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SQE Flashcards (Jonathan) > Property (Completion) > Flashcards

Property (Completion) Flashcards

1
Q

What is required for a transfer of land?

s.52 LPA

A

Deed

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2
Q

What forms are used for transfers of registered land?

A
  • TR1 for whole of freehold or leasehold title
  • TP1 for part of a registered title,
  • TR5 for a portfolio of registered titles.
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3
Q

What form is used for unregistered land transfer?

A

Any conveyance (e.g. parchment!)

Although many use the Land Registry TR1, which can also be used for unregistered land.

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4
Q

Who traditionally drafts the transfer deed?

A

Traditionally, the buyer’s solicitor drafts the transfer deed, though more recently, the seller’s solicitor often drafts it.

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5
Q

When is the date entered in Panel 3 of the TR1 form?

A

It is handwritten on completion and left blank until then.

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6
Q

What is entered in Panel 5 of the TR1 form regarding the transferee? How many?

A

The buyer’s full name.

Maximum of 4 people or companies.

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7
Q

What are the options for title guarantee in Panel 9 of the TR1 form?

A
  • Full or limited title guarantee.
  • Leave empty if no guarantee is provided.
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8
Q

What is added in Panel 11 of the TR1 form?

A

Any additional provisions, such as an indemnity covenant or the appointment of a second trustee.

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9
Q

What must be done for execution in Panel 12 of the TR1 form?

A

The transferor (seller) must always execute the deed

Transferee (buyer) must execute if …
* they are tenants in common
* agree to hold the property on trust
* are providing an additional obligation in panel 11 (e.g. indemnity covenant or appointment of 2nd trustee)

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10
Q

How do individuals execute a transfer deed?

A

In the presence of one independent witness, who also signs and prints their full name and address.

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11
Q

What are the methods for a company to execute a transfer deed?

A

Any of the following…

  • Company seal
  • No seal, signed by 2 directors
  • No seal, signed by 1 director and a company secretary
  • Signed by 1 director and witnessed by independent witness
  • Signed by a senior employee authorised under power of attorney (not a director or company secretary)
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12
Q

What is the procedure for transfer deed completion?

A
  1. Buyer’s solicitor drafts transfer deed
  2. Seller’s solicitor either amends or approves the draft deed
  3. Once agreed, seller’s solicitor sends the engrossment (final) transfer deed to the seller for execution (buyer’s solicitor does likewise only if buyer needs to execute)
  4. Seller’s solicitor, and if appropriate buyer’s solicitor, hold the executed undated transfer deed for completion
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13
Q

Prior to completion, what search must the buyer’s solicitor undertake for registered land?

A

Search with priority against the title number at the Land Registry

Form OS1 (Whole) or OS2 (Part of land)

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14
Q

Prior to completion, what search must the buyer’s solicitor undertake for unregistered land?

A

Land charges search of the Land Charges Registry using Form K15.

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15
Q

What is the priority period for a Search With Priority (OS1/OS2)?

Registered Land Only!

A

It confers a 30 working day priority period, ensuring the buyer’s transfer takes precedence if the buyer’s solicitor submits application to register within this period.

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16
Q

What is a land charges search (Form K15) for unregistered land?

A

It identifies any encumbrances or adverse matters, conferring a 15 working day priority period.

Unlike OS1, it is only necessary to complete the purchase (not submit the land registry application) within the priority period

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17
Q

What is a bankruptcy search (Form K16) and when is it required?

A

A bankruptcy search is required against the buyer when acting for both buyer and lender.

18
Q

What are requisitions on title?

A

Questions from the buyer’s solicitor to the seller’s solicitor before completion, often related to practical information and undertakings.

For example, collection of keys, bank details, exact amount payable, undertakings regarding redemption of morgages etc

19
Q

What form is used for requisitions in residential transactions?

A

The Law Society’s TA13, ‘Completion Information and Undertakings’.

20
Q

What form is used for requisitions in commercial transactions?

A

Made in the firms own precedent form, or using the CPSE form, Solicitor Completion Requirements (SCR)

21
Q

What if the seller has a mortgage over the property being sold?

DS1 or Receipted Morgage

A

The seller’s solicitor will need to pay the money required to redeem the mortgage to the seller’s lender.

  • In registered land the seller’s solicitor will receive a Form DS1 from the lender discharging the mortgage
  • A receipted mortgage is used in unregistered land to show a mortgage has been discharged.

The seller’s solicitor must forward to the buyer the receipted mortgage or DS1 once received from the lender

22
Q

What is the most common procedure for completion?

A

Completion by post, where the seller’s solicitor sends the transfer deed and documents to the buyer’s solicitor’s order.

23
Q

By what time should the seller solicitor send the deeds to the buyer’s solicitor?

A

No later than the end of working day after completion

Although it can take place on any working day, most residential transactions take place on a Friday.

