Property (Freehold) - Post-Completion (11) Flashcards
How is the seller’s mortgage discharged?
Discharge of Seller’s Mortgage: Any existing mortgage must be discharged, as agreed in the Completion Information Form.
Repayment
Repayment: The lender will be repaid either by the buyer or the seller.
(1) Seller: Seller will typically discharge using the purchase money.
(2) Buyer: Buyer may direct purchase funds directly to the lender if asked.
Discharge
Discharge: Once repaid, the mortgage must be discharged from the property register. There are three methods:
(1) Form DS1: Lender completes and sends Form DS1 to the seller’s solicitor, who sends it to the buyer’s solicitor as confirmation of repayment. The buyer uses this to discharge it.
(2) E-DS1/ED: Lender completes an electronic DS1 or uses the Electronic Discharge System, which automatically discharges mortgage. Seller confirms this to buyer.
How is stamp duty paid?
Stamp Duty: Buyer’s solicitor must arrange for payment of stamp duty on the deed. The prescribed form must be completed even if no stamp duty is payable (see property taxation).
(1) SDLT: Paid to HMRC within 14 days on Form SDLT1 (confirmed on SDLT5).
(2) LTT: Paid to WRA within 30 days on LTR (confirmed on WRA Certificate).
(3) Non-Payment: Non-payment incurs fines, and transfer of title is prohibited until the SDLT5/WRA Certificate is provided to the Land Registry.
How is a new mortgage registered?
Registration of Mortgage: Any new mortgage must be appropriately registered within the priority period.
(1) Land Registry: Certified copy of the mortgage deed must be sent to LR for registration (alongside evidence of CH charge if relevant, and the lender’s written confirmation that this relates to the same mortgage). Form AP1.
(2) Companies House: Corporate borrowers must register the mortgage at Companies House within 21 days of creation. Failure will mean the charge loses priority, and may trigger immediate repayment.
>Acts as constructive notice to other creditors.
How is title transfered/first registration?
Transfer of Title (Registered Title)
Transfer of Title: Buyer must transfer ownership title on Form AP1 within the priority period, alongside a copy of the TR1/TP1, a fee, SDLT5/WRA Certificate, Form DS1 (if used), and Form DI.
(1) Form DI: A list of overriding interests burdening the title. These are then registered, and cease to override.
(2) Conveyancer Details: Details of the conveyancers for both parties must be provided for properties exceeding £5,000. If unrepresented, evidence of both parties must be provided.
(3) Title Information Document: Once registered, the Land Registry will issue a Title Information Document to the buyer’s solicitor. This acts as evidence of ownership. Following this, the solicitor can begin to close the file.
First Registration (Unregistered Title)
First Registration: Unregistered freehold title and unregistered leases exceeding 7 years must be registered in their own title at Land Registry on Form FR1 within 2 months of completion, alongside relevant documents.
(1) Form DL: The Registrar requires all documents forming evidence of title. These are numbered chronologically on Form DL, and provided to LR. Non-conveyancers must send originals, conveyancers can use certified copies.
Relevant Documents: Includes: a) all documents forming seller’s evidence of title; b) all pre-contract searches and enquiries; c) contract; d) answers to Form TA13; e) K18 (priority); f) transfer deed; g) seller’s receipted mortgage; h) SDLT/LTT; g) Form DI.
Verification of Title: Solicitors must confirm that the original deeds match the copies provided during the investigation of title.
Effect: These documents will inform the class of title given to the property (i.e. absolute).
(2) Mortgage Deed: Any new mortgage deed will also need to be supplied for the purposes of registration.
(3) Conveyancer Details: As above.
(4) Title Information Document: As above.
