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APC > Purchase and Sale > Flashcards

Purchase and Sale Flashcards

1
Q

What happens if a sale doesnt complete on completion date?

A

A notice is served to give 10 days from notice for completion

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2
Q

What is the difference between a fixture and fitting?

A

Fixture - Larger objects such as garden structures, doors etc

Fitting - Such as light fittings

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3
Q

When is SDLT due?

A

On completion

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4
Q

What did covid-19 do to the property market?

A
  • The market picked up as people were bored and had additional savings
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5
Q

When might VAT be applicable?

A

When the property is opted to VAT

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6
Q

Why would you mark a property ‘Sold Subject to Contract?’

A
  • When an offer has been accepted but no legally binding agreement has been formed.
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7
Q

What is a freehold?

A
  • Outright ownership of the property
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8
Q

What is leasehold?

A

Owning the building but not the ground it sits on.

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9
Q

How would you value an overage?

A

Instruct an independent expert

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10
Q

What are the different methods of sale?

A
  • Private treaty
  • Informal Tender
  • Formal Tender
  • Auction
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11
Q

What is a particular buyer?

A

A buyer for whom a particular assets has special value because the advantages from its ownership would not be available to other purchasers.

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12
Q

What is special Value?

A

An amount that reflects particular attributes of an asset that are only of value to a special purchaser. e.g. a tenant purchasing their freehold interest

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13
Q

What is personal property?

A

Means assets or liabilities not permanently attached to land or buildings.

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14
Q

What makes a plan land registry compliant?

A
  • Drawn to a metric scale
  • Have a scale measurement bar (1,1250)
  • Have the scale noted on the place
  • Have a north arrow
  • Full address inc Postcode
  • Demise in red outlined on the inside edge of the property
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15
Q

What are the types of agency?

A
  • Sole Agency (one agent)
  • Joint Agency (two or more sharing a fee, on pre agreed basis)
  • Multiple Agency (Any number of agents but only successful one gets the fee).
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16
Q

What does an agency instruction agreement include?

A

Inline with RICS Rules of conduct and Estate Agency Act Instructions must clearly set out;

  • Agency Basis
  • Agency Rights
  • Proposed Fee
  • Marketing costs & Disbursements
  • Confirmation of no conflicts
  • Money laundering regulation
  • Timescale for payments
  • Details of CHP

Must be signed and returned before marketing.

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17
Q

What is Stamp Duty Land tax?

A

Payable when a property is purchased for over a certain price, it is due within 14 days of completion.

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18
Q

Stamp Duty Land Tax Thresholds

A

Higher rate for additional dwellings - 5%

Rate for companies buying dwellings over £500,000 - 17%

Currently £425,000 threshold for first time buyers on property worth £625,000 or less. This is due to expire in March.

£250,000 for Residential

£150,000 for land/non resi.

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19
Q

The Estate Agency Act 1979

A

Regulates Estate agency work in the UK and covers anyone working in Estate Agency including commercial and agricultural.

Act lays out the duties and responsibilities of Estate agents including standards for competence, the information that must be provide to clients and handling clients money.

20
Q

What is considered in regards to proceedability?

A
  • Proof of funding
  • Solicitors details
  • Information on any parties or chains.
21
Q

What is Private treaty?

A

When a property is marketed openly with offers being made giving the vendor the opportunity to consider and negotiate.

22
Q

Advantages of private treaty.

A
  • Increased flexibility
  • different variations for advertising to suit client
  • Relatively inexpensive
  • Seller not obliged to sell
  • confidential process.
23
Q

Disadvantages of private treaty?

A
  • Risk of late withdrawals and associated costs
  • Quoting price could be over or understated for work involved.
24
Q

What should you be aware of when conducting property viewings

A
  • Services to the property
  • Defects/covenants/restrictions
  • surrounding planning applications
  • Length of time on the market
  • Guide price
25
Q

Land registration act 2002

A

provides framework for electronic property conveyancing but allowing formal documents to be executed electronically.

States that all freehold and leases over 7 years must be registered at Land registry.

