Special Conditions in a Property Contract Flashcards
What is the main function of special conditions in a property contract?
A. To modify, exclude, or supplement the Standard Conditions of Sale (SCS) or Standard Commercial Property Conditions (SCPC)
B. To replace all standard conditions in a contract
C. To ensure that the buyer cannot withdraw from the transaction under any circumstances
D. To remove the need for legal due diligence
A. To modify, exclude, or supplement the Standard Conditions of Sale (SCS) or Standard Commercial Property Conditions (SCPC)
Explanation: Special conditions allow parties to customize a contract by modifying, excluding, or adding to the standard conditions, ensuring the agreement meets the specific needs of the transaction.
What is the purpose of Special Condition 2 in the standard residential contract?
A. To confirm the method of payment for the purchase price
B. To specify the title guarantee offered by the seller
C. To define the completion date and time
D. To determine who is responsible for property insurance
B. To specify the title guarantee offered by the seller
Explanation: Special Condition 2 specifies whether the seller is providing full or limited title guarantee. Full title guarantee is the default, but executors or administrators may provide limited title guarantee.
Under Special Condition 4 in the standard residential contract, what does “vacant possession” mean?
A. The property is free from mortgages and financial charges
B. The property is sold subject to existing leases
C. The property is sold with no occupants or tenancy agreements in place
D. The seller guarantees that the property has no incumbrances
D. The seller guarantees that the property has no incumbrances
Explanation: While vacant possession typically means the property is free of occupants, a buyer may also expect it to be free of incumbrances unless otherwise disclosed in the contract.
In a standard residential contract, which special condition prevents reliance on verbal statements made during negotiations?
A. Special Condition 3
B. Special Condition 4
C. Special Condition 5
D. Special Condition 6
D. Special Condition 6
Explanation: Special Condition 6 (Representations) states that neither party can rely on verbal representations, unless they are made in writing. This protects sellers from misrepresentation claims based on informal statements.
A residential property contract includes Special Condition 7, but the seller has a tenant living in the property. What must happen before completion?
A. The tenant must be served a legal eviction notice before exchange of contracts
B. The tenant must sign the contract to confirm they will vacate the property
C. The tenant is automatically required to leave once the sale is complete
D. The buyer must accept the tenant’s continued occupation
B. The tenant must sign the contract to confirm they will vacate the property
Explanation: Special Condition 7 (Occupier’s Consent) ensures that any non-owning adult occupiers sign an agreement confirming they will vacate before completion. This prevents disputes over overriding occupation rights.
A seller wants to complete at 3:00 p.m. instead of the default 2:00 p.m. What should be included in the contract?
A. A tailor-made special condition
B. A variation clause requiring buyer and seller consent
C. An amendment to Special Condition 5
D. A special condition allowing for a later completion time
D. A special condition allowing for a later completion time
Explanation: The standard completion time is 2:00 p.m., but a special condition can be added to allow for a later time without affecting the rest of the contract terms.
A seller and buyer want to keep the terms of their property contract confidential. What type of special condition should be included?
A. A confidentiality clause restricting disclosure to third parties
B. A non-compete clause preventing resale within a set period
C. A deposit clause requiring full payment upfront
D. A representation clause confirming all statements are true
A. A confidentiality clause restricting disclosure to third parties
Explanation: A confidentiality clause prevents either party from disclosing contract details to third parties. This is commonly used in high-value or commercial transactions.
A commercial contract includes Special Condition 9, which allows for VAT treatment selection. What is the default VAT position for commercial property?
A. VAT is always payable at 20%
B. VAT is only payable if the property is over three years old
C. VAT is payable unless the seller has not opted to tax
D. VAT is never payable on commercial property transactions
C. VAT is payable unless the seller has not opted to tax
Explanation: Under SCPC, VAT is payable on commercial properties unless the seller has not opted to tax the property. If VAT applies, it is usually charged at 20%.
A financial institution purchasing a commercial property wants to pay the balance of the purchase price from its own corporate account instead of its solicitor’s client account. What special condition allows this?
A. Special Condition 3
B. Special Condition 5
C. Special Condition 6
D. Special Condition 9
C. Special Condition 6
Explanation: Special Condition 6 allows the deposit and purchase funds to come from an account other than the buyer’s solicitor’s client account. This is common for corporate buyers.
A buyer purchasing part of a commercial property wants to ensure they have access rights over retained land. Which special condition should be included?
A. A warranty clause confirming the seller owns the entire property
B. An indemnity condition covering restrictive covenants
C. A clause reserving easements in the transfer deed
D. A clause allowing the buyer to access retained land through an express easement
D. A clause allowing the buyer to access retained land through an express easement
Explanation: In sales of part, access rights may need to be formally included in the contract via a special condition granting an express easement, ensuring legal access over retained land.
