set 5-11-1-6 Flashcards
A solicitor is acting on the purchase of a new build property for a client. The solicitor sees that the client has left a message because they are concerned about the upkeep of the road fronting the property.
How will the solicitor find out the information which the client is seeking?
(A) A local search gathers information from the local authority. The first part of a local search reveals whether there are registrations by the local authority in the land charges register. The second part is a standard set of enquiries of the local authority which include enquiries about roads fronting the property, public rights of way, and planning entries and building regulations relevant to the property. A local search may also include optional enquiries. (B) is incorrect because the index map search shows whether property is registered. (C) is incorrect because an environmental search is an electronic database search that a solicitor may perform from their office to determine whether the property is likely to have been contaminated by hazardous wastes in the past (because if it was, the buyer could be liable for clean-up costs in the future). (D) is incorrect because a commons registration search is an optional search which is performed when the property appears to abut common land or a town or village green to determine whether use of the property is restricted or burdened by its proximity to public land. (E) is incorrect because the land charges search shows third party rights in unregistered land
A paralegal has just joined a conveyancing department. Their principal has given them a large bundle of unregistered title deeds and has asked them to prepare an epitome of title. The paralegal is not sure what an epitome of title is.
Which of the following statements best describes an epitome of title?
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(E) The epitome comprises a chronological list of the documents of title together with a photocopy of those documents attached. (A) is incorrect because the epitome will not include original documents, but rather only photocopies of the originals. The original title deeds will not be sent to the buyer’s solicitor until completion. (B) is incorrect as it describes two elements of a good root of title – the epitome should show this, but these elements do not explain what an epitome is. (C) is incorrect because the epitome will not contain all of the pre-root documents; it will only list and include copies of documents going back to the root. (D) is incorrect as the Property Register is used with respect to registered land; an epitome is used to deduce title with respect to unregistered land. There is no Property Register for unregistered land.
A man is purchasing a commercial property. His solicitor is negotiating the lease terms with the landlord’s solicitor. The man is concerned to find out whether the commercial unit which he is acquiring is connected to the public water supply.
How will the man’s solicitor find out the information which is of interest to their client?
(C) The drainage and water search is an enquiry sent to the local water company to determine whether the property is connected to a public foul drainage system and the public water supply. Such a search is carried out on every purchase, whether the property is commercial or residential. (A) is incorrect because there is no such thing as a ‘water search’; the relevant search is known as a ‘drainage and water search’. (B) is incorrect because the drainage and water search is not part of the local search. There are two parts to local search: a search of local registrations that might burden the land and enquiries to the local authority regarding information with respect to issues including roads, public rights of way, and planning. The local search may also include additional, optional enquiries. (D) is incorrect because a commons registration search is an optional search which is performed when the property appears to abut common land or a town or village green to determine whether use of the property is restricted or burdened by its proximity to public land. (E) is incorrect because an environmental search is an electronic database search that a solicitor may perform from their office to determine whether the property is likely to have been contaminated by hazardous wastes in the past (because if it was, the buyer could be liable for clean-up costs in the future)
A solicitor is acting for the buyer of a factory unit. The replies to enquiries provided by the seller confirm that the seller built a small additional room on the rear of the factory unit three years ago. The seller could not produce evidence that planning permission was obtained, and neither could they provide a building regulations completion certificate.
There is some evidence that some of the work was not in compliance with building regulations. However, the solicitor is satisfied that the addition to the building fell within the permitted development rules and so the local authority would have no ground to bring an enforcement action with respect to the additional room.
Is the solicitor correct?
