Property 8: Pre-completion

Question 1

Can exchange and completion happen on same day?

Answer 1

Yes - simultaneous exchange and completion

Question 2

What pre-completion tasks are there for sellers solicitor for f?

Answer 2

1. completion statement
   - to show seller net sale proceeds
2. completion information and undertakings
3. signing of purchase deed / lease

Question 3

What is the completion statement

Answer 3

Done by sellers solicitor after exchange if there if land has mortgage
- shows seller how much of purchase money will be left after exiting mortgage is paid off
- must first ask any mortgagee for up to date redemption figure

Question 4

What is the completion information and undertakings

Answer 4

By sellers solicitor after exchange

Is form that
- gives details of client account to which purchase money is sent
- confirms amount due on completion
- says where keys will be available on completion
- gives undertaking to pay off mortgage and to provide evidence of discharge

Question 5

Who completes the transfer deed?

Answer 5

Buyers solicitor to draft deed and send it to sellers solicitor
- sellers solicitor to arrange for this to be executed as deed on or before completion
- to be handed over when completion money is received

Question 6

Who prepares the lease?

Answer 6

Landlords solicitor to prepare final copy for signing (engrossment)
- original signed by landlord
- counterpart (copy) signed by tenant

Question 7

What must a buyers solicitor do after exchange?

Answer 7

1. check sellers solicitor undertaking to pay off all mortgages
   - after receiving completion information and undertakings form
2. pre-completion searches
3. prepare completion statement
   - showing sum required to complete

Question 8

What is the purpose of the pre-completion searches?

Answer 8

Ensure that all information received about property remains correct and protects the buyer and lender for any undisclosed third-party rights

Question 9

What pre-completion searches should be made?

Answer 9

Registered Land
- official search with priority using property title number
(form OS1 for whole title / OS2 for Part of title)

Unregistered Land
- full land charges search against full name(s) of seller(s)

Repeated Searches
- bankruptcy search if buyer using mortgage
- company search if seller is company
- advise to buyer to repeat physical inspection

Question 10

What is the effect of an official search with priority?

Answer 10

• lets buyer know of any new entries

30 working day priority period to complete AND register
- any application for entry to register is paused until after

Question 11

What is the effect of full land charges search

Answer 11

• lets buyer know of any new entries

-15 working day priority to ONLY complete

Question 12

What should you do if you cannot complete transaction and registration in priority period?

Answer 12

Search must be renewed

Question 13

What is the effect if there is an error in the official search with priority register?

Answer 13

Still binding
- but may be able to claim indemnity from HMLR

Question 14

What should you do if there is a new entry revealed by pre-completion searches?

Answer 14

Should require sellers solicitor to resolve it before completion
- eg undertaking to pay off a new mortgage

Question 15

What should be included in Completion Statement (seller and buyer)

Answer 15

1. Seller
   - how much of purchase money will be left after existing mortgage is repaid (net sale proceeds)
   - taking into account up to date redemption figure AND estate agent fee
2. Buyer
   Made by buyers solicitor for buyer
   - all sums (including stamp. duty land tax, HMLR fees, legal fees and indemnity insurance premiums)

Question 16

What is the final form of purchase deed or lease called

Answer 16

Engrossment

Question 17

Does the buyer have to sign purchase deed

Answer 17

Required if:
- it includes covenants by the buyer
- there is more than one buyer

Question 18

What are the types of purchase deeds?

Answer 18

Conveyance
- can be used for unregistered land

Transfer
- for registered or unregistered
- TR1 - if whole of land in title is transferred
- TP1 - if part is land in title is being transferred

Assignment
- unregistered leasehold land (can use TR1)

Assent
- PR transferes land to beneficiary
- need not be deed unless contains covenant

Question 19

What is also required in pre-completion for assignment?

Answer 19

Additional to other requirements

• licence to assign (evidence of landlords consent)
• if seller has pre-paid service charge parties must apportion this at best estimate and buyer will pay any shortfall