Property

Question 1

What priority period is conferred by a full land charges search result of an unregistered title?

Answer 1

15 working days

The buyer will be protected against (have priority over) applications for land charges against the owner’s name made during the 15-day period if the transaction completes within the 15-day period

Question 2

When must a mortgage charge be registered at Companies House?

Answer 2

Within 21 days after completion

Question 3

Index Map Search at the Land Registry

Answer 3

Contains information on all land and property that’s registered or being registered with HM Land Registry

Use it to find title number of a property that does not appear in a search of register

Use it if a property cannot be identified by a postal address e.g. in a rural area

Question 4

Reasons for discrepancy in title plan i.e. title plan does not reflect reality e.g. garden is shown as a rectangle on title plan but when viewing there was also a triangle area with a shed

Answer 4

1. The triangular area could be registered under a separate title number in sellers name
2. The triangular area could be registered under a separate title number in someone else’s name
3. The seller could have an unregistered title to the triangular area
4. The triangular area could be owned by someone else but the seller always used it as part of their garden

Question 5

Under the unregistered land system, subsequent purchasers are bound by legal interests which burden the land even if they do not have notice of the legal interest

Question 6

In the unregistered land system, an equitable easement (such as a right of way) must be registered as a land charge to be effective against subsequent purchasers

Question 7

A property will have a charges register or a property register only if it is in the registered system

Question 8

Her Majesty’s Land Registry (‘HMLR’) will award an absolute leasehold title only when it has inspected all superior leasehold titles and the freehold title

Question 9

The Property Register indicates whether the title is freehold or leasehold, the address of the property, and details of any rights which benefit the land

Question 10

The Proprietorship Register indicates the current legal owners of the property

Question 11

The benefit of a legal easement must appear as a notice on the Property Register of the dominant tenement. The burden of the easement will appear on the landowner’s Charges Register.

Question 12

A buyer may take free of beneficiary’s interest under a trust through overreaching by paying the purchase money to a minimum of two trustees.

Question 13

If a head lease is ended by surrender, the subtenant will become the tenant of the head lease on the terms of the sublease and will have to pay rent due under the sublease to the head landlord.

Question 14

When does the power of sale arise on a property financed by a mortgage?

Answer 14

When the contractual date to redeem the mortgage has passed. However, the power of sale becomes exercisable only if one or more of the following is satisfied:
(1) interest payments are more than 2 months in arrears;
(2) there has been a written request for repayment of capital and 3 months have passed without payment;
(3) there is some other breach of mortgage term

Question 15

In what circumstances is the benefit of a covenant enforceable by a covenantee’s successors in title?

Answer 15

(1) the covenant touches and concerns the land of the covenantee;
(2) the covenant was intended to run with the legal estate held by the covenantee;
(3) when the covenant was made, the covenantee held the legal estate in the land to be benefitted;
(4) the assignee of the original covenantee now holds the legal estate i.e. freehold not leasehold estate

Question 16

Under the Trusts of Land and Appointment of Trustees Act 1996 (‘TLATA’), what is the position if more than 4 people buy land together?

Answer 16

The first 4 over 18 will hold the land as joint tenants on trust for all buyers.

Question 17

How is a parties’ beneficial interest as tenants in common protected on the register of title?

Answer 17

By a restriction on the proprietorship register

Question 18

A solicitors duty to act in best interests of client limits the solicitor from taking instructions if there is a conflict of interest. There would be a client conflict if a solicitor acted for a buyer and seller for the purchase of a property

Question 19

A solicitor is prohibited from telling a client that a particular mortgage is better than another

Question 20

Can a solicitor represent a buyer and lender?

Answer 20

Yes

Question 21

Under the General Prohibitions of the Financial Services and Markets Act 2000 a solicitor may only give a client generic advice regarding mortgages such as describing different types but may not advise on merits of one mortgage offer over another

Question 22

When is a Clear Certificate of Title required?

Answer 22

For lender to release mortgage funds

Question 23

What does a Certificate of Title do?

Answer 23

1. Confirm to lender that the title good and marketable
2. Requests release of mortgage advance

Question 24

Describe the four different types of mortgages

Answer 24

1. Repayment: repay some capital and interest each month
2. Interest only: pay interest each month and repay the capital at the end of the term
3. Endowment and pension: pay monthly premiums for the insurance or pension with intention that will have sufficient funds to pay off loan at end of term
4. Sharia compliant: alternative to other mortgages to address concerns about payment of interest

Question 25

How must a legal mortgage be created?

Answer 25

By deed

Question 26

Co-owners of a legal estate own as joint tenants

Question 27

How many legal owners of property can there be?

Answer 27

4 max

Question 28

When land is owned by more than oneperson a trust of land is automatically created and the co-owners have a beneficial equitable interest in the land

Question 29

How can equitable interest in land be held?

