Purchase and Sale Flashcards
When do Lettings agents have to register with HMRC for AML checks on lettings?
When the rent is more or equivalent to £10,000/month
Who do Consumer Due diligence checks applies to? (4)
- Vendor
- Purchaser
- Landlord
- Tenant
When to do Enhanced Due diligence checks?
when Red flags occur
What info do you need for CDD Checks?
- ID
- Company info (number, address, names)
- Names of directors
- Information about intended use
Who needs EDD Checks?
- Additional procedure for ‘High-risk countries’ or ‘Politically exposed Person’ (PEP) and family members. Need more evidence and monitoring. PEP are at a high risk of bribery
Red Flags?
- Unwillingness to provide ID
- Changes in Parties involved in transaction
- Unusual transaction feature
- Unusual currency
Crime Act 2002 offences? (3) (estate agency)
- Concealing Criminal Property
- Knowledge or suspicion
- Possession of criminal property.
What are some EDDs?
- Check with their accountant
- More prove of Funds
- Purpose of the Transaction
- Increased Monitoring (Solicitor base, bank base)
What are the 4 methods of sale?
- Private Treaty
- Auction
- Informal tender
- Formal Tender
What things do you considered when looking at the method of sale?
- Client objectives
- Public accountability
- Current and future market condations
- demand
- Time
Private treaty P&C?
PROs
- Flexible
- Parties control
- no obligation to sell
- Confidential
CONS
- Gazumping or gazundering
- late decision to pull out
- abortive costs
Informal Tender?
- Invite ‘Best Bids’
- Good level of interest
- not legally binding
- bids opened in front of client
Whats included in informal tender offer?
- Time and Date
- Name and address
- Conditions
- solicitors details
- finance arrangements
- vender reserves the right
Formal Tender?
- Sealed Bids
-Strong levels of interest or public accountability - no obligations to accept the highest bid
- Full marketing and legal pack available prior to date
- Offer is binding
Informal vs Formal Tender?
Formal tender:
- Single chance to bid
- high accountability
- no opportunity for future bids
- highest figure is usually accepted (don’t have to)
- leads to contract sale
Formal tender > Sale
Private Treaty > Informal tender > maybe more negotiations > sale
Auction P&C?
PROs
- Fast
- sale on fall of the gavel
- Used for unusual property
- Strong levels of interest
CONs
- Cost of promotion
- Lack of Confidentiality
- No choice in purchaser
- Intense
What is the process for Auctioneering?
- TOE
- COI
- MLC with vendors and purchasers
- Due diligence
- Document must be available
- Condition of sale, memorandum of sale and all notices are to be published
- Reservation price (10%)
- Contract exchange at the fall of the gavel
- Particulars must be in accordance with legislation
- Guidance on online auctions
What actions are required by a purchaser ahead of Auction day?
- view the property and consider a structural survey
- Take the proper legal advice and complete a due diligence exercise
- Read the Notice to Prospective Buyers
- Arrange a deposit of 10% and insurance for exchange
- Provide ID for money laundering procedures
What is a Special Purchaser?
A particular buyer whom a asset has a special value because of the advantage that arises from its ownership. That other buyers wouldn’t have.
What is Special Value?
The additional value that a special purchaser would attribute above a third party
Additional RICS guidance for Auctioneering?
RICS Professional Statement: Auctioneers Selling Real Estate at Auction England and Wales including Common Auction Conditions, 2018
Advice on setting an reservation price?
- 10% of Guide
- Written agreement
- Confidential
Manley Road, whats the act that marketing particulars should be in accordance with?
Consumer Protection regulations 2008
TOB for agency?
- Agency basis (sole/dual)
- Agency rights (Sole selling or rights)
- Fee
- Marketing costs
- COI
- Money laundering checks
- Timescale for payments of fees & disturbance
- CHI
