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Property Law & Practice > SGS 4 - Completion and Remedies > Flashcards

SGS 4 - Completion and Remedies Flashcards

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1
Q

Which 4 steps does the buyers solicitor have to carry out in preparation for completion?

A
  1. Draft transfer
  2. Submit completion information and undertakings form
  3. Obtain finance
  4. Submit pre-completion searches

DSOS

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2
Q

How can the buyers solicitor draft the transfer?

A
  • BS drafts transfer after exchange of contracts
  • Then sends to SS
  • SCPC 7.3.2
  • S52 LPA states that this must be done in the form of a deed
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3
Q

What is the form of transfer that is used for transfer of the whole of a registered title?

A
  • TR1
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4
Q

What is a TR1 form used for? What are its alternative forms?

A
  • To transfer whole of existing freehold title

TP1 - used for transfer of part of the registered title

TR5 - for transfer of a portfolio of titles

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5
Q

What is the TA13 form used for - submit completion information and undertakings form?

A
  • Requires information for the completion and dealing w/ relevant undertakings frmo the seller solicitor
  • Sent by buyer solicitor&raquo_space; seller solicitor before completion
  • To get practical information about the completion arrangements, so that completion will run smoothly.
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6
Q

Which information is requested in the TA13 form?

A

BC TAMI
- Seller has a mortgage? Confirms that any outstanding mortgages will be repaid
- Seller completion statement setting out balance of funds required from buyer to complete
- Bank details from seller solicitors so BS knows where to send money
Information about where the keys can be collected

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7
Q

What does the completion statement in the TA13 show?

A
  • The amount that seller requires from the buyer
  • To complete
  • Comprises sale price of property + price of chattels less deposit paid at exchange + or less any apportionments
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8
Q

What is included in the buyers financial statement

A
  • BS sends to buyer a financial statement and the bill for their legal fees
  • Total cost of transaction for the buyer is shown
  • Including SDLT, registration fees, disbursements
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9
Q

When are the funds requested from the lender who has helped finance the purchase?

A
  • Funds requested from the lender by providing the draft certificate of title to the lender
  • Before the exchange
  • BS should contact the lender to make sure that the money will arrive in good time for the day of completion
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10
Q

Who is responsible for all of the pre-completion searches?

A
  • Buyers solicitor
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11
Q

What are the pre-completion searches on registered land?

A
  1. OS1 - land registry priority search
  2. Solvency searches on the buyer - company / K16 on individual
  3. Solvency searches on the seller
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12
Q

What is included in the pre-completion search: OS1 land registry priority search?

A
  • This will 1) check if any further entries have been made on official copies of register for property,
  • Like new mortgages / charges / covenants / easements / deed of variation.
    2) Provides searches with priority period of 30 working days
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13
Q

What is the most common reason for something to come up on the OS1 search?

A
  • Seller may have re-mortgaged property

- Or entered into an additional mortgage

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14
Q

Explain the purpose of the OS1 search to provide the searcher with a priority period of 30 working days?

A
  • OS1 application is made in the name of the lender
  • Which confers protection to both the lender and the borrower
  • No third parties can lodge an interest into the Land Registry during this time.
  • Cannot extend this period by doing another search
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15
Q

Explain the process of doing solvency searches on the buyer as a pre completion check?

A
  • If BS is acting for both buyer and lender
  • In relation to purchase of a property
  • Will need to carry out solvency searches
  • Buyer is company > company house search. Checks if buyer is still in existence
  • Buyer is individual > bankruptcy search > Form K16 at the central land charges department
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16
Q

Which search is done if the buyer is a company?

A
  • Companies house search
  • To check that the buyer is still in existence
  • Only is BS acting for both buyer and lender
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17
Q

Explain solvency searches on the seller

A
  • Company search will be carried out against corporate seller by BS.
  • Bc a sellers floating charges and pending insolvency will not be revealed on the Land Registry title
  • In view of complications that could arise - is pragmatic to check
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18
Q

What checks should be done if the seller is an individual?

A
  • No requirement for BS to carry out bankruptcy / any solvency searches against the seller
  • Because if the seller has been made banktrupt > would be noted on the sellers registered title
  • And would come up on the OS1 search result
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19
Q

What are the 3 tasks that the SELLERS solicitor must carry out in preparation for completion?

A
  1. Reply to competiton info and undertakings form
  2. Prepare a completion statement for the buyers solicitor and request a redemption statement from the sellers lenders
  3. Agree the form of Transfer and arrange this to be executed by the seller.
20
Q

What is the redemption figure? Who has to obtain it and when?

A
  • Shortly before completion
  • Seller solicitor has to obtain redemption figure from seller lender
  • This is the amount that is required by the lender to pay off the seller mortgage
  • Once paid, charge is removed from the Charges Register
21
Q

When does the TR1 form have to be executed?

A
  • Seller always has to execute it
  • Buyer will not always execute the TR1 but should do so if
    • Entering into new covenants
    • Giving seller indemnity covenant
    • Declaring a trust
    Should be dealt with well in advance of completion
22
Q

Give an overview of the methods of completion:

A
  • Personal attendance by BS
  • Post - Law society has a code
    • Funds receieved&raquo_space; TR1 dates&raquo_space; title documents to property can be sent to BS
23
Q

What does the BS need to ensure just before completing?

