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Property Practice > Property Practice > Flashcards

Property Practice Flashcards

1
Q

What is the equivalent of a memorandum of sale in the commercial context?

A

‘Heads of terms’

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2
Q

is the use of a management company common in both residential and commercial leases?

A

Yes. Often the buyer takes a share in the management company. The landlord may transfer the freehold of the property to the management company when the last leasehold unit is sold.

Tenants will be responsible for paying a service charge

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3
Q

Is it acceptable to have a clause imposing a prohibition against assignment in a long residential lease?

A

No. A lender would not agree to such a term. It would only be acceptable in a commercial lease.

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4
Q

What is the Law Society’s statement of best practice for conveyancing?

A

The Law Society Conveyancing Protocol

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5
Q

Can a conveyancing solicitor represent both the buyer and the buyer’s lender and to whom is the duty of confidentiality owed first?

A

In residential conveyancing transactions, if the buyer needs a mortgage to fund their purchase, the buyer’s solicitor will often act for the buyer’s lender as well, as is the case here. The lender will expect the buyer’s solicitor to report to them any issue which might affect the value of the property or which might affect the lender’s decision to lend. But the buyer’s solicitor must have the consent of the buyer to report such issues to the lender.

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6
Q

Do related transactions need to be synchronised, and what will happen if they are not?

A

Yes, if the client has a related sale and purchase then the transaction MUST be synchronised. This means that the solicitor must make arrangements so that both transactions exchange on the same day and have the same completion date. Otherwise, they can be the subject of a negligence claim.

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7
Q

If a buyer’s solicitor receives the epitome of title and realises that a triggering event has happened and title has not been registered, what should they do?

A

They should return the epitome of title and require the seller to make an application for first registration.

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8
Q

When will planning permission lapse?

A

After planning permission is issued, the development must commence within three years of the date of the permission or it lapses.

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9
Q

If unauthorised building happened without planning permission, how long does the local authority have to take action?

A

four years

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10
Q

What is a certificate of title and when should it be submitted?

A

The certificate of title is a document confirming that the title is good and marketable and acts as a request for the release of the mortgage advance to the buyer.

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11
Q

What form is used for the priority search if the buyer is only buying part of the land?

A

Form OS2 (otherwise it is OS1)

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12
Q

What is the result of delayed completion?

A

If completion is delayed, the innocent party will be entitled to receive damages and also charge interest for the amount of days that completion is delayed.

If time is of the essence in the contract, the innocent party has an immediate right to rescind the contract. However, time is usually not of the essence in a contract and will only be so if this is inserted into the contract. It is not in the Standard Conditions of Sale.

Once completion is delayed, the innocent party can serve a notice to complete which makes time of the essence, and gives the defaulting party 10 days to complete. However, in order to serve this, they must be ready, able and willing to complete.

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13
Q

What are the remedies if a party does not comply with a notice to complete?

A

If the buyer fails to complete after a notice to complete has been served, the seller may:

  • Rescind the contract
  • Retain the buyer’s deposit
  • Resell the property
  • Claim damages

If the seller fails to complete, the buyer may:

  • Rescind the contract
  • Reclaim their deposit moneys with interest
  • Claim damages
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14
Q

What is the purpose of a solicitor’s report to their buyer client?

A

To make the buyer aware of what the buyer’s solicitor has discovered during their work in the pre-contract stage and particularly any issues that might affect the buyer’s decision to purchase, and to confirm whether the title is good and marketable

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15
Q

What are the three methods of completion?

A
  • Personal attendance
  • Agent
  • Post (most common)
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16
Q

What are the three methods of exchange?

A

Person
Phone
Post

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17
Q

What are the statutory methods for terminating a commercial lease?

A

Forfeiture - applies when the tenant breaches a covenant in the lease and the lease provides that the breach is a ground for terminating the lease

Section 25 notice - a notice the landlord can serve on the tenant between six to 12 months before the end of the lease indicating that the landlord desires to have the premises back. It must be based on the presence of a specific statutory ground

Surrender - an agreement by both the landlord and the tenant to give up the lease

Section 26 notice - is a notice the tenant can give the landlord requesting a new lease. Like the section 25 notice, the section 26 notice must be served within six to 12 months before the end of the tenancy. The landlord will then have two months to inform the tenant whether they are willing to enter a new lease. If they desire not to, they must provide one of the statutory grounds justifying termination under section 25

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18
Q

What is the Conveyancing Quality Scheme?

