The Property Contract Flashcards
What are the legal requirements for a valid property contract under s2 Law of Property (Miscellaneous Provisions) Act 1989?
A. It must be in writing, signed by both parties, and contain all agreed terms.
B. It must be witnessed by a solicitor and registered at the Land Registry.
C. It must be oral, provided both parties acknowledge the agreement.
D. It must include the purchase price and be witnessed by a notary public.
A. It must be in writing, signed by both parties, and contain all agreed terms.
Explanation: A property contract must comply with s2 LP(MP)A 1989, which requires it to be in writing, signed, and include all agreed terms. It does not need to be witnessed or registered.
Which type of contract is typically used in residential property transactions?
A. A contract based on the Standard Conditions of Sale (SCS).
B. A contract incorporating the Standard Commercial Property Conditions (SCPC).
C. A completely bespoke contract without standard conditions.
D. A contract drafted by the buyer’s solicitor without reference to standard terms.
A. A contract based on the Standard Conditions of Sale (SCS).
Explanation: Residential property contracts typically incorporate the Standard Conditions of Sale (SCS), which standardize terms and streamline transactions.
When is a property contract NOT required?
A. When a commercial property is being sold subject to lease.
B. When the transaction involves a gift of land between family members.
C. When the seller retains an interest in the land after the sale.
D. When the land is unregistered.
B. When the transaction involves a gift of land between family members.
Explanation: A property contract is not needed for gifts of land, although a deed of gift is required to legally transfer ownership.
A buyer and seller agree on the sale of a property via email, confirming all terms in writing, but neither party signs a formal contract. Is this a valid property contract?
A. Yes, because all agreed terms were recorded in writing.
B. No, because the contract must be incorporated into a single signed document.
C. Yes, because email communications are legally binding in property transactions.
D. No, because an oral agreement is required in addition to written terms.
B. No, because the contract must be incorporated into a single signed document.
Explanation: s2 LP(MP)A 1989 requires all agreed terms to be contained in one signed document. Emails alone do not satisfy this requirement.
A buyer’s solicitor is drafting a contract for a commercial property transaction. What standard conditions should they incorporate?
A. Standard Conditions of Sale (SCS).
B. A contract drafted from scratch without standard conditions.
C. Land Registry Conditions of Transfer.
D. Standard Commercial Property Conditions (SCPC).
D. Standard Commercial Property Conditions (SCPC).
Explanation: Commercial transactions typically use the Standard Commercial Property Conditions (SCPC, 3rd Edition, 2018), which cover tax, occupational leases, and title issues.
A seller wants to reduce the required deposit from 10% to 5% upon exchange of contracts. How should this be handled?
A. It cannot be changed, as deposits must be 10% under property law.
B. The buyer and seller must verbally agree and notify the Land Registry.
C. A special condition should be added to the contract modifying the deposit amount.
D. The seller can issue a separate side agreement to confirm the change.
C. A special condition should be added to the contract modifying the deposit amount.
Explanation: Special conditions are used to modify standard contract terms. In this case, a clause reducing the deposit from 10% to 5% should be added.
A commercial property contract includes the SCPC but the seller’s solicitor has inserted several clauses favoring the seller. How should the buyer’s solicitor respond?
A. Accept the contract as it is, since the SCPC is standard.
B. Refuse to proceed, as any modification invalidates the SCPC.
C. Submit a new contract using only the SCS instead of SCPC.
D. Request amendments to rebalance the contract in favor of the buyer.
D. Request amendments to rebalance the contract in favor of the buyer.
Explanation: While the SCPC provides a standard framework, commercial contracts often favor the seller. The buyer’s solicitor should negotiate terms to ensure fairness.
A property contract includes a clause stating the land is free from encumbrances, but after exchange, the buyer discovers a restrictive covenant limiting development. What legal remedy does the buyer have?
A. None, as the contract has already been exchanged.
B. Request the Land Registry to remove the covenant.
C. Sue for misrepresentation if the seller failed to disclose the restriction.
D. Automatically terminate the contract.
C. Sue for misrepresentation if the seller failed to disclose the restriction.
Explanation: If a seller knowingly misrepresents title or restrictions, the buyer may claim misrepresentation and seek damages or rescission.
A buyer wants to purchase land that is unregistered. What additional step must take place after completion?
A. The seller must apply for a first registration of the land.
B. The buyer must apply for first registration with HM Land Registry.
C. The contract alone registers the buyer as the new owner.
D. No additional steps are required for unregistered land.
B. The buyer must apply for first registration with HM Land Registry.
Explanation: When purchasing unregistered land, the buyer must apply for first registration at HM Land Registry.
A buyer agrees to purchase land, but the contract is conditional on the seller obtaining planning permission. What is this type of contract called?
A. A conditional contract.
B. An unconditional contract.
C. A leasehold contract.
D. A variation agreement.
A. A conditional contract.
Explanation: A conditional contract depends on certain conditions being met before completion (e.g., planning permission). If the condition is not met, the contract may be terminated.
