Stage 8: Pre-Completion Flashcards
deere: preparation of transfer deed
who prepares this and when is it sent?
- Typically prepared by the buyer’s solicitor and sent straight after exchange (if it is a straightforward conveyance seller may send with pre-exchange pack)
how must a transfer of land take place?
- Transfer of legal estate must be done by valid deed, i.e.: clear on the face of it it is a deed, signed and delivered (seal no longer compulsory)
re: preparation of transfer deed
how is the transfer deed executed by an individual?
must be in the presence of an independent witness
re: preparation of transfer deed
how is the transfer deed executed by a company?
always in the name of the company:
1. Company seal in accordance with articles “executed as a deed by affixing the common seal of [company name] in the presence of […]”
2. A D and CS or 2 Ds “executed as a deed by [name of company] acting by [D & CS / 2 Ds]
3. 1 D in the presence of a witness who attests the signature “executed as a deed by [name of company] acting by a D in the presence of […]
re: preparation of transfer deed
who always executes the deed?
The seller will always execute the deed (as they need to transfer the land)
re: preparation of transfer deed
when does the buyer execute the deed?
the buyer will only execute the deed if they are entering into an obligation or making a declaration in TR1 (i.e. giving an IC or declaring a BI)
who prepares the mortgage deed?
If also acting for the lender, the buyer’s solicitor will also prepare the mortgage deed
re: preparation of transfer deed
what rebuttable presumption applies?
documents that are a deed on the face of it have been delivered on execution (i.e. if the solicitor does not want the transfer to take place immediately on signing, they must say so in the cover letter)
re: preparation of transfer deed
what transfer deed is used with reg. land?
TR1 deed form to transfer whole title & TP1 for part transfers
re: preparation of transfer deed
what transfer deed is used with unreg. land?
compulsory 1st registration, but could use a conveyance
re: preparation of transfer deed
what must the deed reflect?
Deed must reflect terms of contract & title deeds.
what are the key points from TR1?
o Pt 1 & 2 ensure names, addresses, info from official copy is all correct;
o Pt 3 TR1 dated on completion day
o Pt 7 ‘transferor transfers property to transferee’ do not amend
o Pt 10 ‘declaration of trust’ completed if there are co-owners
o Pt 11 ‘additional provisions’ i.e. ICs
when should pre-completion searches be undertaken?
as close to completion as possible
what pre-completion searches should be undertaken?
- Search of Title
- Checking the Buyer’s Solvency
re: search of title (reg land)
what information do the forms require?
- OS1/OS2 requires: title number, address, name of registered proprietors and applications, reason for search
re: search of title (reg land)
how is this done?
- Title number searched with LR on Form OS1 (whole) or OS2 (part sale. Plan to be inc. with OS2 unless there is already an LR-approved plan)
- Search from ‘search from’ date (i.e. date official copy was produced)
a fee is payable
re: search of title (reg land)
how are the results recorded?
Form OSR1/OSR2
re: search of title (reg land)
what do the results show/do?
- Search shows any new entries since the ‘search from’ date and gives the applicant a ‘priority period’ of 30 working days from the search date.
re: search of title (reg land)
explain the search is there is a lender involved
- If the purchase is funded by the lender, OS1/OS2 should be in the name of the lender & tick ‘take a registered charge’ box. This is because the charge is registered after the buyer is registered as the owner. Therefore, if the OS1 is in the buyer’s name only, it would not protect the lender. The OS1 in the lender’s name protects the buyer and lender.
what is the effect of a priority period?
o They will not be bound by any entries lodged in the priority period so long as they register the transfer by noon on the last day of the priority period
re: search of title (unreg land)
how is this done?
Land charges search on Form K15 against current owners only
There is a fee for this
o NB: bankruptcy check of buyer also done on this form at the same time
re: search of title (unreg land)
how are results returned?
results on Form K18
re: search of title (unreg land)
what is the effect of this search?
- Confers a 15 working day priority period
re: search of title (unreg land)
when is this search not needed?
- This search is completed as part of the pre-exchange enquiries. If completion happens within 15 working days of the 1st search, this need not be repeated
re: buyer’s solvency
how is an individual checked?
o Reg land. ‘Bankruptcy only’ land charge search on Form K16
o Unreg. land Form K15 (added to title search)
re: buyer’s / seller’s solvency
how is a company checked?
company search
what does a company search reveal?
This will reveal whether the company is still in existence; it is solvent and any fixed or floating charges
what does a company search not do?
o No priority period so the search must be as close to completion as possible
what should be done if there are concerns as to the company’s solvency?
o If the transaction is of high value or there are concerns as to solvency, a telephone search at the Registry of Winding Up Petitions at the Companies Court should be done on the day of completion
re: seller’s solvency
how is an individual checked?
o Reg. land searches considered unnecessary because if there is nothing on the title regarding bankruptcy and the buyer is acting in good faith without notice, they will take good title from the bankrupt seller (even though title is vested in the trustee in bankruptcy)
o Unreg. land will be uncovered as part of land charges searches
who completes the completion information form?
- Buyer’s solicitor completes this form and send it to the seller’s solicitor.
re: completion information form
what information is included on this?
- Most common form is TA13 which includes: arrangements for key handover; place and method of completion; documents to be handed over; amount payable on completion; provision for discharge of mortgage,
re: completion information form
what is relevant to ‘provision of discharge of mortgage’?
Buyer’s solicitor requests an undertaking from the seller’s solicitor to pay the mortgage out of the completion money and send evidence once received
If seller’s solicitor replies ‘yes’, this is an undertaking.
Undertaking is very important. It should be agreed before completion.
Seller’s solicitor might ask the buyer to send the money to redeem the mortgage direct to the lender, and the rest to the solicitor
what must the solicitor do in terms of finances?
- Solicitor must send a Financial Statement to the buyer setting out the funds they must send to the solicitor to complete i.e.: balance of PP, SDLT / LTT, registration fee, solicitor & disbursement fees, other amounts i.e. insurance
- The buyer’s solicitor will also need to obtain the mortgage advance.
what is included in the financial statement?
the funds they must send to the solicitor to complete i.e.: balance of PP, SDLT / LTT, registration fee, solicitor & disbursement fees, other amounts i.e. insurance
what will the lender want before giving a mortgage advance?
Before giving the advance, the lender will want:
o COT, solvency search against the borrowers, OS1R in the name of the lender, executed mortgage deed
