Property Drafting Flashcards
What are the key documents to draft in Property Practice?
(1) Draft contract (Standard Conditions or Standard Commercial Property Conditions)
(2) License to Assign a Lease
(3) Lease
(4) Transfer Forms (TR1/TP1, AP1)
AP1 - Application to Change the Register
Less likely -
- License in the contract - but may be part of the contract drafting.
- Mortgage documents
- Land Registry Application
Property Drafting: Contract for sale
What is the completion date according to both the SC and SCPC, if none is given?
What is the latest time for completion under both sets of conditions?
- 20 working days after the date of contract.
- 2pm.
Any time after 2pm = treated as next working day.
Property Drafting: Contract for sale
How do you draft a completion date?
Special Condition [x]
Completion shall occur on [date], at [time], at which time ownership of the Property shall transfer to the buyer.
You must also tick the checkbox.
Property Drafting: Contract for sale
If nothing is said, is time of the essence?
How would you vary the position in the SC and SPSC?
No.
Special Condition [x]
Condition 9.1.1 (SC 6.1.1) shall be varied so that time shall be of the essence and the innocent party can rescind the contract if completion does not occur on the completion date.
Property Drafting: Contract for sale
How is the SC/SCPC position on deposit varied?
Special Condition [x]
Condition 3.2.2 (2.2.6 for SC) shall be varied so that the deposit shall be held by [deposit holder] as agent of the seller.
Property Drafting: Contract for sale
If not varied, can a buyer occupy the the property before completion?
SC - Yes, as licensee if the seller allows.
SCPC - No.
Property Drafting: Contract for sale
How do you draft a restrictive covenant?
How does the wording differ in relation to a positive covenant?
Special Condition [x]
The Buyer and their successors shall not… without the prior written consent of the Seller.
Positive covenant: not binding on successor.
Must also be in the TR1/TP1.
Property Drafting: Contract for sale
How would the SC and SCPC be varied in relation to assignment?
Special Condition [x]
Condition 1.4.1 (1.5.1 for SC) is varied so that the buyer may not assign or transfer the benefit of the contract to any third party without the prior written consent of the seller.
Property Drafting: Contract for sale
Would a buyer be bound by any easements on the property if the SC/SCPC are not varied?
The buyer is bound to those listed in SCPC 4.1 or SC 3.1.2.
To be clear, the seller should set out the particular incumbrances in the contract.
Property Drafting: Contract for sale
When would the seller need to vary the SC/SCPC in relation to title guarantee?
When not selling with full title guarantee.
Property Drafting: Contract for sale
Does the seller need to vary the SC/SCPC if they are bound by a personal indemnity covenant that affects the property?
No. The SC/SCPC provide that the transfer deed will contain an indemnity from the buyer to the seller against liability for future breaches of the obligation.
Property Drafting: Contract for sale
If VAT is not mentioned in the contract, is the purchase price inclusive or exclusive of VAT?
Residential: Inclusive.
Commercial: Exclusive.
For CSC - the seller may need to vary this if buyer is VAT-sensitive. They do this by ticking A1.
Property Drafting: Lease
How do you draft a Jervis v Harris clause?
If the Tenant does not rectify any breach of obligation notified to it within [x] months of service of the Landlord’s notice, the Landlord may enter the Property to rectify the breach and the Tenant shall pay to the Landlord on demand as a debt the costs and expenses of doing so”
Property Drafting: Lease
Draft a tenant’s break clause.
To terminate this Lease, the Tenant must serve on the Landlord not less than 6 months’ written notice expiring on and including [Break Date] provided that:
- Rent up to and including the Break Date is paid in full;
- The obligations in this Lease are fully observed and performed up to and including the Break Date; and
- the Property is returned to the Landlord with vacant possession on the Break Date.
Property Drafting: Lease
Draft a qualified covenant against assignation.
The Tenant may not assign the whole or part of this Lease without the prior written consent of the Landlord.
Property Drafting: Licence to Assign
What are the key terms of a licence to assign?
(1) Definitions
(2) Licence (or ‘Consent to Assign)
(3) AGA
(4) Costs
(5) Indemnity for breach
Property Drafting: Licence to Assign
In the Licence, is the lease term defined as from the start of the lease or from the assignment?
From the start.
Note: it is the residue being assigned.
Property Drafting: Licence to Assign
How do you set out the following clause:
(2) Licence
May also be ‘Consent to Assign’
In consideration of the Assignee’s covenants in this Licence, the Landlord consents to the Assignor assigning the residue of the Lease to the Assignee.
It is a condition of this consent that the Assignor enters into the Authorised Guarantee Agreement simultaneously with the completion of this Licence.
(delete AGA reference if not being given).
Property Drafting: Licence to Assign
Draft the clause:
(4) Authorised Guarantee Agreement
The assignor covenants to observe and perform obligations set out in the Authorised Guarantee Agreement and takes effect on the date that the assignor is released from the tenant obligations of the Lease.
Property Drafting: Licence to Assign
Draft the clause:
(5) Costs
The Assignor shall pay all reasonable costs and expenses exclusive of VAT of the Landlord in relation to this Licence.
Property Drafting: Licence to Assign
How do you set out the following clause:
(x) Indemnity
The Assignor and Assignee shall indemnify the Landlord against all liabilities, costs, expenses, damages and losses incurred by the Landlord arising from any breach of the terms of this licence.
Will Drafting
Draft the Commencement Clause.
Draft the Revocation Clause.
THIS IS THE LAST WILL AND TESTAMENT OF ME [name] of [address]
I REVOKE all former wills and testamentary dispositions made by me.
Next is appointment of executors (and trustees if relevant) and guardians.
Will Drafting
Draft the gifts clauses.
SPECIFIC GIFTS
- I GIVE the following specific legacies free of tax:
(a) my ring to [x]
PECUNIARY LEGACIES
- I GIVE the following pecuniary legacies to [x]:
(a) the sum of one thousand pounds (£1,000) to my sister [x].
RESIDUARY GIFTS
I GIVE all the rest and residue of my estate subject to the payment of my debts, funeral and testamenty expenses and legacies (‘my residuary estate’) to [x].