A

The Law Society’s quality standard for residential conveyancing practices under which firms must make an application to the Law Society for accreditation

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19
Q

What is limited title guarantee?

A

Where the seller merely warrants that the seller has not created any charges or granted any rights during their period of ownership that have not been disclosed in the contract. A limited title guarantee is typically given by a seller with less knowledge or involvement with the property and is most appropriate when the seller is a personal representative.

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20
Q

What is no title guarantee?

A

When the seller has no knowledge or the property at all, for example a mortgagee in possession

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21
Q

What are the rules on using deposits for related purchases?

A

If the seller has a related purchase of a property for their residence in England and Wales, they can use the deposit on their sale towards the deposit required on that related purchase transaction

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22
Q

What is the commercial equivalent of the Property information Form?

A

The Commercial Property Standard Enquiries

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23
Q

What is the document in which a landlord gives formal consent to an outgoing tenant to assign the lease?

A

A licence to assign

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24
Q

Is an EPC required for a listed building?

A

No, an EPC is not required for a listed building

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25
Q

Does the UK Finance Mortgage Lender’s Handbook require solicitors to ensure their clients’ existing debts are fully paid before submitting the certificate of title to the lender?

A

No it does not.

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26
Q

How often must an EPC be updated?

A

Every 10 years

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27
Q

What is the commercial equivalent of the Standard Conditions of Sale?

A

The Standard Commercial Property Conditions

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28
Q

How long does the local authority have to take action if someone fails to obtain a building regulations certificate?

A

12 months. However, it may seek an injunction to force an owner to bring the property up to standards at any time if the work is deemed to be dangerous.

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29
Q

What is required for a good root of title?

A

To be a good root, the document must deal with the whole legal and equitable interest in the property, contain an adequate description of the property, be at least 15 years old at the date of the contract, and do nothing to cast doubt on the title.

A conveyance on sale is the most common root of title and also the most appropriate

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30
Q

What is an index map search and when should it be carried out?

A

When title is unregistered, in addition to carrying out the local search, drainage and water search, and environmental search that should be done pre-contract in every purchase, the solicitor should also carry out an index map search to reveal whether the title to the property is already fully or partially registered.

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31
Q

When should the buyer’s solicitor carry out a company search?

A

When the seller is a company

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32
Q

What is the name of the Handbook under which mortgages are carried out?

A

Most mortgages are handled under the terms of the UK Finance Mortgage Lender’s Handbook and the Building Societies Association Mortgage Instructions.

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33
Q

What is a mortgage valuation report?

A

A mortgage valuation report confirms that the property represents good security for a loan and require the buyer to provide evidence that they can afford the mortgage. The lender will do this before entering into a mortgage.

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34
Q

How will the buyer’s solicitor determine what enquiries to raise?

A
  • investigate the title
  • Read the PIF and other contract documents
  • Consider the results of the pre-exchange searches
  • Report to their buyer client on the above matters
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35
Q

When will a landlord’s service of a valid section 25 notice under the Landlord and Tenant act result in the tenant being entitled to statutory compensation?

A

If the ground serving as the basis for termination is not the fault of the tenant, statutory compensation is available unless other suitable premises are available.

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36
Q

What is the memorandum of exchange and what documents should appear in it?

A
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37
Q

According to the Code for Completion by Post, how should completion monies be sent to the seller’s solicitor?

A

By a bank transfer of cash

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38
Q

What does the draft contract which the seller’s solicitor send to the buyer contain?

A
  • The draft contract in duplicate
  • The Property Information Form and the Fittings and Contents Form (both completed by seller)
  • A copy of the seller’s title
  • Any guarantees or planning permissions
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39
Q

What does it mean to raise a requisition on title?

A

This is where the buyer’s solicitor raises any enquiries with the solicitor and requires them to be resolved before exchange of contracts

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40
Q

Who is responsible for remedying defects on the title?

A

The Conveyancing Protocol requires that the seller’s solicitor take care of any defects as part of their investigation of title, rather than waiting for the buyer to raise this as an enquiry

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41
Q

What is the best way of resolving a defect in a title?

