Property Practice Flashcards
What is a headlease?
Lease granted by a freeholder to a tenant
What is an under lease?
Leases granted by the tenant to an undertenant
What is the situation when a buyer does not agree with a term within an existing lease?
The seller must negotiate with the landlord to enter into a deed of variation
What is a deed of variation?
An agreement between the landlord and tenant varying the terms of the lease
What are prescribed clauses?
Summary of the lease terms and are in standard form
What is an example of an unacceptable covenant in a lease?
Absolute prohibition against assignment
What is the difference between the rent payments in a residential and commercial lease?
The rent in a commercial lease will typically be much higher
What is the difference between consent to assignment of a lease in a residential and commercial transaction?
The landlord in a commercial lease can reject assignment if they believe the incoming tenant will be unable to pay the rent
Can a landlord review the rent of a lease during the term?
Not unless there are provisions for doing so in the lease
What are the first steps a solicitor will do in a conveyancing transaction?
Take instructions from client in a questionnaire
Send client care letter
Due diligence checks
Obtain ID documents
Advise buyer to have a survey of the property
What is capital gains tax?
A tax on the profits made where a taxpayer disposes of an asset that has increased in value
If Capital Gains Tax is payable what is the process?
A residential property return must be submitted to HRMC and any tax due paid within 30 days of completion
What is Private Residential Relief?
Capital Gains Tax is not payable in most residential conveyancing transactions
When will a party be entitled to relief of Private Residential Relief?
- The dwelling is their main residence
- They have not been absent during their period of ownership other than for job-related accommodation
- Grounds or garden are not greater than 0.5 hectares
No part of their home has been used exclusively for business purposes during their ownership
What is an undertaking?
A professionally binding promise given orally or in writing and may be given by anyone at a solicitors firm.
What are the consequences of a solicitor failing to comply with an undertaking?
The recipient can seek to enforce if reliance was placed on the undertaking and there could be sanctions by the SRA
What are the confidentiality issues in conveyancing?
A solicitor has duty to keep the details of the clients confidential and you are liasing with third parties
What is the protocol?
A statement of best practice for residential conveyancing transactions introduced by the Law Society
When would the protocol not be used?
A commercial or new build transaction
What is an EPC?
A document containing information about a property’s energy use and typical energy costs
How long is an EPC valid?
10 years
When would an EPC not be required?
For a listed building
What is the stage of negotiations the head of terms?
Commercial equivalent of the memorandum of sale of a residential transaction
What is the code for leasing business premises?
Produced by the Royal Institution of Chartered Surveyors and sets out best practice of landlords when negotiating the terms of a commercial lease with a tenant