(C) The solicitor is incorrect because even if planning permission is not required for building work, a building regulations completion certificate must be obtained from the local authority to confirm that the work has been carried out satisfactorily. Although the local authority has only 12 months in which to bring an enforcement action based on the failure to obtain a certificate, it may seek an injunction to force an owner to bring the property up to standards (if the work was not up to standards) at any time if the work is deemed to be dangerous. (A), (D), and (E) are incorrect because they each state the wrong time period for an enforcement action (it is 12 months and not two years). (A) is also incorrect in that it fails to take into account that an injunction could be issued to enforce compliance. (B) also is incorrect for that reason as well. And (E) has the additional problem that an injunction may be sought at any time
A solicitor is acting for a first-time buyer regarding the purchase of a flat. The solicitor has received the mortgage offer which contains the following condition:
‘Solicitor must ensure that the borrower is advised to pay off existing credit card borrowing of £2,300 prior to drawdown of the loan.’
The solicitor has reported fully to the client on the terms of the offer. The client agreed to the terms, and the solicitor has exchanged contracts with the seller’s solicitor. As the completion date is near, the solicitor reviews the file and discovers that there is no record confirming that the client has repaid their credit card debt. Nonetheless, the solicitor prepares a certificate of title and submits it to the lender.
Has the solicitor breached any duties with respect to the buyer’s credit card borrowing?
B) The solicitor has not breached any duties because, under the circumstances, the solicitor did not have a duty to ensure that the credit card is paid off before completion. A solicitor has a duty to fulfil any undertaking the solicitor makes and to follow the lender’s instructions. Here, the lender instructed that the solicitor must ensure that the borrower is advised to pay off their existing credit card debt prior to drawdown of the loan. The condition only requires the solicitor to ensure that the borrower has been advised about the issue, and the facts make it clear that the solicitor has fully reported the conditions to the client. Therefore, (C) is incorrect. (A) is incorrect because there is no such ‘best practice’ requirement. (D) and (E) are incorrect because the Handbook does not address the borrower’s credit card debt.
A new solicitor in a conveyancing department has received a large bundle of title deeds from their client. The solicitor has been asked to prepare an epitome of title but is struggling to know where to start.
Which document would be the most appropriate to choose as the root of title?
(B) The most appropriate document to choose as a root of title among the choices is the conveyance on sale dated 16 years ago. To be a good root, the document must deal with the whole legal and equitable interest in the property, contain an adequate description of the property, be at least 15 years old at the date of the contract, and do nothing to cast doubt on the title. A conveyance on sale is the most common root of title and also the most appropriate. This is because the title will have been investigated at the time of that transaction whereas the title may not have been investigated thoroughly, if at all, where there is a deed of gift (A) or an assent (C). (C) is also incorrect as it is only 12 years old rather than the necessary 15 years. (D) and (E) are incorrect as there is no transfer of ownership in relation to a deed of easement or tenancy agreement; these merely create interests in land
A new solicitor has started to work on a conveyancing file for a buyer client who is purchasing a building from an individual proprietor. The buyer intends to use the building as a shop for their business, which is incorporated. The buyer has sufficient funds from their business to pay cash for the building.
Contracts have not yet been exchanged by the parties. The solicitor has checked the epitome of title and has obtained a local search, a drainage and water search, and an environmental search with respect to the property.
Should the solicitor have carried out any other search based on the facts given?
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(D) Under the facts given the solicitor should have carried out an index map search. Look out for the clue in the question. You are told that the solicitor has checked the epitome of title, so the title in question is unregistered. When title is unregistered, in addition to carrying out the local search, drainage and water search, and environmental search that should be done pre-contract in every purchase, the solicitor should also carry out an index map search to reveal whether the title to the property is already fully or partially registered. This will be done whether the use of the property is residential or commercial. Thus, (C) is incorrect. (A) is incorrect because the facts indicate the buyer is a cash buyer and is a limited company. Typically, a bankruptcy search is done only if the buyer is an individual and needs to obtain a mortgage (to ensure a lender will be willing to lend to the buyer). (B) is incorrect because a coal mining search is conducted only with respect to property in an area that is (or was) being mined. Nothing in the facts indicates that the property in question is in such an area. (E) is incorrect because a company search is conducted only if the seller is a company. Here we are told that the buyer’s business is incorporated, but the seller is an individual proprietor. Therefore, a company search was not needed
A woman is interested in buying a property that is ready to move into. She does not want to carry out any work to the property. She views a property with her father. She particularly likes the property because the seller has recently built a small porch at the rear which will be useful for putting shoes and coats in. The seller has produced a letter from the planning department confirming that planning permission was not required. She wants to put in an offer on the property, but her father has raised some doubts because he said that the porch would need planning permission.