A
  • Asking the seller to enter into a deed or variation or rectification to solve the problem.
  • If this is not practical, or not possible, the buyer may require the seller to provide them with defective title indemnity against any issues arising from the defect in the title and include this as a special condition in the contract
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42
Q

What appears on the Property register of title?

A

The property register identifies the property by its postal address and specifies the legal estate held. If any rights benefit the property, they will appear as a notice on the Property register

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43
Q

What appears on the Proprietorship register?

A

This specifies the class of title held and the name of the current holders of the estate. If there is a restriction affecting the title (e.g. Form A restriction, it will appear on the Proprietorship Register)

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44
Q

What appears on the Charges register?

A

Details of encumbrances on the land, for example:

  • Restrictive covenants
  • Mortgages
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45
Q

What document is required to alter the terms of a lease?

A

A deed of variation

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46
Q

What are the duties of a management company with respect to residential and commercial leases?

A

It maintains the common areas of the leased premises and performs other duties as
specified in the leases

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47
Q

True or false? In a long-term residential lease, the rent is typically a nominal sum because the tenant will have paid a large premium at the beginning of the lease.

A

True

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48
Q

True or false? In a long-term commercial lease, the rent is typically a nominal sum because the tenant will have paid a large premium at the beginning of the lease

A

False - the rent payments will be a lot higher each month as a premium will not have been paid

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49
Q

What is the commercial equivalent of the Standard Conditions of Sale?

A

The Standard Commercial Property Conditions

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50
Q

What do the Standard Commercial Property Conditions contain?

A

Part one - general conditions (these apply unless expressly excluded)

Part two - provisions that will apply only if expressly incorporated

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51
Q

What is the document which sets out best practice when negotiating a commercial lease?

A

The Code for Leasing Business Premises

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52
Q

Can a landlord in a commercial lease reject an assignment of a lease?

A

Yes, the landlord’s consent to assignment is required, and they will normally deny this if they are not satisfied that the new tenant is of good standing and will be able to afford the rent

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53
Q

In a commercial lease, who bears the fees of completing the licence to assign?

A

The outgoing tenant. The tenant’s solicitor will give an undertaking to pay these costs to the landlord’s solicitor

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54
Q

What happens in the process of ‘deducing title’?

A

The seller’s solicitor will send a copy of the title to the buyer’s solicitor

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55
Q

Is it generally permissible to include an absolute prohibition against assignment
of a long-term property lease?

A

Yes, in a long-term commercial lease, but not in a long-term residential lease

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56
Q

In a long-term commercial lease, does the landlord have an implied right to periodically increase rent?

A

No, a rent review clause must be explicitly included in the lease

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57
Q

Stage 1: Which of the following actions will a solicitor take when they have been instructed in a conveyancing transaction?

A
  • Take instructions from their client
  • Send a client care letter to the client
  • Obtain appropriate identification documents from their client
  • Carry out appropriate due diligence checks
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58
Q

True or false? In most cases, when a person sells their home, they will have to pay capital gains tax (CGT) on the gain realised from the sale?

A

False, due to application of Private Residence Relief

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59
Q

If the seller has to pay CGT, when must it be paid?

A

Within 60 days of the completion date

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60
Q

What will the buyer’s solicitor advise their client to do at the beginning of a transaction?

A

To have a structural survey carried out of the property to determine whether there are any structural defects

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61
Q

When will Private Residence Relief apply to negate the needs to pay CGT?

A
  • The dwelling house has been their only or main residence
  • The have not been absent during their period of ownership (other than the excepted periods)
  • The grounds or garden do not exceed 0.5 hectares
  • No part of the home has been used exclusively for business purposes during the period of ownership
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62
Q

Does the seller have to submit a self-assessment tax return if private residence relief applies?

A

No

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63
Q

What are the consequences of a solicitor breaching an undertaking in a conveyancing transaction?

A

(1) The solicitor may be subject to an action for specific performance – an order requiring
them to comply.

(2) The solicitor may be subject to disciplinary action or sanctions by the Solicitors
Regulation Authority.