Answer 29

Joint tenants: undivided, equal interest in the whole of the property - survivorship

Tenants in common: undivided but can be unequal, no right to survivorship so share can be left in will

Question 30

Declaration of trust

Answer 30

Agreement between co-owners as to how their beneficial interest is held

Conclusive as to the agreement between co-owners

Question 31

A joint tenancy can be severed to convert the interest in to a tenancy in common

Question 32

How can a joint tenancy be severed to convert the interest in to a tenancy in common?

Answer 32

1. Notice in writing to other joint tenants of desire to sever
2. Treating their share as separate by contracting to sell share
3. Mutual agreement
4. Bankruptcy of one of the joint tenants

Question 33

If a conflict of interest is discovered before a retainer then instructions can be taken from only one client e.g. the one already represented

Question 34

Joint tenants own the whole of the property together and cannot leave a share in their will. On the death of the first proprietor to die, the whole property vests in the survivor.

Question 35

Tenants in common each own a separate share in the property which may be unequal and can be left in a will to someone

Question 36

The standard conditions of sale are used in residential transactions what is used in commercial transactions?

Answer 36

Standard commercial property conditions

Question 37

When do the standard conditions of sale provide that completion will take place?

Answer 37

20 working days after exchange by 2pm

Question 38

What are the three parts of the standard conditions of sale?

Answer 38

1. Particulars of sale
2. Standard conditions of sale
3. Special conditions

Question 39

Under the standard conditions of sale are the purchase price and contents price inclusive of VAT?

Answer 39

Yes

Question 40

Under the standard conditions of sale who holds the deposit?

Answer 40

The seller’s solicitor as stakeholder

Question 41

Under the standard conditions of sale what type of title guarantee must the seller provide?

Answer 41

Full title gurantee
- Seller is entitled to sell
- Seller will do all in their power to transfer the title to the buyer
- Selling free from all charges or encumbrances

Question 42

When does the risk of loss in the property pass to the buyer?

Answer 42

On exchange

Question 43

What is the buyer’s solicitors next steps once they receive the Standard Conditions of Sale?

Answer 43

Investigate title to ensure good title will be received

Identify any issues with the title that would adversely affect the buyer’s future plans

Question 44

If a seller has a related purchase of a property for their residence in England and Wales, they can use deposit received on their sale towards the deposit required on the related purchase

Question 45

What is surviorship?

Answer 45

Applies to joint tenants

On death a deceased’s interest automatically vests in the surviving joint tenant

Can’t leave share to someone in will

Question 46

What is the courts presumption if the intention of co-owners as to how they hold their beneficial interest is unclear?

Answer 46

Presume equity follows the law and beneficial interests are the same as legal interests in the property

Question 47

Even if the legal estate is held by one party there could be behind the scenes beneficial co-owners with a claim to the property

Question 48

How is a behind the scenes beneficial interest evidenced on the land register?

Answer 48

Form A restriction on the proprietorship register

Question 49

If co-owners can’t agree how or when to dispose of property what can they do?

Answer 49

Section 14 Trusts of Land and Appointment of Trustees Act enables one co-owner to apply to court for an order relating to trustee’s duties to sell, obtain consent or declare nature of person’s interest

Section 15 Trusts of Land and Appointment of Trustees Act sets out the factors court considers:
1. Intentions of persons who created the trust
2. Purpose property subject to trust is held
3. Welfare of minor who occupies or reasonably be expected to occupy

Question 50

When court considers division of property after relationship break down it first considers declaration of trust which is usually conclusive BUT challenger may be able to prove different common intention and court will consider all circumstances and give each party the proportion it considers fair

Question 51

What are the next steps after being instructed in a conveyancing transcation?

Answer 51

Client care letter

Obtain identification documents from client

Carry out due diligence checks

Acting for buyer: advise to instruct surveyor to establish if structural defects or problems which affect value of property

Acting for seller: advise on capital gains tax - usually none owed (private residence relief)

Question 52

On the sale freehold property, the seller executes a transfer and when a new lease is being granted, the parties execute a lease

Question 53

Usually, the buyer’s solicitor will draft a purchase deed (transfer) and send it to seller’s solicitors who arrange to have it executed with deed formalities

Question 54

What are the four types of purchase deed?

Answer 54

1. Transfer: used to convey all registered and unregistered land (TR1 to transfer of whole of land and TP1 to transfer a part of land)
2. Assent: used by PR to transfer land to beneficiary
3. Conveyance: older document used when unregistered land was sold
4. Assignment: used for unregistered leasehold land

Question 55

Non-UK residents are chargeable to CGT if they dispose of interests in UK land

Question 56

What is deemed as late completion?

Answer 56

After 2pm on day of completion

Buyer: fails to supply funds by 2pm day of completion.