What advice is the woman’s solicitor likely to give her in this regard?
(E) The solicitor will explain that the porch was built under the permitted development rules, which is why planning permission was not required. Under the Town and Country Planning (General Permitted Development) Order 1995, certain types of development may be undertaken without express consent. These include small home extensions, porches, fences, and conservatories. Thus, the remaining answers are incorrect.
A client is buying a property which is 30 years old and has commissioned a survey which includes the following:
‘Recent internal works have been carried out to the property. A large access between the lounge and dining room has been created to provide an open plan area. From my inspection, the internal works were minor in nature and did not involve the removal of a load bearing wall.’
The client is worried about the work because the seller did not obtain permission from the local authority to undertake the work. The client spoke to his surveyor who confirmed that they have no concerns as the works are only minor internal works. However, the client is still concerned and discusses the matter with his solicitor.
What advice is the solicitor likely to give regarding this issue?
(A) The solicitor should advise the client that the work is not considered to be development and thus planning permission was not required. Under the Town and Country Planning Act 1990, planning permission is required for any development of land. Development includes building and making a material change of use. However, minor internal work is not considered to be development and so planning permission is not required. The survey confirms that the work was minor in nature. Therefore, (B) is incorrect. (C) is incorrect. Any alterations to a listed building (that is, one listed as historical or otherwise significant) usually need planning permission, but there is no suggestion in the facts that the property here is a listed building. Additionally, the facts indicate the property is a house that is only 30 years old. It is highly unlikely to be on the list. (D) is incorrect because if work is not considered to be development in the first place, then deemed permission under the permitted development regime is irrelevant (because no permission is required). (E) is incorrect because merely creating two rooms from one internally would not constitute a material change of use. Change of use contemplates changes such as conversion of one house to two flats or a house to a shop and a flat.
A private limited company was incorporated on 1st January two years ago with the Companies (Model Articles) Regulations 2008 (‘the Model Articles’) as its articles of association. The company’s accounting reference date is changed to 30 September. The company is classed as a small company.
What is the latest date it can file its annual accounts?
(C) A private company should file its accounts no later than nine months after the relevant accounting reference period. (A) and (B) are incorrect as the date of filing is not linked to the date of incorporation, but to the accounting reference period. 30 June is nine months after 30 September. It follows that none of the other choices is correct. QUESTION ID
A couple are buying a large, old property and have had a survey carried out which has stated as follows:
‘A listed building which was extended 11 years ago by the current owner to include a single-storey lounge extension at the rear.’
The solicitor’s search has revealed no planning permissions or listed building consent relating to the property.
What advice should the solicitor acting for the couple give in relation to this issue?
E) The solicitor should advise that because the property is a listed building, the extension required both planning permission and listed building consent, and the local authority may bring an enforcement action at any time. Listed buildings are buildings on a statutory list because of their special architectural or historical qualities. Most work to a listed building requires both planning permission and listed building consent. Building work would certainly require such consents and there is no time limit for enforcement. Thus, (B) is incorrect. (A) is incorrect, as the permitted development rules do not apply to listed buildings. (C) is incorrect, as the extension requires both planning permission and listed building consent. (D) is incorrect because it incorrectly provides that the enforcement period is 10 years.
A solicitor is acting for a first-time buyer whose parents are gifting him the 10% deposit. The buyer has mentioned that his parents have concerns about the deposit arrangement and would like to speak to a solicitor. The son has asked his solicitor to represent his parents as well for convenience.
How should the solicitor respond to this request?
