Property practice final Revision Flashcards
After a long search, a comedienne has found her dream home: a cottage in York with unregistered title. The comedienne’s solicitor has begun their investigation of title. In the epitome of title provided by the seller’s solicitor, the comedienne’s solicitor notices a conveyance dated 20 May 2005.
Which of the following best indicates how the comedienne’s solicitor should proceed?
The comedienne’s solicitor should return the epitome to the seller’s solicitor requiring them to make an application for first registration of the title to the land.(A) The comedienne’s solicitor should return the epitome to the seller’s solicitor and require them to make an application for first registration of the title to the land. The conveyance is dated after 1 December 1990, and it is clear from the facts that the title is still unregistered. The conveyance dated 20 May 2005 was a trigger for first registration. Accordingly, requiring the seller to make the application for first registration is the appropriate response. (B) is incorrect both because the question does not make any reference to covenants contained in the conveyance and because it does not address the central point of the question – the fact that the 20 May 2005 conveyance triggered the requirement of first registration. (C) and (E) are incorrect as the comedienne’s solicitor would not make the application for first registration themselves; rather the seller’s solicitor should do so prior to exchange. (D) is incorrect as it is too extreme, given the comedienne is eager to purchase the property. There may be a delay in the transaction (and the comedienne’s solicitor should certainly inform the comedienne of that fact), but the fact that first registration should have been carried out does not necessitate withdrawal from the transaction
A woman is buying a house from her distant cousin. The solicitors for both parties have agreed to use the Law Society Formulae for exchanging contracts by telephone and to exchange using Formula B. They also agree to use the Standard Conditions of Sale, unamended. On the day of exchange, each solicitor holds their own client’s contract and has already confirmed the versions are the same over the telephone.
What are the next steps for the solicitors to effect exchange of contracts?
Each solicitor will send their client’s signed part to each other, and the buyer’s solicitor will send the agreed deposit to the seller’s solicitor to hold as stakeholder.(E) When exchanging contracts by telephone under Law Society Formula B, each solicitor holds their own client’s part of the contract and sends their client’s signed part to the other after confirming the versions of the contract are the same. The buyer’s solicitor will also send the deposit funds to the seller’s solicitor to hold as stakeholder pursuant to the unamended Standard Conditions of Sale. (A) and (C) are incorrect, as each solicitor will send their client’s signed part to the other; it is not only the buyer’s solicitor or the seller’s solicitor who will send their client’s contract to the other solicitor. (C) is also incorrect because it incorrectly provides that the buyer’s solicitor will hold the deposit. (B) is incorrect because although it states that each solicitor will send their client’s signed part to the other, under the unamended Standard Conditions of Sale, the seller’s solicitor will hold the deposit funds as stakeholder. (D) is incorrect because, as explained, under the unamended Standard Conditions of Sale, the seller’s solicitor will hold the deposit as stakeholder, not agent. QUESTION ID: PRP279
QUESTION ID: PRP279
A biscuit company is purchasing a food processing facility. Title to the facility is registered. Contracts have been exchanged. The biscuit company would like to delay completion until the next financial year, so completion is scheduled to take place in five months.
What should the solicitor do to protect their client’s position?
Register an estate contract on the seller’s title at His Majesty’s Land Registry.(B) To protect the biscuit company’s interest, the solicitor should register an estate contract on the seller’s title at the land registry. If completion is to take place more than a couple weeks after completion, the contract should be protected in the registered system by registering the estate contract to put the world on notice of the fact that the contract has been entered into. Here, the facts indicate that completion will not take place for five months and that the title is registered. (A) and (E) are incorrect because the C(iv) and C(i) land charges (to register an estate contract and to register a second or subsequent mortgage, respectively) are used with respect to unregistered land and here the land is registered. (C) is incorrect, as an official search with priority would provide protection (priority) only for a 30 working day period during which the transaction must complete and be registered. Here, as explained above, the purchaser needs their interest protected for five months (when completion is to take place). (D) is incorrect. A home rights notice protects the right of occupation of a non-owning spouse or civil partner.
A man is buying his first home. He instructs a solicitor at a local conveyancing firm on the purchase. Neither the firm nor the solicitor is authorised by the Financial Conduct Authority to carry on a “regulated activity” as defined in the Financial Services and Markets Act 2000 and related secondary legislation. After receiving a mortgage offer from his building society, the man mails a copy of the offer to the solicitor with the attached note:
‘Here’s a copy of my mortgage offer. Can you please take a look at the product and interest rate I’ve been offered and let me know if you think they’re right for me? As you know, I have no prior experience with home purchases and greatly value your opinion.’
How should the solicitor respond to this note?
