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.
What are the searches and enquries?
These assist with caveat emptor.
1) local search- importance and fundamental. Comprises of search of local land charges register LLC1 and local authorities replies to inquiry CON29.
LLC1- matters entered on the local land charges register affecting the property, eg debts to local council, planning permissions granted (not refused) and planning enforcement notices and article 4 directions. Conservation areas, and listed building status
CON29- planning consents granted and applications pending or refused, details of adopted rights and pavements and public rights of way, land required for public purposes and contaminated land as the council is aware
2) drainage and water- CON29DW (residential) and Commercial DW. This shows water connected and drainage.
3) desktop environmental- contaminated land and risk of flooding
4) chancel repair- historic right for contribution to repair a church- chancery passage.
5) index map and land charges- essential where land is unregistered. Central land charges- protect against restrictive covenants on unregistered land. Carried out against the name of landowner
Optional:
CON29O- optional enquiries, about commons, village greens.
Highways search CON29R- more detail and will check road abuts the property.
Coal Mining search
Chesiree salt search
Waterways- to check for river water running through or near property- to maintain banks
Flood search- this is further info than the desktop environmental.
Phase 1 Survey- potential contamination- involves site inspection
Phase 2- soils and water samples
utilities searches are needed for new developments.
What planning issues are there?
1) Seller’s building works and/or change of use- Planning consents required? Were they obtained? If not, has the time period for enforcement expired?
Planning consents for building works:
1) planning permission- needed for ‘development’ but excludes the interior, some development permitted within the general permitted development order.
2) building regulations approvals- external or internal works. Building regulation approval and certificate of compliance.
3) planning permission required for change of use-Planning permission required for ‘development’. Development includes a material change of use. A material change of use is a change from one use class to a different use class. No application for planning permission needed if permitted development with the GDPO.
Planning permission not required if a change of use within the same class not needed.
What is an article 4 direction: Types of building works and/or material changes of use which would normally be ‘permitted development’ under the GDPO will not require an application for planning consent.
A conservation area will have an Article 4 direction, and impose onerous planning conditions to any planning permission granted
To check whether planning or building regs:
Planning permission- LLC1 (or COn29)
Building regulation approval and completion certificate obtained: CON29
What are the time limits for planning permissions and building regulations?
Planning permission: 4 years for
1) building works
2) change of use to a single dwelling house
10 years for:
1) any other changes of use
2) breach of planning permission condition
Building regulations:
6 Months for prosecution of person responsible
12 months for statutory enforcement
No time limit on enforcement action through court injunction
What are the solutions for breaches of planning and building regs?
Planning:
1) indemnity insurance
2) retrospective planning permission
3) comply with the condition
Building regulations:
1) indemnity insurance
2) regularisation certificate
3) remedial work if necessary
What are the planning permission enforcement methods?
1) planning enforcement notice
2) stop notice
3) breach of condition notice
4) injunction