(B) The solicitor should decline to act for the parents due to the risk of a conflict of interest. A solicitor must avoid a conflict of interest or ‘significant risk’ of a conflict of interest between two or more clients on a transaction. A conflict of interest can arise if someone is gifting a deposit to the buyer of a property and a solicitor should, therefore, avoid acting for both parties. Here, the parents have expressed concerns about the deposit arrangement, which indicates a significant risk that a potential conflict could arise. Thus, the solicitor should decline to act for the parents. (A) is incorrect because, as explained above, the parents’ and the son’s interests could come into conflict in this transaction and the solicitor should therefore decline to act for the parents. (C) is incorrect because there is no indication of a lending relationship here; the parents are gifting the deposit. Further, whether or not the parents are considered a ‘lender’ does not remove the risk of a potential conflict arising, which the solicitor must avoid. (D) is incorrect because the solicitor does not need to cease representation of the son. The solicitor needs only to avoid the significant risk of a conflict arising by declining to represent the parents in addition to the son. (E) is incorrect because, as explained above, the solicitor must avoid a conflict of interest and must decline to represent the parents despite the son’s request.
A woman has exchanged contracts regarding the sale of her property. The contract included a fittings and contents form upon which the woman indicated that she was removing the ornamental shrubs and two small trees from the garden at the property. On the day of completion, the buyer attends the property and tells the woman that she is not entitled to remove the shrubs and trees from the property.
Is the buyer correct?
(B) Although the trees and shrubs do form part of the land, the woman has indicated on the fittings and contents form that they will be removed, and as this forms part of the contract, she is entitled to take the specified items. (A) is incorrect because the fittings and contents form supersedes the basic legal position. (C) is incorrect because the trees and shrubs are not personal property, they form part of the land. (D) is incorrect because the fittings and contents form permits the woman to remove the trees and shrubs. (E) is incorrect. The degree of annexation is one of the tests to be applied if it is not possible to distinguish between a fixture and a fitting whereas trees and shrubs are, by definition, part of the land.
A company supplies eco-friendly nail products to customers so they can achieve salon-style nails at home. Eighteen months ago, the company borrowed money from a director to buy an electric delivery van. The business has struggled financially over the last few months, and the board decide to repay the loan to the director whilst they have the cash to do so. The company has also paid a creditor who issued a statutory demand against the company and threatened to put the company into liquidation if the debt was not paid.
Could either of these two transactions amount to a preference if the company goes into liquidation or administration within six months of the payments?
(E) A preference arises where one person is preferred by a company, that is, where one person has been paid ahead of other creditors or put in a better position on insolvent liquidation or administration. However, for a payment to constitute a preference, the company must have desired to prefer the creditor. Here, the facts made it clear the company had a desire to favour the director, but the company was more or less forced to pay the outside creditor, because they had issued a statutory demand. (A) is incorrect. While it is true that both transactions came within the relevant time period (two years for connected persons, six months for others) as explained above, the payment to the outside creditor was not a preference because the company did not have an intention to prefer the outside creditor. (B) is incorrect. Again, the time period is not a problem, but as explained above, the payment to the director likely is a preference because it was made with a desire to prefer the director. (C) is incorrect as a company can enter into a preference with an unconnected third party if they make a payment to the third party with a desire to prefer them and that puts the third party in a better position than they otherwise would have been in liquidation. (D) is incorrect because both payments were made within the relevant time period. QUESTION ID: BSL114
A husband is the sole registered proprietor of a matrimonial home he lives in with his wife. The wife contributed a portion of the home’s purchase price. The husband now wishes to take out a mortgage over the property for the purposes of his business. A bank agrees to provide him the mortgage.
Which of the following is a requirement that must be satisfied prior to the bank’s completion of the mortgage?
