Property Practice Flashcards
What is the Conveyancing Quality Scheme (CQS)?
the CQS, is a quality standard for residential conveyancing practices. If a firm has CQS accreditation, use of the Protocol in conveyancing transactions is compulsory.
What is The Portal?
name of His Majesty’s Land Registry’s web-based system for accessing title and other documents
What is the Law Society Conveyancing Protocol?
statement of best practice for conveyancing. It contains a set of steps to follow when acting in the sale and/or purchase of a home for an owner-occupier.
A solicitor is acting for a buyer and the buyer’s lender in relation to the purchase of a residential flat. The mortgage is on standard terms. Pre-exchange, the solicitor discovers that the property is structurally unsound. The solicitor reports this to the lender in writing without liaising with the buyer first. Upon receipt of the solicitor’s letter, the lender withdraws the mortgage offer. The buyer is very angry and threatens to complain about the solicitor.
Has the solicitor breached any duties under the Solicitors Regulation Authority Code of Conduct?
Reporting the matter to the lender without first seeking the buyer’s consent is a breach of the duty of confidentiality to the buyer. 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. Here, the solicitor did not have the buyer’s consent to report the structural issues to the lender before doing so. Thus, the solicitor has breached his duty of confidentiality to the buyer. (Note that if the buyer had refused to allow the solicitor to disclose the information, the solicitor probably would have had to cease acting for the lender because he would be unable to represent the lender effectively.)
A man is selling his property and has instructed an estate agent to deal with the sale. The man has also instructed his existing solicitor to act for him on the sale. A buyer is found but the buyer does not know which solicitor to instruct to deal with his purchase. The estate agent suggests that the buyer use the same solicitor as the seller to ensure that the transaction proceeds quickly.
Which of the following best describes the appropriate response to this suggestion by the estate agent?
The solicitor should decline to act for the buyer due to the possibility of a conflict of interest between the parties. A solicitor must avoid a conflict of interest or ‘significant risk’ of a conflict of interest between the solicitor and the client or between two or more clients in the same transaction. One key conflict to avoid in the conveyancing transaction is acting for the seller and the buyer of the same property in the same transaction, which would be the case here if the solicitor also represents the buyer. When parties have conflicting interests, the solicitor should decline to act for the additional party or parties. Thus, the solicitor should decline to act for the buyer.
A seller has agreed to sell their property to a buyer at a price of £100,000. The buyer is getting a 95% mortgage. They have applied for the mortgage offer and it is awaited. The buyer meets a friend in the pub who tells them that the purchase will not go ahead because the buyer does not have a 10% deposit to offer.
Is the buyer’s friend correct?
(B) The buyer’s friend is incorrect, as under the Standard Conditions of Sale, the buyer and seller may negotiate the deposit payable. The Standard Conditions of Sale include a provision for a 10% deposit. Here, it appears the buyer only has 5% deposit (evidenced by the fact that they are getting a 95% mortgage). However, if the seller agrees to this reduced deposit, the sale may go ahead. (A) is incorrect because, as just discussed, although the Standard Conditions of Sale require a 10% deposit, it is possible to negotiate a different figure.
A married couple have viewed a property which they are very interested in buying. However, they were concerned when they viewed the property to see that there were a number of horses roaming freely on the open grassland at the front of the property. They also noticed a number of local people walking their dog across the land.
What will the solicitor acting for the couple do to discover the nature of the activities which they observed?
(E) The commons registration search is an optional part of the local search. It is used to discover whether the property abuts or is adjacent to a town or village green in common land, that is, it will discover land that is designated for public use.
How many parts are there to a local search?
A local search has two parts: the first part reveals whether there are registrations by the local authority in the local land charges register. The second part is a standard set of enquiries of the local authority which include questions about roads fronting the property, public rights of way, and planning entries and building regulations relevant to the property. Although the commons registration search is part of the local search, it is optional and not part of the standard enquiries.
When is an environmental search carried out?
This search which should be done on every purchase. It reveals whether there is land which has been put to contaminated use in the vicinity of the property being searched against.
What is a repayment mortgage?
A repayment basis mortgage is one that includes an element of capital and interest in each payment. It is the most common type of mortgage. At the end of the mortgage term, the entire loan is paid off.
What are the standard conditions of sale?
The standard conditions of sale are the ‘small print’ in the middle of the contract which covers issues such as: formation of the contract, service of notices, matters subject to which the property is sold, physical condition of the property, details regarding completion, and remedies for late completion or non-completion. (B) is incorrect because the key transactional details regarding the parties, the purchase price, and details of the property are known as the ‘particulars of sale’.
A woman has obtained a grant of probate and has instructed a solicitor to act for her in relation to the sale of her deceased mother’s property. The woman is selling the property on behalf of the estate as a personal representative but has never lived in or visited the property herself.
Which title guarantee is most appropriate in this circumstance?
Responses
A limited title guarantee is narrower in scope than a full title guarantee; in it, 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.
If no date specified between parties, under standard conditions of sale when will completion take place?
The standard conditions of sale provide that if the completion date is not inserted into the contract on exchange, completion will take place 20 working days after exchange.
A solicitor is acting for a first-time home buyer who will be financing her purchase with a mortgage. The conveyance is taking place under the Law Society Conveyancing Protocol (the ‘Protocol’). The buyer is anxious to see a copy of the contract and asks her solicitor when this will be ready.
In a Protocol transaction, who prepares the contract package?
In a Protocol transaction, the seller’s solicitor will draft the contract and send the contract package to the buyer’s solicitor. The contract package will comprise: the draft contract in duplicate; the Property Information Form and Fittings and Contents Form, both completed by the seller; a copy of the seller’s title (or epitome of title if the title is unregistered), any other relevant title documents, and title plan; and any guarantees or planning permissions. Therefore, all of the other answers are incorrect.
What is the effect of a notice to complete?
Service of the notice to complete makes time of the essence. If the defaulting party fails to complete within 10 working days, the innocent party can then rescind the contract.
Within what timescale must the Stamp Duty Land Tax return be sent?
14 calendar days.
The buyer’s solicitor must send a Stamp Duty Land Tax return to HMRC within 14 days of completion. Penalties and interest are payable if the return is not filed and any Stamp Duty Land Tax owed is not paid within this 14-day period. The 14-day period applies whether the title is registered or unregistered.
A trainee solicitor is dealing with their first completion involving an unregistered title. The trainee notes that a full land charges search has been carried out.
What is the significance of the search?
It gives rise to a 15-working-day priority period within which completion should take place.
If title is unregistered, a full land charges search must be carried out against the full name of the current estate owner for the full period of their ownership. The search result confers a 15-working-day priority period during which the transaction should complete. Any application to register a land charge against the owner made during the 15-day period will be held until the buyer’s priority period has expired. If the transaction completes during the 15-day period, such registration will be ineffective, but if completion goes beyond the 15-day period, the registration will be effective against the buyer and the solicitor will probably be liable for the costs of removing the land charge due to negligence. Thus, the remaining answers are incorrect.
A solicitor has agreed to prepare a presentation to explain the process of completion to the new recruits in a conveyancing department.
What are the methods of completion that the solicitor will refer to in the presentation?
personal attendance, agent, post.
Do not confuse these with the methods of exchange: person, post, and phone. It is not possible to complete by phone. Thus, the remaining answers are incorrect.