24
Q

What happens if either party fails to complete by the contract deadline?

A

The defaulting party pays interest for each day of delay.

  • Interest is calculated at the interest rate in the contract.
  • If the buyer is late, the buyer pays interest on the purchase price less any deposit paid.
  • If the seller is late, the seller pays interest on the full purchase price.

If completion doesn’t occur, a notice to complete can be served and make time of the essence

25
Q

Can damages be claimed?

A

The non-defaulting party may claim common law damages.

If successful, the interest received under SCS is deducted from such a sum.

26
Q

Can the contract be rescinded?

A

Unlike interest under SCS and damages, rescission is not automatically available to the non-defaulting party.

This is because, time is not of the essence.

However, after either party has failed to complete on time, the non-defaulting party can serve notice to complete.

After the 10 day period recession may become available.

27
Q

What does serving notice to complete mean?

A

If completion is not complete by the time and date stated in the contract, either party are able to give notice.

The parties must then complete within 10 working days, commencing the day after the notice is served.

  • If it is the buyer who is the defaulting party, and have not paid the full 10% deposit, they must make up the 10% immediately - even if a lower sum was agreed for the deposit
  • If either party fails within 10 days, the remedies available depend on whether the defaulting party is buyer or seller.
28
Q

What remedy does the seller have after 10 days following default and notice?

A

The seller can do the following…
* Rescind the Contract
* Forfeit the Deposit/Interest
* Resell the Property
* Claim contractual damages for loss

29
Q

What remedy does the buyer have after 10 days following default and notice?

A

The buyer can do the following…
* Rescind the Contract
* Demand return of the Deposit/Interest
* Claim contractual damages for loss
* Request specific performance

30
Q

What steps must the buyer’s solicitor take regarding Stamp Duty Land Tax (SDLT)?

England Only

A
  • Prepare and submit the SDLT return within 14 days of completion
  • Obtain the SDLT5 Certificate.
31
Q

What is the equivalent tax in Wales to SDLT and how does it work?

A

Land Transaction Tax (LTT)

Must be submitted within 30 days of completion to the WRA

The buyer’s solicitor will receive a WRA Certificate

32
Q

What is required if a company gives a charge?

A

It must be registered at Companies House within 21 days of creation, or, if missed, a court order is needed.

33
Q

What form must the buyer’s solicitor fill for registered land post-completion?

A

The land registry Form AP1

No deadline other than the time limit for priority under OS1 of 30 working days from the search.

34
Q

What form must the buyer’s solicitor fill for unregistered land post-completion?

A

An application for first registration is needed using Form FR1.

Deadline of two months from completion. Otherwise, the transaction is void.

35
Q

What is CGT?

A

Capital Gains Tax, a tax on profit when an asset is sold for more than it was purchased.

36
Q

What constitutes a chargeable disposal for CGT?

A

Sale or gift of an asset, but not gifts on death.

All property assets are chargeable

37
Q

What are allowable expenses in calculating a chargeable gain for CGT?

A

When calculating CGT, the taxpayer can take into account allowable expenditure such as:

  • Cost acquiring the asset (e.g. conveyance fees);
  • Costs contributing to the value of the asset (e.g. building an extension, but not maintenance or repair); and
  • Costs disposing the asset (.g. conveyance and estate agent fees)
38
Q

What is the annual exemption for CGT?

A

A taxpayer is entitled to a £3,000 annual exemption, which can reduce the chargeable gain.

39
Q

What is Private Residence Relief?

A

A person does not pay CGT if they sell or dispose of their home if…

  • It has been the main home for all the time lived in it
  • They have not let it out
  • It has not been used for business purposes
  • The grounds including all buildings are less than 5000 square meters
  • It was not bought just to make a gain
  • For a married couple or civil partnership, only one house will be eligible for PPR.
40
Q

How to calculate SDLT?

England

A
  • Rates will be provided.
  • But atm, no SDLT up to £250,00
  • £250,000 - £925,000: 5%

Calculate the percentage, based on the purchase price + VAT.

Then apply reliefs and charges…

  • A discount is applicable for a first time buyer provided the price is no more than £625,000 > no SDLT for the first £425,000 and 5% on any part over £425,000 (but not exceeding £625,000)
  • If the property is a second property, an additional 3% SDLT is charged on the whole purchase price. Calculate the usual SDLT then add 3% extra of the whole
41
Q

How to calculate LTT?

A

Same as sdlt, but…

  • No relief for first-time buyers
  • Higher rates of LTT apply for buyers with a second property
  • The rates are different
42
Q

When is the date of the disposal for capital gains tax (CGT) purposes?

A

The date of exchange of contracts.

It is this date, rather than the date of completion of the transaction, which is deemed to be the date of the disposal.

SQE Flashcards (Jonathan) (30 decks)

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