Property practice Flashcards
Caveat emptor
Buyer beware
Buyer’s responsibility to inspect the property for physical defects
Seller’s duty to disclose latent defects doesn’t extend to physical defects in the property (for example, rotted timber within the walls)
What’s in the particulars of sale?
Names of parties, if property is freehold or leasehold, type of title guarantee, completion date and purchase price
What’s in the standard conditions of sale?
Provisions for payment of VAT, deposit, risk of loss etc
What’s in the special conditions of sale?
Conditions specific to particular transaction
If vacant on completion, whether a different time for completion has been agreed
A full title guarantee form seller provides:
Guarantee that they are entitled to sell the property
That they will do all in their power to transfer the purported title to the buyer
They are selling the property free from all charges or encumbrances other than those disclosed in the contract
Parties might agree that the seller provides no guarantee or limited title guarantee which warrants:
The seller has not created any charges or granted any rights during their period of ownership that have not been disclosed in the contract
If completion date isn’t in the contract on exchange, the Standard Conditions of Sale provide that completion will take place:
20 working days after exchange
If a defect in title is identified, what is the best way to resolve the problem?
Enter into a deed of variation or a deed or rectification
How many years do you have after getting outline permission to make full application for permission on reserved matters?
3 years
How long after getting permission on reserved matters must work start?
Work must start within 2 years
How long after getting detailed permission do you have to start work?
Work must start within 3 years
Time period the local authority has to serve an enforcement notice for unauthorised building works?
Enforcement notice for unauthorised building works must be served within 10 years
Time period for local authority to serve enforcement notice for material change of use?
Must be within 10 years of the breach
Time limit for LA enforcement action regarding breach of listed building status
No time limit
Time period for local authority to take enforcement action against a person who does not comply with building regulations?
Within 10 years of the date of breach
Time period for local authority to seek an injunction to bring building up to standard of building regulations
No time period - can do after enforcement period has passed
Class E commercial building:
Shops, financial and professional businesses, food and drink businesses, offices, medical businesses, leisure and sport businesses
Class F.1 commercial buildings
Non-residential institutions: education, art galleries, museums, public libraries, exhibition halls, places of worship, courts
Class F.2 businesses
Small shops (no larger than 280 sq m) selling essential goods
Repayment mortgage
Borrower pays interest and repays some capital each month
An interest only mortgage
Borrower pays interest for term of the loan and then repays the capital sum at the end of the term
Endowment and pension mortgage
Combined with life insurance policies and pensions. Pay monthly premiums for insurance or pension with intention that they will have sufficient funds to pay off the loan at the end of its term
Sharia compliant mortgage
Compliant alternative to other types of mortgage to address concerns about payment of interest
And OS1 search
Search with priority for whole of a registered property completed prior to completion to temporarily prevent any new charges from being registered that would impact buyer or mortgagee’s rights
Reveals any entries added to the register since date copies were supplied by seller’s solicitor
Provides 30 working day period to complete registration of mortgage free from any intervening interests
OS2 search
Search with priority against part of the property in registered land
Reveals any entries added to the register since date copies were supplied by seller’s solicitor
Provides 30 working day period to complete registration of mortgage from from intervening interests (priority period)
If mortgage completion triggers first reg of land, how long does the buyer’s solicitor have to complete registration of mortgage free from any intervening interests?
2 months
If mortgage completion triggers first reg of land, how long does the buyer’s solicitor have to complete registration of mortgage free from any intervening interests?
2 months
If a buyer is a company, how long does their solicitor have to register the mortgage at Companies House?
Within 21 days of completion
Formula A for exchange
Buyer’s sol sends signed contract and deposit cheque in advance
One solicitor (usually sellers) hold both signed copies of contract and confirms they are the same and enters exchange and completion dates on both
Formula B for exchange
most common
Each sol holds their own client’s signed part of the contract, confirm they are the same and send their client’s signed part to the other
Formula C for exchange of contracts
Used when there’s a chain
Two calls: first to confirm sols are ready and second to confirm actual exchange
What’s in the Completion Information and Undertakings form?