They should contact the client promptly, declining to answer the questions raised and explaining that a conveyancing firm can give only generic comments on a mortgage offer.(B) The solicitor should contact the client promptly, declining to answer the questions raised and explaining that a conveyancing firm can give only generic comments on a mortgage offer. Under the financial services rules, solicitors cannot give advice about specific financial products such as mortgages and generally may give only generic advice. (A) is incorrect as such a course of action is prohibited. (C) is incorrect because whilst a solicitor may suggest that the client takes independent financial advice, they would breach the duty of confidentiality owed to the client if they simply forwarded the note without first obtaining their client’s consent. (D) is incorrect for the reasons already explained – the solicitor may not give the specific advice sought by the client. (E) is incorrect. Although it is true that the solicitor cannot give specific advice, there is no reason to destroy the note and keep it out of the solicitor’s records.
On 1 January, 2023, a hobby shop owner agreed a 10-year lease on a shop. The premium payable was £200,000, the annual rent payments were set at £7,200, and the net present value of the rent payable is £50,000. Assume the applicable stamp duty land tax (‘SDLT’) rates at the time the lease was entered were:
0% to £150,000
2% £150,001 to £5 million
What is the SDLT payable by the shopkeeper on the grant of the lease?
£1,000(B) £1,000. SDLT is due on both the premium and the present value of the lease, although these are calculated separately and not as a lump sum. Thus, the SDLT on the premium is 2% on the amounts above £150,000. As the premium was £200,000, £50,000 would be taxed at 2% = £1,000. We use the net present value of the lease payments to calculate tax on them (rather than the total actual lease payments). The net present value of the lease payments was £50,000. As that entire amount falls within the 0% band, no tax is owed on the lease payments. Thus, only £1,000 SDLT is owed
A beautician is selling the bungalow she has lived in for quite some time. She has never spoken to her neighbour but is aware that he has been using a private sewage pipe running underneath the beautician’s land for at least 22 years. It is not apparent that there is a pipe running underneath the land and the pipe is not mentioned on the neighbour’s register of title. The beautician is concerned about selling her property quickly and thinks the neighbour’s use of the pipe would deter potential buyers. She would like to omit mention of the issue in the contract of sale.
Which of the following best describes the legal position?
The beautician should disclose the neighbour’s use of the pipe in the contract of sale because it is a latent defect.(E) The beautician should disclose the neighbour’s use of the pipe in the contract of sale because it is a latent defect. A latent defect is an issue which is not apparent from physical inspection of the property. The pipe is not mentioned in the title, but the neighbour is likely to have acquired a prescriptive right by long use (use over 20 years). A latent defect must be disclosed by the seller in the contract. If a seller breaches their duty of disclosure, the buyer may have the right to withdraw from the contract after exchange and claim damages for losses. (A) is incorrect because, as explained above, a latent defect falls within the beautician’s duty of disclosure in relation to the contract. (B) and (D) are incorrect because, as explained above, the latent defect must be disclosed in the contract. As a general statement, however, a seller should always be wary of making any misrepresentation in relation to a matter affecting the property being sold. (C) is incorrect because the defect is latent, not patent. A patent defect is one which is apparent from physical inspection of the property and the seller is not obliged to disclose these in the contract. A right of way is often visible upon physical inspection of the property but the question makes it clear that this is not the case in this scenario as it is not apparent that there is a pipe running underneath the land. Q
A shipping company is purchasing a commercial warehouse. The company has instructed a solicitor to act for it on the purchase. The replies to enquiries provided by the seller confirm that the seller extended the warehouse four years ago to construct additional loading bays. The solicitor requested evidence from the seller that planning permission was obtained, but the seller has been unable to provide this or a building regulations completion certificate. On viewing the property, the shipping company suspects that some of the seller’s work was not done in compliance with building regulations. However, the solicitor assures the shipping company that the extension to the warehouse fell within the permitted development rules and so the local authority would have no ground to bring an enforcement action with respect to the extension.
Is the solicitor correct?
No, because although the local authority has only 12 months to take enforcement action for noncompliance with building regulations, they may seek an injunction to force compliance at any time.(E) The solicitor is incorrect because even if planning permission is not required for building work, a building regulations completion certificate must be obtained from the local authority to confirm that the work has been carried out satisfactorily. Although the local authority has only 12 months in which to bring an enforcement action based on the failure to obtain a certificate, it may seek an injunction to force an owner to bring the property up to standards (if the work was not up to standards) at any time if the work is deemed to be dangerous. (A), (C), and (D) are incorrect because they each state the wrong time period for an enforcement action (it is 12 months and not two years). (A) is also incorrect in that it fails to take into account that an injunction could be issued to enforce compliance. (B) also is incorrect for that reason as well. And (D) has the additional problem that an injunction may be sought at any time.Q
An artist is keen to buy a home in the countryside. She is particularly interested in a property she just viewed, which has a large field in front where she hopes to sit in solitude and make landscape paintings. While she was at the property, though, she noticed several adults playing cricket in the field and others strolling across the land with their dogs. The artist calls her solicitor to discuss what she observed.
