Property Practice II Prelinminary Matters - Premarket & Precontract Flashcards
Explain the role of Energy Perfomance Certificate (EPC) in property transaction
An EPC is needed whenever a property is built, sold, or rented. A seller must order an EPC for potential buyers and tenants before the property is marketed for sale or to rent.
Presentation of EPC is exempted if the property is listed or if the previous certificate is valid.
Meaning of heads of terms
A commercial estate agent will negotiate the heads of terms (the agreed terms. the heads of terms are the commercial equivalent of the memorandum of sale in a residential conveyancing transaction
Important steps when taking instructions on a sale and purchase
send a client care letter to their client setting out the level or service and cost
identification to satisfy the solicitors that the client is legitimate
due diligence for AML
Review the payment deadline for CGT
a residential property return must be submitted to HMRC and any tax due must be paid within 30 days of the completion date
Criteria to be qualified for a private residence relief
4
The dwelling house has been their only or main residence during their period of ownership
They have not been absent during their period of ownership other than for an allowed period of absence or because they have lived in job0 related accommodation
The grounds or garden are not greater than 0.5 hectares, and
No part of their home has been used exclusively for business purposes during their period of ownership
Solicitors duties when they act for both the buyers and their lenders
Socilotors owe a fiduciary duty to the mortgagees so they must report any issues upon discovery that may affect the value of the property or the lender’s decisions to lend.
But at the same time they will require consent from their client to divulge the information in safeguard they duty to preserve confidentiality. if the client refuses to disclose information, they must cease to act.
Other situations of conflict of interests where solicitor may be reluctant to act
co-owners unsure about the division of interests following the sale
where there is a gift intended from one party to another and the solicitor is acting for both the donor and the donee.
Solicitor should decline to act for both parties.
The name for the statement of best practice for residential conveyancing introduced by the law society
The Law Society Conveyancing Protocol
Where EPC is not required
if for listed buildings
if the previous certificate is valid
Where to obtain the title deeds if the property is
registered
unregistered
for the SELLER’s solicitor
Reg: HMLR and the solicitor will also check the charges register of the seller’s title to establish whether the seller has nay mortgages over the property.
Unreg: from the owner or the lender if there is a mortgage. the solicitor must make an undertaking that he will not part with the deeds until such time as the mortgage is redeemed
if there is any defects, the seller solicitor must take care of it
Meaning of deducing the title
The seller’s solicitor will send a copy of the title to the buyer’s solicitor - this is known as deducing the title.
BUYER’s solicitor in the pre-contract stage
buyer solicitor must check the title to ensure that the seller is entitled to sell the property
Seller’s duty of disclosure
consequences of non-disclosure
they must disclose latent defects and latent burdens (encumbrances)
buyer can terminate the contract after exchange and claim damages
Meaning of wilful deceit
where the seller tries to cover up a patent defect. there may be a tort action in consequence.
Content of a contract package
Draft contract with the draft lease annexed ti ut
The seller’s freehold title
Replies to standard pre-contract enquiries
copy of planning permission and building regulations consent
If the building is less than 10 years old, a new build warranty
service charge budge for a new build
details of management company if applicable.
Deadline to rescind a contract if the written consent of assignment is not returned
3 days before completion
What should the buyer solicitor do if a title absolute is not produced by the seller’s solicitor
The buyer’s solicitor should insist on requiring the landlord to produce a copy of the freehold title so that prior to exchange the outgoing seller’s can apply to HMLR to upgrade the title.
3 parts of standard conditions of sale
the particulars of sale
the standard conditions of sale; and
the special conditions of sale.
Rules on the use of deposits for related Purchase
if the seller has a related purchase of a property for their residence in E&W, they can use the deposit received on their sale towards the depsit required on that related purchase transaction. (not available for a btl property purchase)
Difference between holding the deposit as a stakeholder and as agent
stakeholder: the funds will be held in the joint name so the seller’s can transfer the funds with buyer’s consent or on completion
agent: the seller is allowed to pay over the buyer’s deposit to the seller immediately after exchange has taken place.
Difference between full title guarantee, limited title guarantee and no tile guarantee
full title guarantee is the best form where the seller ensures he is entitled to sell, do all their best to transfer the tile and the property will be sold free from all charges or encumbrances other than those disclosed
Limited title guarantee can only promise that seller has not created any charges or rights during their ownership other than those disclosed
No title guarantee: the seller has no knowledge of the property at all (repossession or someone who has just been gifted a property)
Standard date of completion stipulated in the standard conditions of sale
20 working days after exchange
