of lease)

54
Q

What is detailed in the completion statement?

A

Money due on completion, including any apportioned annual rent, service charge and insurance rent

55
Q

What pre-completion searches are there for leases?

A

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

56
Q

What are the requirements for registration of leases?

A

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

57
Q

Where there is a lease of part, how will insurance be recovered from the tenant?

A

Landlord will pay whole insurance and the tenant will pay a proportionate amount of the insurance premium

58
Q

Where there is a lease of whole, how will insurance be recovered from the tenant?

A

Tenant refunds the landlord for the whole insurance premium

59
Q

Who normally always pays for insuring a building in commercial leases?

A

The landlord

60
Q

What are the 4 types of rent review?

A
  1. Stepped Rent: lease outlines increase in rent in future
  2. Index-Linked Rent: increased rent by reference to an agreed measure of inflation
  3. Turnover Rent: rent calculated based on tenant’s turnover at property
  4. Open-Market Rent Review: based on comparable premises + terms of hypothetical lease (taking into account basic assumptions & common disregards)
61
Q

How is new rent documented after a rent review?

A

In a rent review memorandum

62
Q

What is the statutory right to carry out improvements?

A

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

63
Q

What is a licence for alterations?

A

It is how consent for alterations is documents - details the work consented to, time limits for completing said works, any conditions etc.

64
Q

What happens to qualified covenants against alterations that amount to improvements?

A

They are converted into fully qualified covenants by s19(2)
The landlord can however, require payment of compensation for any loss in value; reinstatement of premises at end of lease if reasonable; payment of landlord’s expenses in giving consent

65
Q

Can statute convert qualified user covenants into fully qualified ones?

A

No

66
Q

What statutory principle applies to user covenants in a lease?

A

S19(3): prevents landlord from demanding payment for granting its consent
However, landlord can recover costs of granting consent
They can also increase rent/charge tenant for lump sum in return for consent where the change of use also involves a structural change

67
Q

If term of lease is ‘from and including’ x date of the year, when does the term expire?

A

The day before x date in the relevant year

68
Q

If the term of the lease is ‘from’ x date of the year, when does the term start? When does the term expire?

A

Start: day after x date
Expire: x date in relevant year

69
Q

What qualified lease covenants can be converted into fully qualified covenants by statute?

A

Alterations
Assignment
Underletting

70
Q

When would it be reasonable for a landlord to withhold consent for assignment/underletting?

A

Justifiable concerns about proposed assignee’s ability to pay rent
Assignee’s proposed use of premises

71
Q

When would it be unreasonable for a landlord to withhold consent for assignment/underletting?

A

Grounds unrelated to the tenant/landlord relationship e.g. personal dislike for assignee/undertenant or business; race, sex, disability etc.

72
Q

If a lease is silent on assignment or underletting, what can the tenant do?

A

They are free to assign/underlet

73
Q

On assignment, who is the landlord of the assignee?

A

The original landlord

74
Q

On underletting, who is the landlord of the subtenant?

A

The original tenant

75
Q

Where does privity of contract and estate exist in underletting?

A

Between tenant and landlord, and between tenant and subtenant (for both privities)

There is

76
Q

Where does privity of contract and estate exist in underletting?

A

Between tenant and landlord, and between tenant and subtenant (for both privities)

There is NO privity of contract/estate between landlord and subtenant

77
Q

What is a remedy to there being no privity of contract/estate between landlord and subtenant in underletting?

A

A licence to underlet, with direct covenants between landlord and subtenant

78
Q

What are 2 other forms of alienation other than assignment and underletting?

A

Charing the Lease
Sharing Occupation

79
Q

How is title deduced for leases? (2 ways depending on something)

A

If registered, send official copies of the leasehold title
If not registered, send landlord’s title

80
Q

What are old and new leases?

A

Old lease: before 1st January 1996
New lease: on or after 1st January 1996

81
Q

What happens with leasehold covenants upon assignment with old leases?

A

Original tenant remains liable due to privity of contract
Privity of estate means that only covenants that ‘touch and concern’ the land are enforceable against successors

82
Q

What happens with covenants upon assignment with new leases?

