Property Law & Practice Flashcards
Who gets together the title documents to the property and what should these include?
The sellers solicitor will get together the title documents and send them to the buyers solicitor.
The title documents should include Land Registry official copies of the register, Land Registry title plan and copies of any documents referred to
What is shown on the Proprietorship Register?
Class of Title ( Title absolute, qualified, possessory, leasehold)
If title is anything other than absolute, buyers solicitor report it to the client
What is shown on the Property Register?
- Property description
- Rights BENEFITTING the property
If it is shown that a property has the benefit of a right of way, what four things must be considered?
- Registration of the Burden
- Adequacy (does the wording cover everything it needs to)
- Maintenance (even if not mentioned, it will need to be paid)
- Adoption
What is the wording usually used for a tenant in common restriction on the proprietorship register?
No disposition by a sole proprietor
Which register will a mortgage be found on?
Charges Register
Which register will covenants be found on?
Charges Register
What is the date after which a property if unregistered, must be registered?
1st December 1990
Where is title deduced in an unregistered land transaction?
Root of title
Requirements
- Adequately describe the extent of the land being conveyed
- Must Be dated more than 15 years ago
- Does not Cast doubt on the sellers title
- Deals with both legal and beneficial title to the property
Which standard searches are always necessary in pre-contract searches?
Registered:
Local Search
Chancel Repair
Drainage
Desktop Environmental
Unregistered:
Search of Index Map
central Land Charges
When is a SIM (search index map) necessary?
It will inform you whether the neighbouring land is registered or not.
This is relevant and necessary when figuring whether an easement is binding.
If the neighbouring land is unregistered then the easement will continue to bind the neighbouring land whilst it remains unregistered. If the neighbouring land is registered, however, the easement needs to have been registered on the charges register of the neighbouring land’s title in order for it to bind its current owners.
For what kind of covenant breach can you apply to the Upper Tribunal Lands Chamber?
Restrictive covenant
What remedy should a buyer seek if there will be a future breach of a covenant?
first remedy is restrictive covenant indemnity insurance which the buyer should pay the cost of
What are the formalities for the creation of a lease?
Legal lease must be created by deed if the term is over 3 years
A tenancy of 3 years or under may be created in writing or even orally
Is there an implied right for a landlord to increase the rent?
No, though an FRI lease of ten years or more will probably include rent review clause
What is the most common type of rent review?
Open market rent review
What should happen if the landlord and tenant disagree on the rent review?
An independent valuer will determine the new rent by consdiering the rent comparable to other premises nearby and the terms of a hypothetical lease.
When deciding whether the rent should be changed, what assumptions does the independent valuer make?
- The tenant has complied with all their obligations
- Landlord has complied with all their covenants under the lease
- if damaged or destroyed parts of the building have been rebuilt
When deciding whether the rent should be changed, what disregards does the independent valuer make?
- Effect of the tenants occupation on the rent
- Goodwill attached to the tenants business
- Tenants improvements
Who will be responsible for the repair of the premises (landlord or tenant)?
Commercial tenant will almost always be responsible for the repair of their demise.
Though Landlord will be responsible for repairing the common parts and charging a service charge to the tenants
Who is responsible for insuring the premises in a lease?
The landlord is almost always be responsible for the insurance of the building.
Insured risks: risks covered by the insurance policy taken out by the landlord and will be excluded from the tenants repariing obligations
Which covenants in the lease if qualified are automatically converted into a fully qualified covenant?
Alterations (provided they are from improvements)
Alienation
- Change of use is not converted
What can the tenant do if the lease is silent on alterations?
The tenant is free to carry out alterations so long as they do not reduce the value of the premises
Who prepares the draft lease?
The landlords solicitor
Who is required to deduce title of freehold in a lease agreement?
The Landlord solicitor
Who must investigate title and conduct pre-contract searches and queries in a lease transaction?
the tenant solicitor
What pre-contract and pre-completion searches should the tenants solicitor carry out in a leasehold transaction?
Pre-contract: CPSE 1 and CPSE 3
Pre- completion: OS1 (lease of whole), OS2 (lease of part) or OS3 (if lease is not registrable)
When is an agreement for a lease required?
usually not required but if parties want to commit to the lease but are not ready to yet or conditions have not yet been fulfilled, then they should draw up an agreement for lease
Who arranges the SDLT return after completion of a leasehold?
The tenants solicitor, they should register the lease if necessary
What was the tenants liability on covenants in leases before 1 January 1996?
Original tenant remained liable to the landlord for covenants under the concept of privity of contract.
The obligations would not pass on assignment to the new tenant therefore the new tenant had to covenant directly with the landlord to observe all the covenants
What is the tenants liability on covenants in leases granted after 1 January 1996?
When a new lease is assigned, the original tenant is released from liability and all of the tenants covenants are passed to the new tenant.