Seller: fails to vacate by 2pm on day of completion

Question 57

What are the remedies for late completion?

Answer 57

Liable to pay interest at the contract rate on the amount equal to the purchase price and contents price less deposit applied to the period between contractual completion and late completion

If the property being sold/purchased has a tenant in situ the innocent party can elect to take the rental income until completion instead of compensation by notifying the other party

Question 58

When can an innocent party rescind contract for sale?

Answer 58

Delayed completion
AND
Contract specifies a special condition that time is of the essence

Question 59

What is a notice to complete and when is it used?

Answer 59

Served on party who fails to complete (anytime after completion)

Defaulting party has 10 days to complete excluding day of service

If buyer in default and paid less than 10% deposit then they must pay the difference

Innocent party must be ready, willing and able to complete

Question 60

What are the remedies after a notice to complete is issued and the defaulting party fails to complete in 10 days?

Answer 60

Buyer defaulting:
- Rescind contract
- Retain deposit
- Resell property
- Claim damages (limited to difference between contract and resale price)

Seller defaulting:
- Rescind contract
- Reclaim deposit with interest at contract rate
- Claim damages sufficient to put buyer in positions had seller performed

Question 61

What is the remedy if a party fails to complete?

Answer 61

Specific performance requiring defaulting party to perform as promised and damages for delay

Question 62

What are the claims available after completion?

Answer 62

By buyer for breach of title guarantee or damages for misrepresentation

Question 63

What is a search with priority and what is the effect?

Answer 63

Performed prior to completion to temporarily prevent new charges being registered that would impact the buyer’s or mortgagee’s rights

If land is registered an OS1 or OS2 priority search at HMLR provides a 30 working day period to complete registration

Question 64

How long do you have to register a property which has triggered first registration?

Answer 64

2 months

Question 65

What happens when contracts are exchanged?

Answer 65

The matter becomes legally binding

Question 66

What are the three formulae for exchange of contracts?

Answer 66

Formula A: one solicitor (usually seller’s) holds both signed parts of the contract, the buyer’s solicitors having sent a signed contract and deposit in advance. The solicitor confirm that both are the same and inserts the exchange and completion dates on both.

Formula B: each solicitor holds their own client’s signed contract and the solicitors confirm in a call the contracts are the same and will each send their signed part to the other

Formula C: if there is a chain of transactions, two calls are made: First call to confirm solicitors are ready and second call to exchange

Question 67

What should the buyer’s solicitor consider doing if completion is more than couple weeks after exchange?

Answer 67

Protect buyer’s position.

If land is registered by register the estate contract on the charges register.

If land is unregistered by registering a C(iv) land charge against the seller’s full name

Question 68

If parties wish to vary their contract after exchange then they should re-execute new contracts with the new terms - one party may not unilaterally alter the contract

Question 69

What is the date for completion specified in the Standard Conditions of Sale?

Answer 69

20 working days after exchange

Question 70

The Standard Conditions of Sale set out that the risk in the property passess to the buyer on exchange meaning if the property is destroyed or damaged prior to completion the buyer must still proceed with transaction

Question 71

The Standard Conditions of Sale set out that the seller does not need to insure the property between exchange and completion

Question 72

Beneficial interest = interest inside the property

Question 73

Beneficial joint tenants each own all of the property and cannot reflect the fact they own equal or unequal shares in the property

Question 74

When is a Form A restriction on properiertship register required?

Answer 74

when the beneficial interest is held as tenants in common

Question 75

Example of how to succinctly explain SDLT calculation:

The property will attract a total tax liability of:
0% on first £250,000 = nil;
5% on first £150,000 = £7,5000;
A total liability for SDLT of £7,5000

Question 76

Must notify lender if value of property changes

Question 77

An express declaration of trust will always override an implied trust

Question 78

Ensure to advise client on risks of exchanging before resolving any issues where relevant

Question 79

If acting for a lender then there will be a professional conduct issue duty to advise them of any issues with property

Question 80

What needs to be completed at the pre-contract stage when acting for the buyer?

Question 81

What needs to be completed at the pre-contract stage when acting for the seller?

Answer 81

By client:
1. Property Information Form, Fittings and Contents Form [and Leadhold Information form]
2. Energy performance certificate (from last 10 years)
3.

By firm:
1. Apply to the Land Registry for an up-to-date Official Copy of the Register of Title and Title Plan.
2. Write to Buyer’s solicitors, Estate Agents [and mortgage lender]
3. Prepare the draft contract and send with other related documentation to Buyer’s solicitors
4. Calculate taxc
5. Write to the Management Company requesting service charge informationand information in respect of any sinking fund that may exist and forward this to the Buyer’s solicitors upon receipt.
6. We will check the terms of the Lease to check if there are issues in relation to the remaining term and also whether the Landlord’s consent to the assignment is required and make the necessary application.