Residential Property and New Builds

Question 1

Differences in Residential Property

Answer 1

• Need to follow Law Society’s Conveyancing Protocol
• Conveyancers can be CQS accredited - Conveyancing Quality Scheme (means they are better!)

DIFFERNCES IN TAKING INSUTRCTIONS

• likely to also act for lender (likely to comply with Code of Conduct IB (3.7)
• need to be concsious when acting for joint buyers or sellers - cohabitants - will need to advise on JT/TC - ensure you have proper instructions from both buyers

DIFFERENCES IN SEARCHES AND ENQUIRIES

• forms differ somewhat (e.g. don’t use CPSEs)
• seller’s solicitor must arrange for Energy Performance Certificate

DIFFERENCES IN THE CONTRACT AND EXCHANGE

• will be SCS
• exchange often more complicated as often a chain of transactions - Formula C used - exchange of all contracts takes place simultaneously

Question 2

Sales of Part: Key Differences

Answer 2

• Description of property MUST refer to a plan - show part being soled in edged in red, and part retained iedged blue - Land Registry can then allocate a new title number to the party being sold
• Purchase deed drafted at earlier stage - will be appended to contract - because, will involve the imposition of covenants and the grant/reservation of easements (as many new things being created, easier just to draft purchase deed earlier and append to contract, rather than putting special conditions in the contract of the terminology later to be put in purchase deed).
• Use TP1 insead of TR1 and pre-completion search is OS2 instead of OS1; discharge of seller’s mortgage over that part of property being sold evidenced using DS3 instead of DS1
• Will prob need lender’s consent to any new encumbrances over the land being retained (which is till subject to seller’s mortgage) - Lender will want sale proceeds to discharge at least part of mortgage.

EASEMENTS:

• will need to think what rights of way, drainage etc. you need and any other rights.
• should exclude any implied easements and make specific provisions for those actually required, based on parties’ respective instructions.

COVENANTS - commonly include:

• restrictions on types of building erected
• restrictions on use of the land
• restrictions on causing nuisance generally
• positive covenants (e.g. maintain boundary fence)
• indemnity covenant

Question 3

Additional considerations for new builds

Answer 3

DEPOSIT
- developer will want access to the buyer’s deposit (rather than it being held as stakeholder) to help with their cashflow

CONTRACT

• may be specific terms on how developer will build property, to buyer’s specifications
• completion date - if property unfinshed, contract will not have fixed completion date - otherwise developer could be screwed - will normally be completion 10 days from when developer serves notice…
• developer has to build estate roads and frains up to standard required by authorities - should not at no cost to buyer!
• developer must promise to provide buyer with structural guarantee on completion.

TRANSFER
- developer’s solicitor will draft TP1 rather than buyer’s solicitor (who usually does it), because will want uniformity between all the sales (will want every property on the development to have identical benefits and burdens - common parts, gardens etc.)

STRUCTURAL GUARANTEE
- NHBC Buildmark (or other provider) - gives buyer insurance policy to claim againt builder for 2 years after completion, or thereafter, the NHBC organisation itself.