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64
Q

True or false? It may be permissible for a solicitor to represent both the buyer and a LENDER in a property transaction, but the solicitor must still maintain client confidentiality between the two.

A

True, although this is not best practice.

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65
Q

What is the Law Society Conveyancing Protocol?

A

It is a statement of best practice for residential conveyancing.

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66
Q

In which of the following situations must an Energy Performance Certificate (EPC) be obtained?

A

When there is an existing EPC which is more than 10 years old.

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67
Q

If the landlord of a commercial premises approves an assignment of the tenant’s
lease after determining the assignee is of good financial standing, what document
would the landlord’s solicitor typically draft to create privity of contract between the
landlord and the assignee?

A

A licence to assign

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68
Q

What is the process for the seller’s solicitor to investigate title in registered/ unregistered land?

A

If the title is registered, the solicitor will download an official copy of the register of title and title plan from HMLR and will review all the documents provided

If the title is unregistered, the solicitor must locate and review the title deeds

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69
Q

If a seller’s title is not registered and the property is subject to a mortgage, where would the seller’s solicitor typically find the seller’ deeds?

A

They will typically be in possession of the mortgage lender, and to obtain them, the
solicitor must give an undertaking to not part with the deeds until the seller has funds to
pay off the mortgage.

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70
Q

True or false? If the seller’s solicitor discovers defects in the seller’s title and is following the Law Society Conveyancing Protocol, they should wait to see if the buyer’s solicitor raises an enquiry about the defect before taking any action.

A

False, the Protocol requires the seller’s solicitor take care of any defects as part of
their investigation of the seller’s title.

71
Q

True or false? In a conveyancing contract, the seller must disclose latent defects
and latent burdens on the land but need not disclose patent defects.

A

True

72
Q

What will the duty to disclose latent defects in the property not cover?

A

Physical defects in the property (e.g. rotten timber within walls).

So the seller must disclose an underground easement or restrictive covenant, but does not need to disclose rotting walls (caveat emptor) or an easement which is visible on inspection (patent defect)

73
Q

Which best describes the doctrine of ‘caveat

emptor’ in a conveyancing transaction?

A

It is the buyer’s responsibility to inspect the property for both patent and latent
physical defects in the property.

74
Q

What is included in the contract package on the sale of a registered freehold property?

A

The draft contract in duplicate.

The Property Information Form.

The Fittings and Contents Form.

A copy of the title, any relevant documents, and the title plan.

Any guarantees or copy planning permissions.

75
Q

Which of the following are included in a contract package on the assignment of
an existing registered lease?

A

The draft contract in duplicate.

Official copies of the leasehold title and plan.

A copy of the lease of the property.

The Property Information Form, Leasehold Information Form, and Fittings and
Contents Form.

A copy of the landlord’s freehold register of title and plan.

A copy of the insurance policy for the whole building.

A copy of the last three years’ service charge accounts.

76
Q

True or false? A Contract Incorporating the Standard Conditions of Sale is divided into three parts – the particulars of sale, the standard conditions of sale, and the special conditions of sale.

A

True

77
Q

True or false? The Standard Conditions of Sale are used in both residential and
commercial transactions

A

False, the Standard Commercial Property Conditions are used in commercial
conveyances.

78
Q

What is contained in the standard conditions of sale?

A

Includes provisions for payment of VAT, the

deposit, risk of loss, and the like.

79
Q

What is included in the particulars of sale?

A

The names of the parties, whether the property is

freehold or leasehold, the type of title guarantee given, the completion date, and the purchase price.

80
Q

What is included in the special conditions of sale?

A

Includes conditions specific to the particular
transaction, such as whether the property will be vacant on completion and whether a different time for completion has been agreed.

81
Q

Under the Standard Conditions of Sale, does the purchase price and the contents price include VAT?

A

Yes

82
Q

True or false - A lease of commercial premises is generally exempt from VAT, but a landlord may elect to tax in order to recover input tax?

A

True

83
Q

If the seller has a related purchase of a property for their residence in England and Wales, can they use the deposit received on their sale towards the deposit required on that related purchase transaction?

A

Yes

84
Q

Under the Standard Conditions of Sale, who holds the deposit and how is it held?

A

The seller’s solicitor as stakeholder for both parties.

