property practice (week 1-5) Flashcards
what does caveat emptor mean?
buyer beware
means that a buyer needs to take the property as they find it. they cannot return the property if it turns out to be unsuitable in some way
when should a buyer instruct a surveyor to do a physical survey on the property?
buyer should ALWAYS be advised to instruct a surveyor to undertake a physical survey of the property to identify if there are any physical defects with the property
when is a homebuyer report survey necessary?
it is more detailed and will be suitable for most properties in reasonable condition aged less than 150 years
when is a full structural survey suitable?
suitable for any property but should be considered where property is listed, has had extensive renovations or where extensive alterations are planned
why do most residential properties not have to pay capital gains tax?
because there is an exemption called private residence relief
what is a syndicate?
in commercial property it is a type of funding option - where money is raised from a group of lenders to raise the money and limit their risk exposure
what is a capital repayment mortgage?
borrower repays capital sum by monthly payments, together with an interest amount added each month. at end of the term (eg, 25 years) loan has been paid off in full
what is an interest only mortgage?
it is where borrower only pays interest on loan - therefore, pay less but have not paid for any capital on the property
what is an endowment mortgage?
generally not available in the UK anymore - interest only mortgages topped up with payment that is invested in an endowment policy. idea is that the policy repays capital at end of the term
what are the exceptions to the rule that you cannot act if there is a conflict of interest?
1) substantially common interest
2) competing for the same objective
all clients need to give informed consent in writing
where appropriate put in place effective safeguards to protect confidential info
you need to be satisfied it is reasonable for you to act for the clients
should a seller disclose a right of way that is not apparent from title or an inspection of the property?
yes, seller must disclose the right of way because it is a latent defect (which are not discoverable through reasonable inspection by the buyer) therefore, must be disclosed by the seller.
how can a solicitor mitigate the risk of own conflict of interest when: need to recommend construction company and their brother has construction company and believes would be suitable for the job?
solicitor should disclose the relationship to the client and recommend other construction companies as well, allowing the client to make an informed decision
what does deducing title mean?
process of proving ownership to a would-be buyer (proof of ownership)
what are the 3 sections of the official copies?
1) property register
2) proprietorship register
3) charges register
what does the property register show?
describes the property and any rights benefiting the property
- freehold or leasehold
- title plan
- rights that benefit property
what does the proprietorship register show?
gives the registered proprietor’s name and address, the class of title and entries affecting ownership
what does the charges register show?
lists the rights burdening the property (eg, mortgage, covenants, easements and leases)
does the seller’s solicitor deduce or investigate title?
they deduce title - proving ownership
does the buyer’s solicitor deduce or investigate title?
they investigate title
if the property has the benefit of a right of way - what 4 issues must be considered?
1) registration of the burden
2) adequacy
3) maintenance
4) adoption
what is class of title?
it states how satisfied the land registry are with the registered proprietor’s proof of ownership to the property
what is title absolute?
indicates there are no issues - land registry are satisfied that proprietor is the true and proper owner
what is qualified title?
where there is a specific defect in the title
what is possessory title?
when registered proprietor has shown they have psyical possession of the property, but no title deeds or is claiming through adverse possession (eg, squatters rights)