SGS 3

Question 1

What is an incumbrance?

Answer 1

Something which burdens the land and may restrict owner or occupier from using land in a certain way.

Question 2

What incumbrances is a property sold subject to?

Answer 2

Check 4.1.2. SCPC

Question 3

What is not included for the purposes of incumbrances?

Answer 3

Mortgages - buyer buys free of this so no need for an SC to release seller from this.

Question 4

What is a full title guarantee?

Answer 4

Right to sell property

Property free from all charges and incumbrances and other third party rights other than those disclosed or could not reasonably know about (ss. 6(1) and 3(1) LP(MP)A 1994).

Question 5

When would limited title guarantee be given?

Answer 5

by trustees, power of attorneys, trustees’ PRs (guarantee that seller has not since last sale created any incumbrances and not aware of anyone else creating such.

Question 6

What would you advise buyer in relation to risk?

Answer 6

Property at risk from date of contract so get insurance cover in place from exchange if there is no obligation on the seller to insure from this point.

Question 7

What is a draft certificate of title?

Answer 7

Report on title in a standard format, showing that title is good and an acceptable security for mortgage. Sent to lender in draft format to ensure that lender will lend buyer agreed sum at completion.

Question 8

Pre-Exchange Steps?

Answer 8

Completion Date

Contract: agree and finalise with seller’s solicitor then send agreed form to buyer to sign.

Deposit: check SCPC 3.2.2. - vary undertakings.

Instructions

Certificate of Title

Question 9

What PCR issues does the undertaking raise?

Answer 9

O(11.2) - must perform within an agreed timescale or reasonable amount of time.

Question 10

What is a special condition?

Answer 10

an individual, specific clause drafted to meet the requirements of a particular deal.

Question 11

When WILL VAT apply?

Answer 11

Where the sale of freehold of new commercial building (less than three years old)

Where seller has opted to tax

Question 12

How do you know if the seller has opted to tax?

Answer 12

Check CPSE replies.

Question 13

What would need checking in terms of formula B?

Answer 13

FB outlines sending by first class post where’s SCPC 3.2.2 states must be by electronic means - check contract has been varied.

Question 14

Which encumbrances are specified in the contract?

Answer 14

Latent incumbrances (easements and covenants)

Defects in title

(refer to items on charges register)

Question 15

Variation of deposit clause?

Answer 15

On or before exchange of contracts, the buyer shall pay the seller a deposit of 5% of the purchase price. SCPC 3.2.1 shall not apply

Question 16

Declaration of waiver condition?

Answer 16

The Seller will hand to the Buyer, on the Completion Date, the original of the declaration of waiver, in the form attached to this contract, signed by Michael Phillips and dated at the date of this contract.