Property Practice Flashcards
What information does the seller’s solicitor include in the contract package?
Residential Conveyancing
- Draft contract x 2
- Property Information Form
- Fitting and Contents Form
- Copy of seller’s title, documents mentioned in the title, and the title plan.
- Other relevant documents - eg guaranties for work to be done such as putting in new doors or windows
What information will the seller’s solicitor include in a leasehold contract package?
New lease
- Draft lease should be attached to contract
- Landlord’s freehold title with new lease landlord is often a developer if so additional things to include:
- Copy of any relevant planning permission and or building regulation relating to structure of property.
- Service charge budget
- details of any management company
- ## if property is less that 10 years old,a new warranty
What information will the seller’s solicitor include in a leasehold contract package? Existing lease
- Copy of outgoing tenant’s leasehold title
- existing lease alongside leasehold infor for:
- copies of last 3 years service charge accounts
- copy of landlord’s freehold title
In all cases the basic paperwork for the contract package is the same:
- The contract
- The seller’s title
- And information about the property in question.
Provide an example of a special condition in contract for the seller arranging Restrictive Covenant Indemnity Policy.
Prior to completion the Seller shall arrange a Restrictive Covenant Indemnity Policy for an insured sum of at least (cost of property) in respect of the restrictive covenants in a conveyance dated 13th February 1927 referred to in Entry 2 of the Charges Register of Title No. HP722096. The policy shall be in a form approved of by the Buyer (such approval not to be unreasonably withheld or delayed) and shall be handed over by the Seller to the Buyer upon completion.
Where the sellers have agreed to provide this insurance an additional Special Condition is necessary otherwise any agreement between the parties will not be enforceable if it is not included in the Contract.
What are the elements of a good Root of Title?
Must deal with the whole legal and equitable interest in the property
It must contain an adequate description of property
Doesn’t cast doubt on title
At least 15 years old.
Most common root will be a conveyance on sale.
What type of search will show if land is subject to a restriction from a nearby village green?
A commons registration search, this is an optional enquiry.
What searches are carried out in every case?
Local search- search of local land charges. Financial charges, planning restrictions.
Local water company - establish if property is connected to the public water supply and foul drainage system.
Environmental search - will reveal
if the land upon which property is built has ever been put to contaminative use. If toxic chemicals have even been dumped. The obligation for any clean up can be imposed on landowner if the original polluter can’t be found.
What are some non standard searches?
If title unregistered search of Index Map. Will show of property is already fully or partially registered.
• If buyer obtaining mortgage - Bankruptcy search against buyer’s full name to ensure buyer will be able to get a mortgage.
• If coal mining locality
How long does the local authority have to take enforcement action if work completed without building regulation consent?
1 year
However, unlimited jurisdiction to obtain an injunction to require unsafe work to be remedied or removed.
How can non owning occupiers be dealt with for the lender?
- Get them to sign an occupier’s consent form before completion. This form confirms that they’ll move out of the property should they lender have to repossess.
- Send the form to the non owning occupier but make it clear they should obtain their own independent advice.
Post-Completion
How does a buyer’s solicitor perfect the buyer’s mortgage?
- They register the lender’s charge in the charges register of the title to the property on completion of the conveyance.
- This is done by including the mortgage deed in their application for registration to the land registry.
Time Limits
- Registered within 30 day priority period
- Unregistered within 2 months of completion.
- Company - register at Companies House within 21 days of completion
What are the Pre-Exchange Tasks for the Seller’s solicitor?
- if seller has a mortgage, obtain indicative redemption figure of discharging mortgage.
- Agree form of contact with buyers solicitor.
- Arrange for seller to sign the contract and whether there are any non owning occupiers who need to sign.
- Get seller to confirm they can proceed to exchange.
What are the buyer’s solicitor’s Pre-Exchange Tasks?
- Report to buyer
- confirm they are satisfied about property and wish to proceed
- searches survey, replies to inquiries are all accceptable and haven’t revealed any issues that would deter buyer from going ahead.