85
Q

What is the difference between holding funds as stakeholder rather than as agent in a conveyancing transaction?

A

A stakeholder will not release the funds until completion, but an agent may release
funds to the seller immediately after exchange.

86
Q

Under the Standard Conditions of Sale, when does the risk of loss pass from the seller to the buyer for the damage to the property?

A

On exchange of contracts

87
Q

Under the Standard Conditions of Sale, if the parties have not included a completion date, when will completion be held?

A

20 working days after exchange

88
Q

What will be included in the Property and Information Form?

A
  • The position of the property’s boundaries
  • Any disputes with the neighbours
  • Any building work and / or alterations by the seller to the property
  • Occupiers of the property
  • Utilities that the property is connected to
89
Q

What form is annexed to a conveyancing contract to indicate personal property
that is included or excluded from the sale?

A

A fittings and contents form

90
Q

What does it mean when the buyer’s solicitor ‘raises requisitions on title?’

A

The buyer’s solicitor has found a potential defect in title and has raised an enquiry with the seller’s solicitor.

91
Q

Which of the following can be used to resolve a problem if a defect of title is identified?

A
  1. Deed of Variation
  2. Deed of Rectification
  3. Indemnity insurance
92
Q

In addition to confirming that the epitome of title shows an unbroken chain of ownership from the root of title to the current seller, what else should the buyer’s solicitor look for when investigating an UNREGISTERED title?

A
  1. Whether the land should have been registered with HMLR earlier due to an earlier
    event
  2. Whether the documents have been stamped to indicate any relevant stamp duty
    has been paid.
  3. Whether the seller has the ability to sell the property.
  4. Whether any third parties might have rights in relation to the land
93
Q

True or false? When investigating a registered title, the buyer’s solicitor will be checking that the title number matches that in the contract and that the name on the register matches that in the contract.

A

True

94
Q

What will a basic local search reveal?

A
  • Whether the property is subject to charges owed to the local authority,
  • Planning information
  • listed building charges;
  • Roads, public rights of way
  • Tree Preservation Orders
95
Q

How would the buyer’s solicitor figure out if the property abuts common land / town or village green or if any gas pipelines affect the property?

A

By carrying out an optional search

96
Q

What is a search which a buyer’s solicitor must carry out if title is unregistered?

A

Search of the index map, to see if the property is fully or partially registered

97
Q

True or false? A buyer’s solicitor typically will carry out a bankruptcy search only
if the buyer is obtaining a mortgage.

A

True, through HMLR’s online portal

98
Q

Which of the two location specific searches (searches that will be carried out only if the location of the property indicates an issue might arise)?

A
  • A coal mining search.

- A chancel liability search to see if the property is subject to an obligation to maintain a chancel in a church.

99
Q

True or false? It is important for a buyer to visit the property to look for evidence of a right of way or a person in occupation and to check the physical condition of then property.

A

True

100
Q

Where would the solicitor for the buyer of commercial property look to find
information about the property’s boundaries, condition of the property, fire safety
information, planning regulations, etc?

A

The response from the seller’s solicitor to the Commercial Property Standard
Enquiries (CPSE) that the buyer’s solicitor would send to the seller’s solicitor.

101
Q

What is considered development under the Town and Country Planning Act 1990?

A
  • Carrying out building, engineering, mining or other operations in or over land (including structural changes or additions to buildings)
  • Making any material change of use of any buildings or land
102
Q

Are minor internal works considered development and do they require planning permission?

A

No they are not development, and they do not require planning permission

103
Q

True or false? Although a small home extension, adding a porch or conservatory,
or putting up a fence may be development, deemed permission applies to allow these
to be built without obtaining express permission.

A

True, under Town & Country Planning (General Permitted Development) Order 1995.

104
Q

Can deemed permission be disapplied?

A

Yes by an Article 4 Direction. This means that if a property owner wants to make even minor changes to the property, they will need to apply for planning permission.

105
Q

What is permitted development?

A

Another name for deemed permission; provides blanket permission for minor development.

106
Q

What is detailed permission?

A

This is permission which allows development to commence subject to a number of planning conditions that will have to be met

107
Q

What is outline permission?

A

This gives broad permission to the principle of development and gives consent subject to reserved matters

108
Q

If a person obtains outline permission, how long do they have to obtain approval on reserved matters?