A

Tenant is automatically released from tenant covenants (except where it’s an excluded assignment) - former tenant not liable unless entered into an AGA
Landlord is not automatically released where reversion is assigned - has to apply to be released
Automatic transmission of benefits/burdens of covenants for successors (apart from covenants expressed to be personal)

83
Q

What should a former tenant who entered into an AGA, ask from the assignee?

A

That the assignee enter into an indemnity covenant, promising to pay rent and perform all covenants for remainder of lease - so former tenant can sue them if they breach this and recoup damages former tenant paid out to landlord

84
Q

What remedies are there for breach of leasehold covenants?

A

Damages
Specific Performance
Forfeiture
Self-Help/Jervis v Harris
Commercial Rent Arrears Recovery
Guarantor & Rent Deposit
Action in Debt

85
Q

What are the disadvantages of an action in debt and damages as remedies?

A

As they are issuing court proceedings, they can be costly and time consuming

86
Q

When can Commercial Rent Arrears Recovery be used?

A
  1. Premises are commercial
  2. 7 days minimum principal rent is owed (VAT and interest can also be recouped but not service charge)
  3. Lease has NOT been forfeited
87
Q

What is the procedure for CRAR?

A
  1. Landlord appoints enforcement agent
  2. Serve 7 clear days’ notice of intention to enter premises
  3. If notice expires without repayment, agent goes in and takes goods up to value of debt owed
  4. Has to give 7 days notice again if landlord wishes to sell any of these goods
88
Q

What is the self-help/Jervis v Harris clause?

A

Landlord can enter the premises, carry out repairs and then recover that cost from the tenant

89
Q

What is a ‘tenant at will’?

A

An unprotected tenant who the landlord agrees to them remaining in occupation of the premises

90
Q

How does a break clause work with a protected tenancy where the landlord exercises the break?

A

Only brings an end to the contractual term - the tenant can still hold over

91
Q

Where the tenant exercises a break clause with a protected tenancy, what happens?

A

Break clause is effective as usual

92
Q

What’s the difference between building regulation and planning permission?

A
93
Q

What property is standard rated for VAT?

A

Newly constructed commercial property less than 3 years old
Older commercial property opted to tax

94
Q

What property is zero rated for VAT?

A

Newly constructed residential property (buyer pays no VAT but seller can recover input tax)

95
Q

What property is exempt from VAT?

A

Residential property (except newly constructed)
Older commercial property not opted to tax

96
Q

For Property Residence Relief to apply for CGT, what are the requirements?

A

1 home and its the main home
Have not let part of it out
Have not used part of it for business only
Grounds are less than 5,000 square metres
Didn’t buy it just to make a gain

97
Q

What absences are disregarded for Property Residence Relief?

A

Last 9 months of ownership
First 12 months of ownership
Any period totalling more than 3 years
Any period where owner was employed outside of the UK
Any period not more than 4 years where owner was required to live elsewhere because of work

98
Q

What are 4 methods of terminating a lease?

A

Effluxion of Time
Notice to Quit (periodic tenancies only)
Merger
Surrender

99
Q

What is a merger? What is a surrender? (terminating a lease)

A

Merger: either tenant acquires landlord’s interest or third party acquires both
Surrender: tenant gives up leasehold interest to the landlord

100
Q

What are 2 ways surrender can take place?

A

Express Surrender: made by deed; premium paid depending on who has most to gain
Surrender by Operation of Law: where both act incompatibly with continuation of tenancy

101
Q

How does effluxion of time and notice to quit work with protected tenancies?

A

Tenant can still hold over (as long as landlord either exercises break clause (effluxion of time) or landlord serves notice (notice to quit) - has to be landlord)

102
Q

What are the requirements for security of tenure?

A

Tenancy (Street v Mountford)
Tenant is in occupation of property
Business (trade, profession or employment - purpose doesn’t have to be to make a profit)

103
Q

What tenancies are excluded from security of tenure?

A

Agricultural Holding
Mining tenancy
Fixed tenancy of 6 months or less
Service tenancies

104
Q

If a tenant underlets a protected tenancy, what happens?

A

Protection is lost
If they underlet part, that part loses the protection

105
Q

What are the requirements for contracted out tenancies?

A
  1. Warning Notice by Landlord: at least 14 days before tenant is bound to enter lease
  2. Tenant Declaration: simple if > 14 days; statutory if < 14 days
  3. Lease Wording: parties agree to exclude protection + reference to warning notice and declaration
    Also, only fixed tenancies can be contracted out
106
Q

How can a landlord end a lease with security of tenure?

