property practice session 1 Flashcards
What conduct issues are there when taking instruction?
1) identification checks
2) authority to act
3) conflicts of interest
What issues should be raised at the outset?
1) timescale
2) costs
3) Co-ownership
What surverys are there?
1) basic valuation
2) homebuyer report- more detailed
3) Full structural survey- suitable for listed building or extensive renovations
What sources of finance are there?
1) cash
2) money from another transaction
3) mortgage
For commercial:
1) commercial mortgage
2) equity finance
What are the different types of tax
1) SDLT or Land transaction tax
2) capital gains tax
3) value added tax
What is caveat emptor?
This is the buyer beware- buyer has to raise and find out issues before purchase- exception to this is misrepresentation.
What happens at exchange?
This is where the buyer and seller agree to contract and become bound
At completion this is where money is transferred.
Post completion is when registration takes place
Who deduces title?
The sellers solicitor and the buyers solicitor investigates it.
They do this by obtaining title documents from land registry- official copies.
What makes up the official copies?
1) the property register- states whether freehold or leasehold, property address, refers to title plan, rights benefitting the property, exclusions (eg mines and minerals).
2) the proprietorship register- class of title, registered proprietor, restrictions and any indemnity covenants to perform any positive covenants.
3) charges register- charges/mortgages, restrictive covenants, positive covenants, registered leases, easements over the property
What are the four issues for checking rights that benefit the property?
1) adequacy- is it adequate? eg right of way may be fine for 1 car but what about building a house
2) burden registered- is the right/burden registered, if land is not registered, a caution against first registration should be lodged, so that when the land is registered the burden can be registered
3) adoption- advise on risk of local authority adopting land- during that adoption, the local authority will look to the people whose properties front onto the road to contribute to the costs of brining the road up to an adoptable standard
4) maintenance- owner of land can demand contributions to the maintenance of that right
What are exclusions?
These are exclusion of rights from the property- like mines and minerals.
What is class of title?
this is decided by the land registry- evidence of title eg title absolute
how do you approach a covenant?
1) hand in pocket test.
If restrictive- assume that it binds the property
If positive- indemnity covenant in proprietorship register? If no- can ignore. If yes, assume it binds the property.
When reviewing, check whether the covenant been breached already? If yes- the seller should provide indemnity policy at their expense.
If no- does it affect value or buyer’s proposed use? if no, report to buyer but okay to proceed. If yes, is there insurance available? If it is possible, report to client and proceed. If no- consider approaching the person with benefit. If they refuse to consent- consider lands tribunal, reduction in price or withdrawing from purchase. If they give consent- report to the client and okay to proceed.
How do you investigate unregistered title?
need to investigate title deeds- sift through and produce an epitome of title.
To determine root of title:
A- Adequately describes the property
B- Be dated more than 15 years ago
C- casts no doubt on the seller’s title
D- Deals with legal and beneficial title.
Check if they are entitled to sell and any issues.
Search of the index map is essential, land registry will tell you if part is registered. Will also raise any cautions against first registration.
Issues that can arise: co-ownership, land charges, mortgages. rights benefiting and burdening the land, any covenants and other interests.
What is the chain of title?
this is the chain of conveyances to establish the title to the current owner
What can be included:
Power to sign, death certificate of deceased co-owner, Mortgage deed (and vacating receipt)
Excluded- declaration of trusts, expired leases, old searches, miscellaneous documents
Have to check for any gaps and that each part has been validly executed: Clear that is a deed, signed as a deed (and witnessed) sealed, delivered.