What will the solicitor acting for the artist do to discover the nature of the activities which she observed?
The solicitor will carry out a commons registration search.C) 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. (A), (B), (D), and (E) are incorrect because these searches will not provide the information the artist seeks in this instance. (B) and (E) are additionally incorrect because there are no searches with such names.
A hairdresser is selling her bungalow to a friend. The hairdresser instructs a solicitor who has previously acted for her on a different transaction. A week later, the hairdresser’s friend calls her and says he has been unable to find a solicitor. The friend asks if he can use the hairdresser’s solicitor to speed up the process. The hairdresser consults her solicitor about this suggestion.
Which of the following best describes the appropriate response to this suggestion?
The solicitor should decline to act for the friend due to the possibility of a conflict of interest between the parties(B) The solicitor should decline to act for the friend 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 friend. 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 friend. (A) is incorrect because, as explained above, the solicitor should decline to act for the friend so there is no question of obtaining the consent of both parties to proceed due to the significant risk of a conflict of interest arising. (C) is incorrect because the solicitor does not need to cease representing the hairdresser. The solicitor is already acting for the hairdresser and must decline to represent the additional party – the friend. (D) is incorrect because there is no suggestion of a conflict of interest between the solicitor (which is what creates the ‘own interest’ conflict) and that of the parties. (E) is incorrect because, as explained above, the solicitor should not act for both parties in this transaction. In most cases, a solicitor should send a client care letter at the outset of the transaction, but here the solicitor will be acting only for the seller and not also for the buyer.
A cheesemonger rents a shop under the terms of a lease which is protected by the Landlord and Tenant Act 1954 (Part II). The lease is due to end in 18 months’ time. The cheesemonger likes the shop’s location and would like to remain there at the end of the term. However, with rising milk prices they anticipate having to spend more on acquiring cheeses to sell. They would like to save money where they can. Therefore, the cheesemonger serves a section 26 notice on the landlord requesting a new lease at a lower monthly rent.
Did the cheesemonger validly serve the notice requesting a new lease?
No, because the notice must be served between six and 12 months before they wish the new tenancy to start.(D) The cheesemonger did not validly serve the notice requesting a new lease because a section 26 notice must be served between six and 12 months before the new tenancy is to start. The facts provide that the lease has 18 months to run; accordingly, the cheesemonger served the notice too early. (A) and (C) are incorrect because they state the wrong timescale. (B) is incorrect because a section 25 notice is the notice a landlord would serve to end the tenancy. (E) is incorrect as it is not a legal requirement for a solicitor to draft the notice (although in this case, the tenant might wish that they had taken the advice of a solicitor to avoid the mistake that they made).Q
A man invested in residential properties which he then leased to others. On 1 October, 2021, the man bought a flat in Bristol to add to the five flats he already owned. He paid £400,000 for the flat. The stamp duty land tax for residential property at the time was as follows:
- 0% up to £125,000
- 2% for amounts £125,001 - £250,000
- 5% for amounts over £250,000 but not more than £925,000
- A 3% premium on additional residential properties.
How much stamp duty land tax will the man owe on the purchase?
ResponsesPress Enter or Space to submit the answer
£22,000(A) £22,000. An additional 3% is charged in each band due to this being an additional purchase of residential property. Residential properties are exempt from VAT, so we need not worry about calculating VAT. Thus, the landlord must pay 3% on the first £125,000 (£3,750), 5% on the next £125,000 (£6,250), and 8% on the amount over £250,000 (£400,000 - £250,000 = £150,000; £150,000 x 8% = £12,000). So, £3,750 + £6,250 + £12,000 = £22,000.
A florist is planning to sell her house, which was a new build when she purchased it 15 years ago. The florist received an Energy Performance Certificate (‘EPC’) at the time of her purchase. She instructs an estate agent, who tells her she does not need to commission an EPC for this transaction.
Is the estate agent correct?
No, an EPC is a legal requirement; even if one was produced when the property was first sold, it would have expired.(C) An EPC is valid for only 10 years. Here, the EPC was produced 15 years ago, so it has expired. (A) is incorrect. A new build warranty is separate to the requirement for an EPC. (B) is incorrect because it is too broad, as it fails to exempt sales for which there is an EPC that is less than 10 years old. (D) is incorrect because an EPC is required for the sale of a residential property as well as for the sale of a commercial property. (E) is incorrect as the only EPC in the facts has expired and is no longer valid. QUESTION ID: PRP264