A

3 years. And work must then start within 2 years of the approval.

109
Q

If a person obtains detailed permission to undertake a development, is there a time limit on when the work must be performed?

A

Yes, the work must be commenced within 3 years from the date of permission.

110
Q

When must an enforcement notice be served for unauthorised building works?

A

4 years

111
Q

Is planning permission required when there is a change of use class?

A

Yes

112
Q

When must an enforcement notice be served for material change of use?

A

Within 10 years

113
Q

True or false: If a property is a listed building, there is no time-limit for enforcement?

A

True, and a listed building also requires a listed building consent form if it is to be demolished, extended or altered (as well as planning permission)

114
Q

True or false? Planning problems run with the property so a new owner could be liable for problems with works carried out by a previous owner

A

True

115
Q

What is a listed building?

A

An old building of special architectural interest that cannot be altered without a listed
building consent

116
Q

Which actions require compliance with Building Regulations?

A
  • Building works
  • Installation of windows.
  • Electrical works.
  • Installation of a boiler.
117
Q

What is the enforcement period for a failure to comply with Building regulations?

A

12 months, but an injunction may be sought at any time

118
Q

True or false? A solicitor instructed by a buyer in a conveyancing transaction should enquire into the source of the funds used by the buyer as a deposit or to pay for a portion of the property to avoid possible liability under the anti-money
laundering laws.

A

True, as a solicitor may otherwise be held liable for an offence under the Money
Laundering, Terrorist Financing and Transfer of Funds (information on the Payer)
Regulations 2017.

119
Q

What do the Standard Conditions of Sale say about the title and the ability to transfer it?

A

The standard conditions provide that the seller sells the property with full title guarantee. This means that:

  • The seller is entitled to sell the property
  • They will, at their own cost, do all in their power to transfer the title to the buyer
  • the seller is selling the property from all charges or encumbrances other than those disclosed in the contract
120
Q

If a client is trying to decide between several different mortgages offered by different lenders, may the buyer’s solicitor give advice as to which mortgage is the best deal for the client?

A

No, as a solicitor can give only generic advice as to mortgages (such as explaining the
differences between the various types)

121
Q

What is the UK Finance Mortgage Lender’s

Handbook?

A

a series of standardised instructions to conveyancers and variations on these instructions that are required by particular lenders.

122
Q

If a solicitor is representing the lender in a conveyancing transaction, under the UK Finance Mortgage Lender’s Handbook, is the solicitor required to ensure the seller is legally represented and that funds are to be sent to
the seller’s solicitor’s account?

A

Yes

123
Q

Does the UK Finance Mortgage Lender’s Handbook require a solicitor to ensure there are no discrepancies between the description of the property as valued by the lender’s valuation and the title description being examined?

A

Yes

124
Q

Under the UK Finance Mortgage Lender’s Handbook, when a solicitor is acting for a buyer and lender, is it the solicitor, buyer, or lender who is named as the applicant on the HMLR pre-completion searches?

A

It is the lender who should be the applicant

125
Q

What is the maximum age for pre-completion searches at the date of the completion, other than HMLR priority searches, required by the UK Finance Mortgage Lender’s Handbook?

A

Six months

126
Q

Under the UK Finance Mortgage Lender’s Handbook, if a solicitor is acting for the buyer and lender, does the solicitor have a duty to establish whether any adult other than the mortgagor will be living in the premises upon completion and to obtain a consent form to ensure the non-owner does not acquire any rights in the property?

A

Yes

127
Q

If part of the purchase of a property is funded from a private source, is the buyer’s solicitor required to carry out checks on the source of the funds in accordance with MLRO requirements?

A

Yes

128
Q

What is the certificate of title and when should it be sent?

A

A form submitted by the buyer’s solicitor to the lender confirming a series of statements which indicate that the title is good and marketable, and it acts as a request for the release of the mortgage advance.

129
Q

What is the solicitor’s duty when representing a lender and selling a property with an EXISTING mortgage?

A
  • Obtain the redemption figure up to the date of completion
  • Advise the seller’s lender of the date of completion
  • Transfer the required redemption monies to the seller’s lender on completion
  • Deal with the discharge of the mortgage registered on the property
130
Q

What is the solicitor’s duty when representing a lender who is providing a mortgage for the purchase of the property?