A
  1. Forfeit if there have been breaches of covenants
  2. S25 Notice (Friendly or Hostile): states when current tenancy will end; must be served no less than 6 months & no more than 12 months than date of termination
107
Q

What is a s25 friendly notice?

A

Where landlord is willing to renew a protected lease, day after the current lease ends
Proposes rent & principal terms

108
Q

What is a s25 hostile notice?

A

Where landlord opposes renewal of the lease
6 Grounds to Oppose: persistent & serious breach of repair obligation; persistent delay in rent; other substantial tenant breaches; suitable alternative accommodation; intention to demolish or substantial construction; landlord wants to occupy

109
Q

What are the mandatory grounds to oppose renewal for a s25 hostile notice?

A

Suitable alternative accommodation
Intention to demolish or substantial construction
Landlord wants to occupy

110
Q

What are the discretionary grounds to oppose renewal for a s25 hostile notice?

A

Breach of repair obligation
Persistent delay in rent
Other substantial tenant breaches

111
Q

What 4 ways can a tenant end a lease with security of tenure?

A
  1. Simply vacate at end of contractual term
  2. If periodic tenancy, serve notice to quit
  3. S26 notice to renew lease
  4. S27 notice to leave
112
Q

What are the requirements for a s26 notice to renew the lease?

A

Protected tenancy
Original term of more than 1 year
Minimum notice period of 6 months and max of 12 months from proposed commencement date of renewal lease
– Landlord then has 2 months to serve counter-notice (if want to oppose)

113
Q

What are the requirements for a s27 notice?

A

Must give 3 months notice of intended termination date that is no earlier than end of contractual term
No other notices can be served by either party after this

114
Q

What procedure should be followed after a s25 notice?

A

Either party may apply to court
Deadline for application is date of termination in lease

115
Q

What procedure should be followed after a s26 notice?

A

Parties my apply if: (a) landlord serves counter-notice (b) 2 months have elapsed
Deadline for application is day before proposed commencement date

116
Q

If court grants new lease after notice, what are the terms it can make?

A

Lease term of up to 15 years
Open market rent

117
Q

What is ‘development’?

A

Carrying out certain building works on land or a material change of use of the land

118
Q

When is planning permission needed? What are the exceptions?

A

Whenever there’s development on land
Exceptions: only interior building works; works that don’t materially affect external appearance; change of use within same use class

119
Q

What is ‘permitted development’?

A

GPDO allows for certain development without planning permission if it falls within certain conditions
GPDO can be excluded/amended by a locality so should be checked

120
Q

What is a ‘certificate of lawfulness’?

A

To confirm whether works constitute development and whether it falls within GPDO - if unsure whether GPDO applies

121
Q

What is listed buildings consent?

A

Separate from planning permission
Needed for demolishing, altering or extending listed property

122
Q

When is planning permission stricter?

A

For listed buildings and conservation areas

123
Q

What is Building Regulation?

A

Applies to building work of (a) erection/extensions of buildings (b) work required with material change of use
Separate to planning permission
Regulates issues to do with health and safety e.g. structural integrity, fire escape, stairwells etc
Consent is needed to carry out works

124
Q

How does one enforce breaches of development/planning permission?

A

Enforcement Notice: 28 days notice to restore land and/or comply with conditions/limitations of permission - landowner can be fined if not done in 28 days
Stop Notice: after enforcement notice, requires specific activity to stop immediately
Injunction: local authority applies to court
Breach of Condition Notice: similar to enforcement notice but for breach of conditions/limitations to permission

125
Q

What time limits are there for enforcing breaches of planning permission?

A

4 Years: building works & change of use to single dwelling houses
10 Years: other changes of use & breach of planning conditions
When breach was deliberately concealed, time limits don’t apply

126
Q

What options are there for enforcing breaches of building regulations?

A

Prosecution (have 6 months to prosecute)
Enforcement Notice (have 1 year to serve notice)
Injunction (if works unsafe, no time limit)

127
Q

Why should a buyer’s solicitor always check for breaches of planning permission/building regulations?

A

Enforcement is against the landowner

SQE - Elmina M (9 decks)

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