26
Q

Principles of the Estate Agent Act 1979

A
  • Clarity as to the terms of agency
  • Honesty and Accuracy
  • Agreement & Liability for costs
  • Openness regarding personal interests s.21
  • Absence of discrimination
  • legal obligation to tell the client and offers
  • Keep clients money separate
27
Q

Consumer protection from unfair trading regulations 2008

A

Relate business to consumer

  • Regulations offer broader, no specific consumer protection for Estate Agents
  • Principle based regulations with wider definitions
  • Prohibit unfair business to consumer
  • Define the average consumer as a reasonably well-informed person.
28
Q

What are the penalities under The Estate Agents Act 1979

A

The act is policed by The National Trading Standards Estate & Letting Agency Team

Penalties are;
- Negative Licensing
- A prohibition or warning order against an agent
- Warning order
- Costs

29
Q

What are the key estate agency legislations?

A
  • Misrepresentation Act 1967
  • Estate Agents Act 1979
  • Consumer Protection Regulations 2008
30
Q

What are the rules regarding marketing singage?

A
  • Signs must be removed 14 days after completion
  • Must have owners approval for erection
  • Signs are policed by the Local Planning authority who can issue fines and order costs.
31
Q

When is planning required for marketing signage?

A

Planning is required for;
- Illuminated boards
- Remote Boards
- Boards erected on listed buildings

32
Q

What is marketing signage regulated by?

A

Town and country planning (control of advertisement) (England) regulations 2007

33
Q

What is the Consumer Rights Act 2015?

A

Amends existing consumer protection law and gives consumers new rights and remedies.

Requires surveyors to be transparent regarding fees and VAT

34
Q

What is false or misleading information?

A
  • Hiding or failing to provide information
  • Omissions
  • Exerting undue pressure on consumers
  • failing to show professional diligence
35
Q

What are the Consumer contracts (information, cancellation and additional charges) Regulations 2013?

A

They provide consumers with a 14-day cooling off period if the Terms of Engagement were not signed in the office.

36
Q

What is Informal tender?

A

When good market demand or negotiations need to be bought to an end after marketing via private treaty. Best and final offers are invited by a certain date and time.

37
Q

Advantages of Informal Tender

A

The vendor is not required to accept the highest bid or any bid.
- the process is not legally binding
- Generally a quicker process than private treaty.

38
Q

Disadvantages of informal tender?

A
  • Costs are generally higher
  • Any party can withdraw at any time
  • Seller must be informed of late bids which can lead to further rounds of bidding.
39
Q

What is formal tender?

A

When applicants bid blindly with no opportunity to withdraw or amend once submitted. Also know as sealed bids.

Used where there is strong demand or public accountability is required

40
Q

Advantages of formal tender?

A
  • Speedy process
  • Often attracts higher bids
  • Exchange can happen immediately
  • Vendor gets to choose preferred bid
41
Q

Disadvantages of formal tender?

A
  • expensive due to admin requirements
42
Q

What is auction

A

Used when it is difficult to accurately assess open market price. ToE are agreed between seller and auctioneer in advance and relevant legal docs are published prior.

43
Q

What are the advantages of Auction?

A
  • Short and certain timescales
  • Sale agreed when gavel falls, contracts are exchanged and and 10% deposit generally paid.
  • property sold with certainty over selling terms
44
Q

What are the disadvantages of Auction?

A
  • Expensive advertising costs
  • Not confidential
  • Marketing period is short
  • Failure to sell may leave the property blighted
  • Little control over identity of purchaser
45
Q

Factors to consider when advising suitable method of sale.

A
  • Clients objectives
  • Public accountability
  • Market conditions
  • Timing of sale
  • Marketing budgets
46
Q

What is goodwill?

A

‘Business Goodwill’ purchase price over and above market value for the goodwill of an established business with customers etc.

47
Q

What is a green mortgage?

A

A mortgage that rewards someone for buying or owning an energy efficient home by offering more favourable terms than standard.

APC (17 decks)

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