The Contract and Exchange Flashcards
What will lender’s solicitor do in commercial transaction?
- Specify what enquiries / searches needed
- Ask buyer’s solicitor to send copies of all searches
- Draft legal charge and other security documents
- Draft certificate of title / ask buyer’s solicitor to provide
What are the different lending documents?
1) Mortgage offer
2) Certificate of title
3) Facility letter
4) Legal charge (or mortgage deed)
What requirements must a contract for land satisfy?
1) In writing
2) Incorporate all express terms
3) Be signed
Is a property contract a deed?
No
Does the property contract transfer the land?
No
So why use a property contract?
- Fix completion date
- Tie related transactions
- Set out obligations
- Include conditions
What are the different types of contracts?
1) Standard Form Contract
2) Tailor made contract
What is the standard form contract for residential land?
Standard Conditions of Sale
What is the standard form contract for commercial land?
Standard Commercial Property Conditions
When is a contract typically tailor made?
- Commercial transactions
When are Standard Conditions of Sale obligatory?
If the parties are adopting the Law Society Conveyancing Protocol
When are special conditions not already in the Standard Conditions of Sale be applicable if the solicitor is following the Law Society Conveyancing Protocol?
If they are absolutely necessary for the purposes of the transaction
What must the seller disclose in terms of incumbrances and defects in title?
Whether there are any latent incumbrances or defects in title
What are latent incumbrances?
Rights burdening the property not apparent on inspection
What are examples of latent incumbrances?
Covenants and easements
What is an example of a defect on title?
If a deed containing covenants has been lost
In the Standard Conditions of Sale, what are the incumbrances subject to which the property is sold?
1) Those specified in contract
2) Those discoverable on inspection before date of contract
3) Those seller does not and could not reasonably know about
4) Those, other than mortgages, which buyer knows about
5) Entries made before the date of contract in any public register except those maintained by Land Registry / Land Charges Department
6) Public requirements
In the Standard Commercial Property Conditions, what are the incumbrances subject to which the property is sold?
1) Those specified in contract
2) Those discoverable on inspection before date of contract
3) Those seller does not and could not reasonably know about
4) Those, other than mortgages, which buyer knows about
5) Public requirements
What is the difference between SCS and SCPC on incumbrances?
SCS – seller needs to disclose any incumbrances registered at Land Registry, Land Charges and Companies House – or be in breach.
SCPC – buyer deemed to buy subject to incumbrances which would be revealed by buyer’s searches and enquiries
A guarantee by the seller to the quality of title
What are the different title guarantees in Contract?
1) Full title guarantee (the default)
2) Limited title guarantee
3) No title guarantee
What is full title guarantee?
Property is free of all incumbrances other than those in contract – which seller guarantees
What is limited title guarantee?
Given by sellers with little knowledge (i.e. executors) – meaning no incumbrances have been created since seller’s period of ownership
What is no title guarantee?
Does not guarantee seller’s right to sell, or that property is free of incumbrances.