A
  • Verify the buyer’s identity
  • Investigate title to the property and raise searches and enquiries
  • Advise the buyer on the contents and effects of the mortgage deed
  • Arrange for the buyer and lender to sign the mortgage deed
  • Submit a certificate of title to the lender
  • Register the mortgage post-completion
131
Q

What undertaking does the buyer’s solicitor give to the lender after completion?

A

To register the buyer’s mortgage. The solicitor MUST therefore recover any registration-related sums from the buyer client prior to completion.

132
Q

What are the priority periods for registration of a mortgage

A

Registered land - 30-working days from OS1 or OS2 search

Buyer is a company - registration at Companies House within 21 days

If mortgage triggers first registration of the land - 2 months

133
Q

When a client has a related sale and purchase of a house, must both transactions exchange on the same day and have the same completion date?

A

Yes, this is essential

134
Q

What are the three methods of exchange?

A
  • Phone
  • Post
  • Person
135
Q

What is a Formula C exchange?

A

Where there is a chain of transactions and deposit monies are to be sent directly to another firm further up the chain. Two calls are made: The first to confirm the solicitors are ready and the second to confirm actual exchange.

136
Q

What is a Formula A exchange?

A

Where one solicitor (usually the seller’s) holds both signed parts of the contract, the buyer’s solicitor having sent a signed contract and the deposit cheque in advance. The seller’s solicitor confirms both parts are the same and inserts the exchange and completion dates on both.

137
Q

What is a Formula B exchange?

A

Where each solicitor holds their own client’s signed part of the contract. The solicitors will confirm in a call that the versions are the same, and each will send their signed part to the other.

138
Q

How will a buyer protect their interest if a completion date is ore than a couple weeks after exchange?

A

Registered land: registering the estate contract on the charges register of title

Unregistered land:

139
Q

What should the parties do if they wish to vary their contract after it has been signed?

A

They should re-execute new contracts with the new terms reflected in it

140
Q

Pre-completion: What information must be seller’s solicitor include in the Completion Information and Undertaking form?

A
  • Details of the client account to which the purchase money must be sent on the day of
    completion.
  • The amount due on completion.
  • Where the keys to the property will be available for collection on the day of
    completion.
  • An undertaking to pay off the mortgage out of the sale proceeds and to provide
    evidence of discharge when received.
141
Q

What is an engrossment?

A

The final version of a lease prepared by the landlord’s solicitor and including an
original signed by the landlord and the counterpart signed by the tenant.

142
Q

True or false - After exchange and before completion, the buyer’s solicitor will
repeat certain searches and advise the buyer to repeat a physical inspection, and if
new problems affecting the title are found, the buyer’s solicitor may demand that the
seller’s solicitor resolve the problem.

A

True

143
Q

What document is used by a landlord to consent to the assignment of an existing lease?

A

A licence to assign

144
Q

Under the Standard Conditions of Sale, if the seller has paid service charges in advance, the parties must use best estimates to apportion the charges and the BUYER will have to pay the shortfall?

A

True

145
Q

What are the three methods by which completion may occur?

A
  • Personal attendance
  • By agent
  • By post
146
Q

Under the Code for Completion by Post, the seller’s solicitor acts as the agent for the buyer’s solicitor in that they will date and execute the transfer?

A

True

147
Q

When must the seller’s solicitor confirm completion send the executed transfer document to the buyer’s solicitor, and by what means?

A

By first class post or DX as soon as possible, but in any event no later than the end of the working day following completion.

148
Q

When must the seller’s solicitor notify the buyer’s solicitor that completion funds have been received?

A

Immediately

149
Q

True or false - on completion, the contract merges with the purchase, meaning the purchaser can no longer sue on the contract terms?

A

True

150
Q

Who has the duty to pay SDLT on the transfer and what is the deadline?

A

Buyer’s solicitor - 14 calendar days

151
Q

Who has the duty to pay CGT and what is the deadline?

A

Seller’s solicitor (as obviously they are making gain) - deadline is 60 days

152
Q

Remedies: Before completion

A
  • Specific Performance
  • Damages
  • Rescission
153
Q

How are damages calculated if the buyer is in breach?