The original tenant can enter into an AGA with the landlord to guarantee the obligations of the new tenant
Who needs to deduce title in the assignment of a lease?
The tenant solicitor deduces title by providing official copies of the leasehold title, if not registered, then copies of the landlords title
Who should raise pre-contract searches and enquiries and which ones should be raised in an assignment of a lease?
The Assignees solicitor should raise the pre-contract searches and enquiries.
They should raise CPSE 1 and CPSE 4 enquiries
When must the tenant solicitor apply to the landlord for consent for assignment?
Should apply early on in the transaction for the landlords consent, the landlord should respond within 28 days of the request
Who is most likely to be party to the draft lease for an assignment of lease?
The tenant and the assignee (usually not the landlord)
What should all parties prepare pre-completion of assignment of a lease?
Tenant solicitor: Completion statement for the assignee (apportioning of rent)
Landlord will prepare the license to assign in triplicate
Assignee will draft the deed of assignment (TR1 if it is a registered lease)
What should all parties do on completion of the assignment of a lease?
Tenant solicitor and assignee solicitor agree over the phone to complete and date the deed of assignment
Assignee solicitor sends the tenant solicitor the completion monies
All parties agree to complete and date the license to assign
What steps must be taken post-completion of an assignment?
Must send formal notice to the landlord of the assignment
must register the assignment
must arrange to submit the SDLT
When would it considered reasonable for the landlord to refuse consent to the assigning of a lease?
- questions about the ability of the assignee to pay rent (newly incorporated)
- use of the property does not fit with the property type
- cannot refuse for personal dislike
What are common provisions in a license to assign or underlet?
Consent for limited time and for limited transaction
Tenant agree to pay landlords costs
Assignee or underletter agrees to covenant directly with the landlord to observe lease obligations
The draft license to underlet will have the draft underlease attached
Who drafts the licesne to assign or underlet?
Landlords Solicitor
What is the remedy of action in debt?
Landlord can issue court proceedings to recover a debt.
Limited to rent due in the six years before issue
What is the remedy of forfeiture arise?
Allows the landlord to re-enter the premises and take them back from the tenant
For non-payment of rent, the landlord is entitled to forfeiture as long as the lease allows (any other breach and the landlord must serve a s146)
When may commercial rent arrears recovery be available?
Where the premises are purely commercial
Minimum of seven days principal rent is owed
Lease has not been forfeited
How is Commercial rent arrears recovery carried out?
- landlord must appoint an enforcement agent
- Seven clear days notice of intention to enter the premises
- Landlord must serve another seven days notice if they are to sell the seized goods
What can you get back from commercial rent arrears recovery?
Rent, interest, VAT
CANNOT get back insurance or service charge
What possible remedies are available for the landlord for repairing breaches by the tenant?
Damages (though limited to reduction of the value of landlords reversion)
Self help Jervis clause ( gives the landlord the right to enter the property and carry out repairs and carry out the full cost of doing so from the tenant)
What are the four methods of terminating a lease?
- Effluxion of time
- notice to quit
- surrender
- merger
When does the Landlord and Tenant Act 1954 apply for business tenancies?
When there is a fixed term or periodic tenancy (must be more than six months)
Occupied by the tenant
For the purposes of business ( does not include sunday school or taking lodgers)
How can the Landlord and Tenant agree to not have security of tenure from the 1954 Act?
Contracting Out
o Landlord MUST serve a warning notice on the tenant in a prescribed form
Must be served before the parties complete the lease
o Tenant must provide a DECLARATION in prescribed form to the landlord before completing the lease
If lease completion is at least 14 days from the date of the warning notice, then this can be a simple signed declaration
If lease is less than 14 days away, then the tenant must provide a statutory declaration (signed before an independent solicitor)
What is the process for a tenant to renew their lease?
s26 notice
- tenant must have a lease which granted a term of more than one year
- minimum notice period of six months and maximum of 12 months
- notice expires on the date of commencement of the new lease
- Landlord has two months from the notice to serve a counter-notice
How does the landlord terminate the lease of a protected tenant?
s25 (hostile) notice (cannot be served if the tenant has served a s26/27 notice)
Notice period is 6-12 months before the termination date
Landlord can apply to court to terminate the lease
What are the landlords grounds for opposition to a renewal of a lease?
-persisitent and serious breach by the tenant of a repairing obligation
- perisitent delay of the tenant in paying rent
- serious and persistent other breaches by the tenant
- landlord offers suitable alternative accomadation
- landlord intends to demolish or reconstruct the premises
- landlord intends to occupy for himself
Which grounds for the landlord to terminate a lease under s25 are mandatory for the court to grant and which are compensatory?
- landlord offers suitable alternative accommodation
- landlord intends to demolish or reconstruct the premises (compensatory)
- landlord intends to occupy for himself, owned reversion for at least 5 years before date of termination (compensatory)
When is planning permission needed (and exceptions)?