Details of client account that the purchase money should be sent to
Amount due on completion
Where keys will be
Undertaking to pay off the mortgage from sale proceeds and provide evidence of discharge when received
What’s in the Completion Information and Undertakings form?
Details of client account that the purchase money should be sent to
Amount due on completion
Where keys will be
Undertaking to pay off the mortgage from sale proceeds and provide evidence of discharge when received
TR1 and TP1
Documents used for transfer. Typically prepared by buyer’s solicitor
Can be used to convey reg or unreg land
TR1 is for transfer of whole of the land. TP1 for transfer a part of the land
Assent
Used by personal representatives to transfer land to a beneficiary
How many days is priority period for pre-completion full land charges search for sale of unregistered land?
15 working days
Solicitors haven’t otherwise indicated a method of completion, what method is presumed?
Completion by post
What is the latest time the seller’s solicitor may send written confirmation tot he buyer’s solicitor that completion has taken place?
End of the working day following the day of completion
If the title is already registered, how long does buyer’s solicitor have to register title?
30 working days of the date of HMLR official search with priority
How long does buyer’s solicitor have to register mortgage that triggers first reg?
Within 2 months of completion of the mortgage
Timeframe for submitting SDLT return with HMRC?
Within 14 calendar days of completion
If money is owed, must pay the tax within same period
Current nil rate bands for residential and commercial properties for SDLT
Residential: £250,000
Non-residential: £150,000
If a person already owns residential property and buys another one, how much is added to each residential tax band rate?
3%
(Nil rate band goes up to 3%, 5% band to 8% (doesnt apply for transactions under £40,000 or if new property is replacing purchaser’s only or main residence)
What is SDLT based on for grant of a new lease?
Either or both of any lease premium paid and the net present value of the total rent payable over entire lease term
SDLT relief for first time buyers:
0% on first £435,000 and 5% up to £625,000
After exchange, in what circumstances can buyer rescind the contract?
An error or omission was made fraudulently or recklessly or
If the buyer took the property it would be substantially different in quality, quantity or tenure from what they expected to take to their prejudice
Damages available to buyer after exchange if error by the seller was misleading or inaccurate:
Sufficient to put the buyer into the position they would have been if property was as described
(Difference in value between what was described and what was received)
Interest for delay in completion calculated based on:
Purchase price + contents price - any deposit
Applied to period between contractual completion and actual completion
On receiving notice to complete, how long does defaulting party have to complete?
10 days excluding date of service
Section 25 notice
And stat grounds it can be based on
Landlord serves to tenant between 6 and 12 months before they wish tenancy to end
Contract out or enter new lease
Tenant’s breach of obligation (discretionary)
Needs the property back for subsequent letting (discretionary)
Availability of suitable alternative accommodation for the tenant (mandatory)
Intends to demolish or reconstruct premises and can’t do so while tenant there (mandatory)
Intends to occupy the premises (mandatory)
How long does landlord have to say if they will oppose Section 26 notice?
2 months
What’s a Section 26 notice?
Request by tenant for new lease
If landlord not willing to give new lease, must give stat reason (same reasons as s25)
If LL establishes one of s25 mandatory grounds, how is tenant’s compensation calculated?
Tenant occupied for at least 14 years: twice rateable value of the holding
Less than 14 years: rateable value of the holding
Rateable value is set by UK Gov’t valuation office agency
When can court set terms of commercial lease?
Max fixed term?
When parties cannot agree terms
15 years
Priority period provided by full land charges search
15 working days
Priority period provided by full land charges search
15 working days
3 methods of completion
Personal attendance
Post
Agent
Full title guarantee
Guarantee the seller is entitled to sell, they will do everything they can to transfer it to the buyer and selling it free from all charges or encumbrances other than what is disclosed
Limited title guarantee
Seller has not created any charges or granted any rights during their period of ownership that haven’t been disclosed