A
  1. Completion information
  2. Transfer
  3. Pay completion monies
24
Q

Just before completion, explain what the BS has to do re COMPLETION INFORMATION

A
  • Completion Information and Undertakings Form

- And relevant undertakings

25
Q

Just before completion, explain what the BS has to do re TRANSFER

A
  • The TR1 has been signed&raquo_space; will usually be held by the sellers solicitor have been given to BS by SS
26
Q

Just before completion, explain what the BS has to do re PAY COMPLETION MONIES

A
  • Check that all necessary funds have been received from the buyer
  • Normally money is sent via bank transfer (CHAPs or telegraphic transfer)
27
Q

List the 5 documents that need to be handed to the sellers solicitors

A

A ROSE

Any title / deeds relating to the property held by seller

Receipts for payment apportionments and receipts for any chattels purchased separately

Originals of planning permissions / building regulation approvals / guarantee

SS undertaking in respect of any outstanding charges on the property

Executed and dated TR1

28
Q

What will the sellers solicitor do immediately on completion?

A
  • Remit funds required to redeem the charge
  • Forward evidence of the discharge to the BS as soon as it is received from the lender
  • This can be a completed form DS1
  • Or a copy of the confirmation letter from the lender that an ED / E-DS1 has been sent to Land Registry
29
Q

What are the 2 elements in the sellers solicitors undertaking?

A
  1. Undertaking to remit funds required to redeem the charge

2. Undertaking to forward the DS1 / ED / e-DS1 discharge of confirmation within a short specified time frame

30
Q

What happened in the case of Patel v Daybells?

A
  • Risk for buyer in completing the purchase on the basis of SS undertaking.
  • SS failed to redeem the mortgage
  • Held - BS was not negligent in accepting an undertaking from SS that an outstanding mortgage on the property would be discharged out of the purchase monies and that a DS1 would be forwarded after completion.
31
Q

Which 4 things does the SS need to do ON THE DAY OF COMPLETION?

A
  1. Report to client re completion.
  2. Date the TR1 transfer. Never backdate.
  3. Arrange for the lenders charge to be discharged. On same day.
  4. Send client balance of sale proceeds.
32
Q

What 3 POST COMPLETION STEPS does the SS need to do?

A
  1. Prepare notices to third parties - e.g. to tenants. Prepare these notices and hand over to buyer.
  2. Forward DS1 to buyer solicitor. Once redemption funds are received by them. DS1 then sent by the SS to the BS.
33
Q

What does the BUYER / LENDER SOLICITOR do on the date of completion

A
  1. Report to client - both buyer and lender informed ASAP

2. Date the legal charge (mortgage) - date of completion is inserted in the legal charge immediately on completion.

34
Q

Which post completion steps should the buyer / lender solicitor do?

A
  1. Check title documents - all relevant original documents on completion.
  2. Company buyer - perfection of security.
35
Q

In the post completion steps, explain the “perfection of security” that the buyer / lender solicitor does?

A
  • Makes security is valid against third parties
  • & has priority against other creditors
  • Must be registered at Companies House within 21 days
  • Starting with the date after the creation of the charge
  • Using FORM MR01 and paying £23
36
Q

In the post completion steps, explain what happens if the “perfection of security” that the buyer / lender solicitor does is NOT completed?

A
  • Security not valid against administrators
  • If charge is void for non registration - amount secured becomes payable on demand
  • Failure to register will usually be construed as negligence by the solicitor who failed to register. Should always be agreed between borrower solicitor and lender solicitor.
37
Q

What is the form AP1 used for?

A
  • Charge by way of legal mortgage

- Must be perfected by registration at the Land Registry.

38
Q

Explain what needs to be done re SDLT?

A
  • Lodge land transaction return that gives transaction details to HMRC
  • Pay SDLT due within 30 days of effective date
39
Q

What happens if a certified of the SDLT 5 acknowledging receipt of the Land Transaction return is not lodged at the land registry?

A
  • The land registry will not accept application to register the transfer of the property to a new owner
40
Q

What must be sent alongside the form AP1?

A

a) Transfer (usually Form TR1);
b) discharge of the seller’s charge (a DS1, unless the discharge has been dealt with by ED/e-DS1 or it is a receipted mortgage where the seller’s mortgage relates to unregistered land – see Chapter 5);
c) Legal Charge / Debenture rel. to buyer’s new mortgage;
d) Registration certificate from Companies House (see pt.` 4); and
e) the SDLT 5 acknowledgement.

May be additional docs that BS needs to lodge at the Land Registry

41
Q

What must be submitted during the priority period of 30 working days from the date of the OS1 search?

A
  • Transfer relating to purchase

- Any new mortgage

42
Q

What is the title information document?

A
  • Updated set of official copies showing new registered proprietors
  • Once land registry has completed the registration it will issue the Title Information Document
43
Q

When is compensation available?

A
  • For each day of delay

- Including weekends

44
Q

When will time of the essence?

A
  • Party can only rescind contract if time is of the essenceA) Specific contractual provision
    B) By implication from surrounding circumstances
    C) Correct service of notice to complete

SCPC 9.1.1

45
Q

What happened in the case of William Sindall v Cambridgeshire?

A
  • Held
  • Replying that “not so far as the seller is aware”
  • Is the assertion that the seller has made reasonable investigations into the matter
46
Q

What was held in the case of Gordon v Selico?

A
  • Seller cannot deliberately mislead the buyer
  • By concealing physical defects
  • Or answering enquiries DISHONESTLY

Property Law & Practice (6 decks)

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