The contract and exchange Flashcards
what is the certificate of title?
property is satisfactory for lending purposes. sent pre-completion to release funds/
what is full title guarantee?
Means that all property is free of all incumbrances other than those disclosed in the contract and those which it didn’t and could not have reasonably have known about.
what is limited title guarantee?
- Given by sellers with little knowledge of the property such as executors.
what is the deposit being held as stakeholder?
seller’s solicitor must keep the deposit safe and not pay it to the seller until completion (goes into stakeholder ledger as is not client money yet)/
what happens if deposit is held as agent?
seller may demand deposit immediately after exchange.
when can VAT be charged on a commercial property?
if a new build less than 3 years old.
Seller opted to tax.
what is VAT exempt supply?
residential property, except for new constructed.
commercial property over 3 years old and owner has opted not to tax/
what does A1 mean on the SCPC?
exempt supply- seller also agrees not to exercise the option to tax/
what does A2 mean on the SCPC?
using the property for the business of letting to produce rental income= standard condition 2 does not apply.
what is formula A?
Where the same solicitor holds contract signed by both seller and buyer e.g when a solicitor knows they will be abroad at the time of exchange.
what is formula C?
- Chain of transaction where money from one property is used to buy the next.
- Related sales and purchases must be tied together.
- Solicitor will release the contract to the solicitor who is dealing with the related transaction.
what document is used for the transfer deed?
TR1
what are the pre-completion searches for registered land?
OS1- confers a priority period of 30 working days.
- freezes register so no one else can add anything to the property.
what are the pre-completion searches for unregistered land?
- The buyer’s solicitor carries out a land charges search of the Land Charges Registry (Form K15)
- priority period of 15 working days.
- do not have to register within this time.
how is the transfer deed sent to the buyer’s solicitor?
First class post or document exchange.
if either party has failed to complete on time, can the non-defaulting party make time of the essence?
yes if they serve a notice to complete on the other.
Must then complete within 10 working days.
- must also pay compensation to the seller.
when must the charge and stamp duty land tax be registered/paid? (land transaction tax too)
register with companies house within 21 days of creating the charge
stamp duty must be paid within 14 days of completion.
land transaction tax within 30 days
what are some of the standard terms under the SCPC?
- full title guarantee (default)
- default completion date is 20 working days after the date of the contract, 2pm completion.
- deposit held as stakeholder.
- 10% deposit.
- purchase price inclusive of vat.
- risk passes once contracts are exchanged.
what are the terms under scs or scpc for delay for failure to complete?
- obliged to pay interest for each calendar day’s delay (weekends are counted)
- buyer can receive common law damages for their losses (if any) during delay. damages is different between compensation and loss.
for unregistered land, when should the register application be lodged?
within 2 months, or title will revert back to the seller.
