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Apc > Purchase & Sale > Flashcards

Purchase & Sale Flashcards

1
Q

When was the Estate Agency Act?

A

1979

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2
Q

What are the key principles of the Estate Agency Act 1979?

A
  1. Clarity as to terms of agency (S18)
  2. Honesty & accuracy
  3. Agreement and liability for costs
  4. Openness regarding personal interests (S21)
  5. Absence of discrimination
  6. Legal obligation to tell clients about offers received
  7. Keep client money separate
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3
Q

Who policies the Estate Agency Act 1979?

A

National Trading Standards Estate & Lettings Agency Team

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4
Q

What are the penalties for not conforming with the Estate Agency Act 1979?

A
  1. Right to be an agent taken away
  2. Warning order (individual or practise)
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5
Q

What is the Estate Agents (Undesirable Practises) Order 1991

A

Must inform clients as to any services offered to prospective purchasers unless free of charge.

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6
Q

What is the Estate Agents (Provision of Regulations) Order 1991

A

Must provide information in writing relating to:

  1. Services provided
  2. Remuneration
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7
Q

What is the cooling off period?

A

14 day period allowed for clients to change their mind they wish to instruct you or not.

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8
Q

What is the Consumer Protection from Unfair Trading Regulations (CPR) 2008?

A

Prohibits unfair business practise and incorrect information that can affect the consumer throughout the sales period

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9
Q

What are the key elements of Consumer Protection from Unfair Trading Regulations (2008)?

A
  1. Agents have a duty of care to clients + all interested parties
  2. Agents must declare all info on property
  3. If any info is discovered during the agency process it must be disclosed
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10
Q

Who policies the Customer Protection from Unfair Trading Regulations?

A

Trading Standards Office

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11
Q

What does caveat emptor mean?

A

‘Let the Buyer Beware’

It is the buyers responsibility to check the quality and suitability of the goods before purchase.

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12
Q

When was the Consumer Rights Act?

A

2015

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13
Q

What is the Consumer Rights Act 2015

A

Sets out a purchases right when a product / property is purchased. They must be:

  1. Fit for purpose
  2. As described
  3. Satisfactory quality
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14
Q

When was the Misrepresentation Act?

A

1967

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15
Q

What are the key points of the Misrepresentation Act 1967

A
  1. Relates to false claims in pre-contractural enquiries that lead to a party purchasing
  2. Can be fraudulent, negligent or innocent
  3. Agent has a duty of care to check info + ensure advice is reliable
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16
Q

What are the 3 tests for liability under the Misrepresentation Act 1967?

A
  1. Foreseeability - damage was reasonably foreseeable
  2. Proximity - relationship can be characterised by law as being sufficiently proximate
  3. Fairness - regarded as fair, just, and reasonable for a duty of care to arise
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17
Q

How big can non residential signage be without planning permission?

A

2M squared - flat
2.3M squared - V

18
Q

How big can a residential board be without planning permission?

A

0.5M squared - flat
0.6M squared - V

19
Q

What is the max projection and height of signage?

A

No more than 1M from face of building

No more than 4.6M from ground

20
Q

In what situations does marketing signage always need planning permission?

A
  1. Listed buildings
  2. Conservation areas
21
Q

How many days after completion does marketing signage need to be removed?

A

14

22
Q

What is the penalty for failure to comply with the Misrepresentation Act 1967?

A

Sued

23
Q

What are the possible penalties for failure to comply with the Estate Agency Act 1979?

A

Warning order
Prohibition order
Fine

24
Q

What are the possible penalties of failing to comply with the Consumer Protection Regulations (2008)?

A

Unlimited fine
Prohibition order
Prison

25
Q

All freehold transactions must have a compliant plan with what?

A
  1. Drawn to a metric scale
  2. Scale bar and scale
  3. Full address inc. post code
  4. North arrow
  5. Demise of property in red outline
26
Q

What factors is the method of sale based upon?

A

Client objectives
Market conditions
Timing requirements

27
Q

What are the advantages of private treaty?

A

Flexibility
Parties control the process
Vendor under no obligation to sell
Confidential

28
Q

What are the disadvantages of private treaty?

A

Potential for gazumping and gazundering
Late decisions not to buy
Associated abortive costs

29
Q

What are the key aspects of the informal tender process?

A
  1. Used when there is a good level of interest either at commencement of marketing or to bring negotiations to close
  2. Not legally binding so either party can withdraw at any point up to contract
  3. All bids should be opened in front of client or independent witness
  4. Bids submitted within prescribed timeframe
  5. Further negotiations can follow from this process
  6. Does not lead directly to sale
30
Q

What must an informal tender include?

A
  1. Date and time of receipt of written offer
  2. Name and address of applicants solicitor
  3. Confirmation of finance agreements
  4. Details of any conditions attached to offer
  5. Statement that the vendor reserves the right to not accept the highest, or any offer made (not legally binding)
31
Q

When might a formal tender be used?

A

For statutory bodies

32
Q

What are the attributes for a formal tender?

A
  1. Highest figure is accepted (unless stated otherwise by vendor)
  2. No opportunity for prospective purchasers to change / increase bid after submission.
  3. Possible to lead directly to a contract for sale.
33
Q

What are the atributes of an auction?

A
  1. AML and CoI checks need to be done beforehand.
  2. Reserve price needs to be agreed with vendor prior.
  3. Contracts exchanged at fall of gavel.
34
Q

What are some advantages of auction?

A
  1. Short timeframe
  2. Certainty of sale assuming reserve price is net.
35
Q

What are some disadvantages of auction?

A
  1. Lack of confidentiality over price achieved.
  2. Vendor cannot choose purchaser.
36
Q

What are the 3 types of estate agency?

A
  1. Sole agency - 1 agent
  2. Joint agency - 2 or more agents sharing fees on pre agreed basis
  3. Multiple agency - any number of agents but only successful gets a fee
37
Q

What is a sales instruction timeline?

A
  1. Check competence
  2. CDD and CoI
  3. ToE
  4. Gather info
  5. Inspect + measure
  6. Prepare marketing material
  7. Marketing process
  8. Negotiate sale + drafts HoT
  9. Issue invoice
38
Q

What is sole agency and how does this differ from sole selling?

A

Sole agency - fee only if agent introduces buyer

Sole selling - fee regardless of whether agent introduces buyer

39
Q

What is the Ready, Able and Willing purchasers clause?

A

If client decides to withdraw when applicant is ready and able to process, an abortive fee may be charged

40
Q

What are special purchase vehicles?

A

A company formed to buy a property to reduce SDLT payable.

41
Q

What are purchasers costs and what are the components?

A
  1. SDLT - 5%
  2. Agent fee - 1% (1.2% inclusive of VAT)
  3. Legal fee - 0.5% (0.6% inclusive of VAT)

Total - 6.8%

Apc (8 decks)

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