A) One requirement that must be satisfied prior to the bank’s completion of the mortgage is that the wife must be given full financial information. If a mortgagee is lending money for a purpose other than the acquisition of the property (for example, to finance one spouse’s business), the other spouse is effectively acting as guarantor of the spouse’s debts. As such, there may be a risk of undue influence and that spouse must be separately represented by another solicitor and given full financial information. These requirements are designed to protect the spouse who is not a registered proprietor of the marital home. Here, since the bank is lending money to finance the husband’s business, the wife must be given full financial information prior to completion of the mortgage. (B) is incorrect because, as explained above, one requirement is that the husband and wife must be represented by separate solicitors. (C) is incorrect because the wife need not be a registered proprietor of the home for the husband to take out a mortgage. The creditor must satisfy itself, though, that she understands the implications of the transaction in a meaningful way. (D) and (E) are incorrect because no such requirements apply in this situation
A father is the sole registered proprietor of a property. His daughter contributed the full purchase price of £200,000 when the property was purchased and the father contributed nothing. The father and daughter entered into a declaration of trust to reflect this arrangement. The property is now being sold for £250,000.
How will the sale proceeds be distributed?
(E) In distribution of the sale proceeds, £250,000 will pass to the daughter. A declaration of trust sets out the agreement between co-owners as to how their beneficial interest is held, which dictates how sale proceeds will be split upon an eventual sale of the property. Here, the daughter contributed 100% of the purchase price and the father contributed 0%. Thus, the daughter is entitled to the full sale proceeds upon sale, which means £250,000 will pass to her. (A) through (D) are incorrect because, as explained above, the daughter is entitled to the full amount of sale proceeds. Though he is the registered proprietor, the father is not entitled to any portion of the proceeds. He is holding the property on behalf of his daughter as a bare trustee. The declaration of trust is conclusive as to the agreement between the co-owners as to the beneficial interest.QUESTION ID: LAN131
The owner of a property with registered title has taken a shortcut to the public highway by walking through their neighbour’s wood land for the last five years. When challenged by the neighbour, the owner went to see their solicitor, because they were convinced that their property enjoyed a right-of-way over the woodland.
How would a right of way be evidenced on the owner’s title?
D) A right which benefits a property appears on the property register of the title taking the benefit. Thus, all of the other answers are incorrect.QUESTION ID: LAN121
A solicitor acting for a buyer of a property has investigated the unregistered title produced by the seller’s solicitor as part of the contract package. The solicitor has noted that the root of title shows Peter Green and Brenda French as the buyers. The sellers in the draft contract are shown as Peter Green and Brenda Green. The buyer’s solicitor raises a pre-contract enquiry asking the seller’s solicitor to remedy the break in the chain of ownership. Peter and Brenda married after they purchase the property.
What is the most likely solution to resolve this issue?
(D) The easiest way to resolve the issue is by obtaining and producing a copy of the marriage certificate for Peter and Brenda, as that would be sufficient explanation for the change of name from Brenda French to Brenda Green. (A) and (B) could be possible solutions in other circumstances (Peter might have transferred the property into the joint names of himself and Brenda; Brenda might have changed her name) but here, you are told that the parties got married, so the most likely solution for this issue is to produce a copy of the marriage certificate. (C) is incorrect as a passport is not a document of title. (E) is incorrect because a statutory declaration would not deal with a change of name.QUESTION ID: PRP076
A sole trader, Jojo Josephson, operates his business under the name Jojo’s Advertising. His letterhead is as follows:
Jojo’s Advertising
113 Good Business Lane, OXFORD
OX99 9999
Is this an acceptable letterhead for a sole proprietorship?
D) U.K. business entities must give certain trading disclosures on their letterhead. In the case of a sole trader, all that is required is that the individual disclose their business name, their real (full) name if it is different to the business name, and their business address. Here, the letterhead is not acceptable because the full name of the owner isn’t included. (A) and (B) are incorrect for the same reason (lack of the owner’s full name). (B) also is incorrect, both because it fails to mention the business name and because it suggests that a registered number is included in the letterhead (one is not included as a matter of fact and one is not required, as sole proprietorships don’t require registration numbers). (C) is incorrect because the letterhead of a sole trader does not need to include the part of the U.K. in which the business is operating. (E) is incorrect because the letterhead of a sole trader does not need to include the name of the business’s registered agent-that is a requirement for a company’s letterhead.