- ensure buyer’s finances are in order- considering mortgage offer and how buyer will be paying 10% deposit due once exchange
- agree the contract with the seller’s solicitor
- arrange for buyer to sign and get their authority to exchange.
IT IS ESSENTIAL FOR EACH SOLICITOR TO OBTAIN THEIR CILENT’S IRREVOCABLE AUTHORITY TO PROCEED TO EXCHANGE.
Why would you register the contract?
If there is considerable time between exchange and completion.
- Registered - Notice on charges register
- Unregistered - C(iv) land charge
To put the world on notice that the seller has agreed to sell the land to the buyer.
What happens if the parties want to vary the terms of the contract after exchange?
The solicitors should exchange new contracts with the new term included.
Eg want to change completion date.
Pre-completion tasks for seller’s solicitor
- obtain up to date redemption figure for existing mortgage calculated to the completion date.
- Once received details of amount payable to estate agent if any they prepare the completion statement how much money will net for the sale.
- if seller doesn’t have related purchase will be paid directly to seller on completion
- if they do have a related purchase will be transferred to purchase file ledger
- complete completion information and undertakings form- who holds keys to property, account to send money.
- ensure transfer document is signed by the seller. Transfer document is drafted by buyer’s solicitor.
What are the Pre-completion tasks for the buyer’s solicitor?
- Check completion information and undertakings form. To see seller’s solicitor has given appropriate undertaking to pay all known mortgages out of the sale proceeds.
- submit certificate of title to lender which include request for draw down of mortgage funds.
- conduct pre-completion searches way to protect buyer against any other interests. Obtain priority period
- Registered OS1 whole property
OS2 - part of property
30 working days to complete and register
Unregistered - 15 working days to complete - 2 months to register.
- repeat bankruptcy search or company search if seller is a company
- advise buyer to do another physical
Inspection - draft transfer and send to seller’s solicitor TR1 all of land being transferred.
What are some pre-contract searches and some pre-completion searches?
Pre-Contract
1. Local search
2. Drainage search
3. Environmental search
4. Location specific searches eg coal mining.
Pre-Completion
1. Official search with priority if registered
2. Full land charges search if unregistered
3. Repeat Bankruptcy search
4. If seller is a company repeat company search.
5. Advise buyer to carry out a physical inspection prior to completion in every case.
What are the 3 methods of completion?
- Personal attendance - rare- buyer’s solicitor goes to office of solicitor for seller, hands over bankers draft and takes physical possession of the deeds.
- Agent - also rare- buyer’s solicitor instructs a local firm to attend to completion at seller solicitor’s office.
- By Post - most common. Seller’s solicitor acts as agent for buyer’s solicitor. Seller’s solicitor posts relevant deeds and documents to buyer’s solicitor after money received. Most important is TR1.
What is the effect of completion, when does title pass?
- Unregistered on completion via title deeds
- Registered on registration
What are the post completion tasks for the seller’s solicitor?
- Report completion to seller
- Pay off seller’s mortgage
- pay estate agent’s bill
- send bill for legal fees
What are the buyer’s solicitor’s post completion tasks?
- report completion to client
- send bill for legal fees
- if buyer is a company register charge within 21 days if taken out mortgage
- stamp duty land tax submit return to
HMRC & pay within 14 days of completion - will still need to send return even if none payable
- on leasehold will be paid on premium and net present value lease of over £125,000 ( rent payable in duration of lease)
- register transfer and any new mortgage within 30 working day priority period.
- unregistered: make application for 1st registration within 2 months of completion.
What is security of tenure?
Protection for commercial tenants to remain in premises at the end of tenancy.
If the Landlord & Tenant Act 1954 applies to business tenancy, the tenant has security of tenure.
What are the requirements for contracting out?
- Landlord serves health warning notice. Clearly written statutory notice explaining what security of tenure is and that they will be giving up those rights if they contract out.
- notice should be served at least 14 days before the tenant commits to the lease.
- the tenant must sign a declaration in front of a solicitor confirming that they received the health warning notice and they agree to contracting out and its consequences.
- lease must contain reference to health warning, tenants devaluation and that parties agree to contact out.
