Property Flashcards
Three parts to the contract
Particulars of sale
Standard conditions
Special conditions
What if standard conditions and special conditions conflict
Special conditions prevail
What are unfair contract terms under consumer rights act 2015
Unfair - contrary to good faith and create a significant imbalance in the rights and obligations of the parties to the detriment of the consumer
Which contracts does the consumer rights act apply to
Consumer and trader contracts
What are some of the key standard commercial property conditions (SCPC)
Full title guarantee
Sellers solicitor drafts contract
Deposit at 10% held as stakeholder by sellers solicitor
If money transferred after 2pm it is taken to be completed the following working day
Penalty for late completion
According to SCPC when is the completion date
20 working days after contract date
Do the SCPC apply to all contracts
They are implied into all contracts unless explicitly overwritten
Does the signing of the contract need to be witnesses
No
Can the solicitor sign the contract on behalf of the client
Only with express authority
Methods of exchange and when they come into existence
Phone - formula a, b or C In person Post- completed when S sends to B DX- completed when B received it Fax and email NOT allowed If only one contract - completed when second signature is made
What is formula A for exchange of contracts over the phone
B sends contract and deposit to S
B rings to confirm they have it and agree time to note for exchange
Agree completion date
S send contract back to B
What is formula B for exchange over the phone
Each party has a copy of the contract
They each sign their own
They ring to agree time and note to exchange And confirm they have both signed their own copies
Send contracts to each other plus deposit
What is formula C for exchange over the phone
Chains
When does the risk of accidental damage to the property pass to the buyers
On exchange of contracts unless it can be shown that damage was attributable to sellers lack of proper care. Should insure from exchange
Can you advise on or arrange insurance for your client
Not unless you are authorised by FCA or relying on professional firms exemption
Three ways of holding a deposit
Stakeholder - by sellers solicitor
Agency for seller - by sellers solicitor
Agency for buyer - by buyers solicitor
Is interest payable on deposit held by solicitor
Yes
What if deposit cheque bounces
This is breach of contact and seller can either keep contract alive or end it
Either way can sue for damages
Once deposit is paid what sort of right does the buyer have over the property
A lien
This can be enforced by court order and registered but would only do this where there is a problem with the transaction
What is overage
Requires the purchaser to pay to the seller an agreed percentage of the increase in market value of the property after a particular date
What is positive overage
Agree to pay specific amount if specific event occurs
What is negative overage
Seller withholds ransom strip or covenant that requires further payment so development can go ahead
When does a conditional agreement in a contract expire
Specific date in contract or if no date then completion date
If no completion date then within a reasonable time
Include long stop date by which condition must be satisfied
Requirement to act with reasonable speed
Require them to notify other party when contract becomes unconditional
What is a call option agreement
This allows the buyer to insist that the owner sells property to them within agreed timeframe for agreed value
When you have a call option what sort of interest do you have and how can it be protected
Equitable interest Register C(iv) charge for unregistered land or notice for registered land
Does a call agreement have to be exercised
No can let it lapse
What is a put option
This enables the land owner to insist the other party purchase their land subject to terms of contact
What sort of interest in the land does a put option create
No interest
Does a put option have to be exercised
No the seller can chose to never sell
What tax is the option fee and subsequent transfer of land subject to
SDLT, VAT and capital gains tax
What is a pre emotion agreement
A right of first refusal. If owner decides to sell within a particular period they must offer it to developer first
If developer doesn’t accept within particular time frame then can offer it to third party
Owner not obliged to ever sell
