Residential transactions: Acting for the buyer Flashcards
Pre-exchange
Taking instructions (S.P.T.T)
What are the areas to be covered by the buyer’s solicitor when taking initial instructions?
1) Buyer’s situation:
- Buyer’s current address and contact details
- Buyer’s family: single / married, children
- Are they going to sell another property (related sale)
2) Property details:
- Details of property - freehold / leasehold, commercial / residential
- Price of property
- Fittings and contents - price
3) Third parties:
- Co-ownership - are they buying with another person?
- Seller’s details and solicitors
- Estate agent
4) Transaction details:
- Whether a chain
- Use of property - any business use proposed (Note CGT implications)
- Finances - source of funds / deposit / mortgage offer
Inspection of property / survey
- Costs - estimate
Pre-exchange
Who should the buyer’s solicitor correspond with after taking initial instructions?
The buyer’s solicitor should write to:
Client
- Acknowledge instructions
- Confirm advice; for example, co-ownership
- Client care letter, and
- Costs plus VAT and disbursements
Seller’s solicitor:
- Confirm acting, and
- Request draft contract, and
Agents:
- Notify involvement;
- Request copy of sale particulars, and
- Thank, if client referred by them
Pre-exchange
What searches should the buyer’s solicitor carry out after taking initial instructions?
The buyer’s solicitor should also carry out the following searches:
- Local searches - LLC1 and CON 29
- Water and drainage search
- Any other necessary searches - coal mining / commons registration
- Environmental search (if relevant)
- If unregistered, Index Map Search - Form SIM, and
- If unregistered, Land Charges Department Search - K15 (if seller not providing under the protocol)
Pre-exchange
What should the buyer’s solicitor do immediately after receiving the property documents?
Buyer - on receipt
The buyer’s solicitor should:
- Approve / amend contract
- Investigate title
- Raise pre-contract enquiries of seller, and
- Reply to seller
Pre-exchange
What should the buyer’s solicitor do once satisfied with the Property Information Form or pre-contract enquiries / searches / contract / title?
If satisfied with Property Information Form or pre-contract enquiries / searches / contract / title, the buyer’s solicitor should:
- Report on title to the client
- Obtain the client’s signature on the contract
- Obtain authority to exchange
- Deposit the cheque from the client (note that this must be cleared before exchange), and
- Ensure there is buildings insurance in place from exchange
Exchange of contracts
What are the main points to note with exchange of contracts?
- Is it Formula A, B or C?
- Memorandum of exchange, and
- If Formula B, send the seller’s solicitor your client’s signed contract and deposit cheque
Post-exchange
What actions must the buyer’s solicitor do immediately after exchange?
Buyer’s solicitor needs to:
1) Inform client and diarise the completion date
2) Consider protection of the contract:
Notice or Class C (iv) estate contract
3) Draft:
Transfer
Mortgage deed (if instructed by mortgagee) and
Trust deed (if tenants in common)
4) Send to seller:
Draft transfer x 2; and
Completion Information and Undertakings Form (TA13)
5) Pre-completion searches:
Unregistered:
- Land Charges Department Search
- K15 against seller, and
- Priority period 15 working days to complete
Registered:
- HMLR Official Search with property;
- Form OS1 / OS2
- Priority period 30 working days to complete and register, and
- K16 bankruptcy search against client, if acting for the lender, and
- Request funds for completion from the lender and any balance from the client
Pre-completion
What actions must the buyer’s solicitor do before completion?
The buyer’s solicitor should:
Engross the transfer
Obtain the client’s signature, if necessary
Obtain the client’s signature to the mortgage deed, and
Send the engrossed (signed) transfer to the seller
Completion
What happens at the stage of completion?
The seller and the buyer will use the agreed method of completion:
- Law Society Code for Completion by Post (2019)
- Physical completion at the seller’s solicitor’s offices, or
- Agent used by buyer
Post-Completion
What actions must the buyer’s solicitor do immediately after completion?
The buyer’s solicitor should:
1) Inform client - and collect the keys
2) Bill the client, if not already done
3) Send SDLT1 Land Transaction Return to HMRC within 14 days, where SDLT is payable, plus the cheque or pay via bank transfer, and
4) Apply to register the dealing / first registration at HMLR
- Registered title - send within priority period:
- Form AP1 - application to change Register, plus fee
- Original transfer plus certified copy
- SDLT certificate
- If relevant, Form DS1 re seller’s mortgage, and
- If relevant, client’s mortgage deed plus certified copy - Unregistered title - send within 2 months of completion:
- Form FR1 - application for first registration plus Scale 1
fee
- Original transfer/conveyance plus certified copy
- SDLT5 certificate
-If relevant, seller’s receipted mortgage deed (to follow)
- If relevant, client’s mortgage deed plus certified copy
- All deeds and documents to enable Registrar to
investigate title and create register, and
- Form DL - schedule of documents enclosed
The Title Information Document will be issued to the buyer’s solicitor following registration together with official copies
