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SQE2 Orals > Property - Freehold > Flashcards

Property - Freehold Flashcards

1
Q

Which searches are carried out in every case?

A
  1. Local search: Gathers information held by the local authority, e.g. financial or planning charges, listed building charges etc. Also roads, rights of way etc.
  2. Drainage and water search: Establishes details about water supply, metering and sewers.
  3. Environmental search: Reveals if the land is contaminated.

Buyer should also physically inspect the property.

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2
Q

What are some transaction-specific searches?

A
  1. Search of the index map (UL): Shows if the property is fully or partially registered.
  2. Bankruptcy search: For buyers getting a mortgage.
  3. Company search: Shows if a company is subject to winding up/liquidation proceedings, charges and if they are entitled to deal with land.
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3
Q

What are some location-specific searches?

A
  1. Coal mining search: Reveals if coal mining has occurred in the locality.
  2. Chancel liability search: Obligation to contribute to the upkeep of the chancel of a church in the locality (costly liability). Indemnity insurance is a solution.
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4
Q

What is development defined as?

A
  • Carrying out b building, engineering, mining, or other operations in, on, over, or under land.
  • Making any material change of use of any buildings or other land.
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5
Q

What are the 2 types of express planning permission?

A
  1. Outline permission: Permits the principle, and a full application must be made within 3 years).
  2. Detailed permission: Development must start within 3 years.
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6
Q

What is deemed permission and how can it be misapplied?

A

Property owners have deemed permission to build small extensions, porches, fences etc. This can be disapplied by the local authorities passing an Article 4 Direction.

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7
Q

What are the time limits for enforcement?

A

Unauthorised building works: 4 years.
All other breaches: 10 years.
Breaches of listed building status: No limit.
Building regulations: 12 months (injunction can later be brought).

Indemnity insurance can deal with the possibility of enforcement.

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8
Q

When a buyer pays in cash, what are the requirements?

A

Money laundering checks must be carried out, e.g. seeing the money had been in a UK-based bank account for the last 3-6 months and documentary evidence provided re. where the money came from.

Notify institutional lenders.

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9
Q

What are the 5 types of mortgage?

A
  1. Repayment mortgage.
  2. Interest only mortgage.
  3. Endowment mortgage.
  4. Pension mortgage.
  5. Sharia compliant mortgage.
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10
Q

What will the lender do before agreeing to a mortgage?

A

Obtain a mortgage valuation report to confirm the property is good security, and require the buyer to provide evidence they can afford the mortgage repayments.

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11
Q

What is the purpose of a certificate of title?

A

The buyer’s solicitor will submit a clear CoT to confirm the property has a good and marketable title, and to act as a request for the release of the advance.

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12
Q

When must a mortgage be perfected, i.e. registered?

A

RL: Within 30 working day period.
UL: 2 months.
Company borrower: 21 days.

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13
Q

What are the key conditions in the Standard Conditions of Sale?

A
  1. Purchase price includes VAT.
  2. Deposit.
  3. Proof of title and title guarantee.
  4. Indemnity covenant.
  5. Risk and insurance.
  6. Completion (20 working days after completion unless agreed otherwise).
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14
Q

What are the 3 types of title guarantee?

A
  1. Full title guarantee: Provides that the seller is entitled to sell and is doing so free from all undisclosed charges and encumbrances.
  2. Limited title guarantee: Seller warrants the seller has not created any charges or granted any rights.
  3. No title guarantee: Seller has no knowledge.
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15
Q

What is contained in the PIF?

A
  • Boundaries and parking arrangements.
  • Disputes with neighbours.
  • Building work/alterations.
  • Guarantees/warranties and insurance.
  • Flooding and services.
  • Occupiers (non-occupiers must relinquish their rights).
  • Utilities.
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16
Q

What are the 3 pre-printed special conditions?

A
  1. Whether the property being sold will be vacant/tenant in situ.
  2. Whether a different completion time has been agreed.
  3. Whether there are any occupiers in the property, e.g. relative.
17
Q

What are the 3 methods of exchange?

A
  1. In person.
  2. By post.
  3. By phone.
18
Q

What are the 3 formulae for exchange of contracts by phone?

A
  1. Formula A: Seller’s solicitor holds both signed parts of the contract and the buyer’s deposit. Inserts the date of exchange and completion.
  2. Formula B: Each solicitor holds their own client’s signed part of the contract. Buyer’s solicitor sends the deposit after signing.
  3. Formula C: Train of transactions and deposit monies are sent directly to another firm further up the chain.
19
Q

How is the buyer’s position protected if there is a long period between exchange and completion?

A

RL: Registering an estate contract as a unilateral notice on the seller’s charges register.
UL: Register a C(iv) land charge.

20
Q

What are the pre-completion steps for a seller’s solicitor?

A
  • Ask the seller’s lender for an up-to-date redemption figure and prepare a completion statement.
  • Undertaking given to pay off the mortgage from the sale proceeds.
  • Arrange for the purchase deed to be executed with the formalities of a deed.
21
Q

What are the pre-completion steps for a buyer’s solicitor?

A
  • Completion statement, showing the sum required to complete.
  • Send CoT to the lender to request the mortgage advance.
  • RL: Official search showing entries since the pre-contract searches so they can be removed (priority period of 30 working days).
  • UL: Full land charges search - seller’s solicitor should undertake to remove anything unexpected. Priority period of 15 working days to complete and bankruptcy/company searches are repeated.
22
Q

What are the 3 methods of completion?

A
  1. Personal attendance.
  2. By agent.
  3. By post.
23
Q

What is the effect of completion?

A
  • RL: Title passes when the purchaser becomes registered at HMLR.
  • UL: Title passes on completion.
24
Q

What are the post-completion steps for a seller’s solicitor?

A
  • Report to client, i.e. confirm completion.
  • Discharge the mortgage in accordance with the mortgage redemption statement.
  • Pay the estate agent.
  • File closure.
25
Q

What are the post-completion steps for a buyer’s solicitor?

A
  • Report to client, i.e. confirm completion.
  • Register a company charge (21 days).
  • Pay SDLT/submit return.
  • Register title within 30 working days (RL) or 2 months (UL).
26
Q

What common law damages are available for delayed completion?

A

If the funds are received after 2pm, completion is treated as taking place on the next working day and the seller is entitled to interest at the contract rate (purchase price - deposit) for the number of days.

27
Q

When is a notice to complete needed?

A

If the serving party is ready, able, and willing to complete.

28
Q

What must the receiving party do when served with a notice to complete?

A
  • Complete within 10 working days.
  • Pay the balance to bring the deposit up to 10%.
29
Q

What remedies are available to the seller if the buyer defaults?

A
  • Rescind the contract.
  • Retain the buyer’s deposit.
  • Resell the property.
  • Claim damages.
30
Q

What remedies are available to the buyer if the seller defaults?

A
  • Rescind the contract.
  • Reclaim their deposit monies with interest at the contract rate.
  • Claim damages.
31
Q

What remedies are available before completion?

A
  1. Specific performance.
  2. Damages: Puts the innocent party back in the position they would be in if the contract had been performed. The seller can recover the difference in value between the contract price and resale.
  3. Rescission: When there has been a misrepresentation or a licence to assign is not forthcoming.
32
Q

When is rescission permitted for misrepresentation?

A

When:
1. There has been an element of fraud/recklessness; or
2. If the innocent party took the property it would be substantially different from expected.

33
Q

What remedies are available post-completion?

A
  • Breach of title guarantee covenants, e.g. superior title holder contests the buyer’s title after being given full title guarantee.
  • Misrepresentation.

SQE2 Orals (9 decks)

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