Whenever there is development on land unless it falls into one of the exceptions
- building work which only affects the interior of the ubilding
- building work which does not materially affect the external appearance of the building
- changes of use which are within the same use class
When are building regulations required?
- erection or extension of a building
- extensions or installations of a service or fitting
- work required where there is a material change of the whole use of the buildign
Are small extensions to a dwelling house considered development in need of planning permission?
NO
When must enforcement action be taken on any breaches of planning permission?
Within four years from the date the works were completed
Within 10 years for other breaches
What enforcement powers does the local authority have for breaches of planning?
LA has six months from breach to impose a fine
LA can ask landowner to remove the work, or the LA can do it after 28 days and claim back expenses
When must a landlord respond to a request for alienation?
Within 28 days
What does a local authority search entail?
Covers all matters relating to property within the knowledge of the local authority
Local Land Charges Search (LLC1)
Standard enquiries (CON29)
Optional Enquiries (CON290)
Who must make the pre-contract searches and raise enquiries?
Buyers solicitor making searches and raising enquiries with the sellers solicitors
What enquiries can be raised under the CPSE?
CPSE 1 (covers all commercial freehold transactions)
CPSE 2 (where the property sold is subject to existing tenancies)
CPSE 3 (where a lease of a property is being granted)
CPSE 4 (where the property being sold is leasehold
What are the formalities for the property contract? And why do we need a contract?
Be in writing
Incorporate all the agreed terms
By singed by each party to the contract
- It may be used to fix a completion date or certain conditions
The standard conditions of sale and the standard commercial property conditions are incorporated into which types of contract?
Standard Conditions of Sale: Residential
Standard commercial property conditions: Commercial
When may the sellers solicitor add special conditions to the contract?
Only when it is absolutely necessary
If the parties do not fix a completion date, then what do the SCS and SCPC specify as the time limit for date of completion and what time of day?
20 working days after the date of the contract
2pm
What does it mean when the sellers solicitor holds the deposit as a stakeholder or as agent?
Stakeholder: keeps the deposit safe and not pay it to the seller until completion
Agent: Seller may demand the deposit after exchange
SCS and SCPC allow for the deposit to be held as stakeholder
What is the basis of VAT in residential property and in commercial property?
Residential property is exempt supply or zero rated supply meaning that buyer do not pay VAT
Commercial property: default position under SCPC is that the property is standard rated supply meaning VAT is payable at the normal rate above the purchase price
- Exception: if the property is over three years old and seller has made an option not to tax, no VAT to pay
What happens to the risk when contracts are exchanged?
Risk moves from the seller to the buyer
Who drafts the transfer deed for pre-completion in a freehold transaction?
Buyers solicitor
What form must the transfer form be in? Registered and Unregistered Land
Transfer of land must be in the form of a deed
Registered: TR1 (whole of a freehold or leasehold title)
TP1 (transfer of part only of the registered title)
TR5 (transfer of a portfolio of registered titles)
Unregistered: can use the TR1 or conveyance
Who must execute the TR1?
The transferor (seller)
How is a TR1 form executed by an individual and by a company?
Individual: signs the transfer form in the presence of a witness who also signs. Transfer is considered delivered when it is dated
Company: with or without company seal (two directors or one director and company secretary)
What is the purpose of buyer making pre-completion searches?
Check and protect the buyers ability to obtain title to the property
What pre-completion searches should be carried out in respect of registered and unregistered land?
Registered Land: Search with priority (OS1 or OS2) at the Land Registry, gives a 30 working days priority period
Unregistered land: Land charges search of the land registry (K15), giving priority period of 15 days
What is the overview of how completion works and the roles of both the buyers and sellers solicitors?
Buyers solicitor has received the money from the client and the bank (mortgage) and sends this over to the sellers solicitor
Sellers solicitor dates the transfer deed once they receive the money
Buyers solicitor tells client they can collect keys and move in
Who organises the SDLT and LTT tax return?
Buyers solicitor
When must the SDLT and LTT returns be made after completion?
SDLT: within 14 days of completion
LTT: within 30 days of completion
How much interest must the buyer and seller pay if they fail to complete on time specified in the contract?
They must pay interest for each day delay
- buyer pays interest on purchase price less the deposit
- seller pays interest on full purchase price
What remedy is immediately available to the non-defaulting party for failure to complete?
Interest and Common Law Damages
Is rescission available to a non-defaulting party for failure to complete?
No as time is not of the essence, serving a notice to complete makes time of the essence and both parties may rescind the contract if they fail to then complete
What is the effect of serving a notice to complete?
The parties must complete within 10 working days (first day being the day AFTER the notice was served)
What is SDLT payable on?
Purchase price including VAT
What is a certificate of title?
Certifies that the title of the property is satisfactory for lending purposes