A

An innocent seller can recover the difference in value between the contract price of the home and the value on resale. If the value of the home is higher, then they will be advised to simply keep the deposit

154
Q

Remedies: delayed completion

A

Time of the essence: Rescission of contract
Time not of the essence: damages for delay and interest
Buyer fails to send purchase money by 2pm: seller entitled to interest at contract rate

Innocent party serves notice to complete

155
Q

What time period is afforded under the notice to complete?

A

10 working days, excluding the date of service of notice

156
Q

Remedies: failure to complete after notice served

A

Buyer in default:

  • Rescind the contract
  • Retain the buyer’s deposit
  • Resell the property
  • Claim damages

Seller in default

  • Rescind the contract
  • Reclaim the deposit with interest
  • Claim damages
157
Q

When will rescission be available for misdescription?

A

Misdescription is an error in the property particulars in the contract, such as stating it is a freehold when it is in fact a leasehold.

If it is significant, it will entitle the innocent party to rescind and claim damages

158
Q

What claims are available after completion and what remedies are available?

A
  • Misrepresentation

- Breach of title guarantee (damages)

159
Q

If a party breaches a conveyancing contract before completion, may the innocent party seek specific performance?

A

Yes, because land is considered unique

160
Q

Under the Standard Conditions of Sale, when may an innocent party seek rescission of the contract? (Rescission and damages would be claimed)

A
  • Whenever there has been a misrepresentation by the other party
  • Whenever there has been a misdescription of the property by the other party and the
    innocent party would be taking something substantially different to what was expected.
  • When the landlord’s consent is required and the licence to assign is not forthcoming (if not received 3 days before conpletion)
161
Q

Commercial leases: What methods must be used to bring a commercial lease with security of tenure to an end?

A
  • Forfeiture by the landlord (clause must be included)
  • Surrender (both parties agree to give up the lease)
  • Landlord serves s.25 notice
  • Tenant serves s.26 notice
162
Q

True or false? Commercial leases of less than 6 months are exempt from the security of tenure provisions under The Landlord and Tenant Act 1954 (Part ll)?

A

True

163
Q

What are the three requirements for contracting out of the security of tenure provisions?

A
  • The landlord’s health warning
  • The tenant’s declaration
  • Reference to these in the lease
164
Q

What must be included in the Landlord’s health warning?

A
  • An explanation of what security of tenure is
  • That the tenant will be giving up rights under the lease
  • The consequence of not having these rights
  • That they should seek professional advice
165
Q

When must the health warning notice be served?

A

14 days before the commencement of the tenancy

166
Q

Can the 14 days period for the health warning be waived?

A

Yes

167
Q

What must the tenant’s declaration include?

A

Confirmation that they have received the health warning and agree to contracting out of the Act and its consequences

168
Q

When must the Landlord’s Section 25 notice be served?

A

Between 6-12 months before they wish the existing tenancy to end

169
Q

What are the statutory grounds for bringing a tenancy to an end?

A

a) The tenant’s failure to carry out repairing obligations
b) The tenant’s persistent delay in paying rent
c) The tenant’s substantial breaches of other obligations
d) The availability of suitable alternative accommodation
e) (if the premises has been sublet) - the landlord requires the whole property for subsequent letting
f) The landlord intends to demolish or reconstruct the premises
g) The landlord intends to occupy the building

170
Q

Which of the statutory grounds are discretionary (i.e. for which ones may the Court order a new tenancy to start in any event?)

A

a) The tenant’s failure to carry out repairing obligations
b) The tenant’s persistent delay in paying rent
c) The tenant’s substantial breaches of other obligations
e) (if the premises has been sublet) - the landlord requires the whole property for subsequent letting

171
Q

When will the tenant be afforded statutory compensation?

A
  • If the landlord establishes one of the no-fault grounds AND there is no suitable accommodation available
172
Q

When must the tenant serve a section 26 notice and how long does the landlord have to object?

A

Between 6-12 months before they want the new tenancy to start

The landlord has 2 months to object

173
Q

True or false - If the landlord and tenant are unable to agree on the terms of the new lease, it will be decided by the court?

A

True

Property Practice (1 decks)

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