TOPIC 13 - Assessing the property Flashcards
Possessory title is:
a) Title subject to defect in registration.
b) Applies where the land has been occupied for ten years without objection from the registered owner.
c) The owner is registered as the owner but is not protected from a claim by another person that they owned the land before it was registered.
c) The owner is registered as the owner but is not protected from a claim by another person that they owned the land before it was registered.
Adverse Possession title is:
a) Title subject to defect in registration.
b) Applies where the land has been occupied for ten years without objection from the registered owner.
c) The owner is registered as the owner but is not protected from a claim by another person that they owned the land before it was registered.
b) Applies where the land has been occupied for ten years without objection from the registered owner.
Qualified title is:
a) leasehold is good but the right of the lessor themselves to grant title may not be guaranteed.
b) Title subject to defect in registration.
c) Applies where the land has been occupied for ten years without objection from the registered owner.
b) Title subject to defect in registration.
For which type of freehold property is a lender least likely to agree to provide a mortgage?
A bungalow with a right of way for neighbours at the bottom of the garden.
A freehold flat.
A house with a positive covenant requiring the owner to maintain a boundary wall.
A freehold flat.
Many lenders will not lend on freehold flats. Easements and covenants are unlikely to affect a lender’s willingness to lend unless they are onerous, although they might affect the amount offered.
Parminder is hoping to buy a flat that has a 75-year lease. His lender is insisting on at least 80 years remaining on the lease. How can Parminder satisfy the lender’s requirement?
Once he owns the flat he will have the right to extend the lease by 90 years, so he can sign an undertaking to extend it as soon as he completes the purchase.
There is no way for Parminder to solve the problem.
He can gain an undertaking from the current owner to exercise their right to extend the lease and then transfer the right to Parminder on completion.
He can gain an undertaking from the current owner to exercise their right to extend the lease and then transfer the right to Parminder on completion.
Parminder will not gain a statutory right to extend the lease until he has owned the flat for two years. However, he could reach a formal agreement with the current owner that they will exercise their right to extend by making an application before completion, and then transfer those rights to Parminder on completion.
Why will mainstream lenders not provide mortgages for retirees to purchase flats in purpose-built retirement properties? Concerns over:
the age of the borrowers.
affordability.
the resale market and values.
the resale market and values.
Age and affordability are not necessarily barriers to lending to older people, as it is possible to arrange lifetime mortgages on most property. However, purpose-built retirement flats have a limited market, due to minimum age requirements for owners and high service charges. They are often far more expensive to buy than similar ordinary flats. Lenders are concerned that selling the flat on the owner’s death would be problematic and would affect its security.
Doris lives in a bungalow in a small town with a significant number of similar properties. Her sister Edith lives in a similar bungalow in a nearby town where bungalows are somewhat rare. Both towns are seen as upmarket, desirable places to live. Which of the following statements is true?
The sisters should achieve similar sale prices for their properties.
Edith would probably achieve a higher sale price than Doris.
Doris would probably achieve a higher sale price than Edith.
Edith would probably achieve a higher sale price than Doris.
All other things being equal, a large number of similar properties in an area would lead to a reduction in prices for that type of property compared with areas where similar properties are not so common.
Pre-manufactured property structures are:
backed by accreditation schemes.
not suitable for mortgage lending purposes.
not designed to meet modern standards.
backed by accreditation schemes.
Which of the following leasehold flats is likely to prove the most difficult to mortgage? A flat:
above a small parade of shops in a village.
in a purpose-built residential block in the high street of a medium-sized town.
above a row of shops in the high street of a medium-sized town.
above a row of shops in the high street of a medium-sized town.
The ‘Flood Re’ scheme is:
designed to run for 20 years from 4 April 2016.
subsidised by the government.
available for properties built before 1 January 2009.
available for properties built before 1 January 2009.
The Flood Re scheme is designed to help property owners who live in areas with flood risk and is paid for by a levy on all home insurance companies. It is intended to run for 25 years from 4 April 2016.
Lenders tend to avoid lending on freehold flats because:
the owner can only acquire possessory title.
there might be difficulties in renewing the freehold.
it may be difficult to establish liability for commonly owned parts of the structure.
there is a limited market for this type of property.
it may be difficult to establish liability for commonly owned parts of the structure.
It may be difficult to establish liability for commonly owned parts of the structure. The freehold is owned outright – it does not have to be renewed. The market is limited only in the sense that it may be difficult to obtain a mortgage. There is no reason specific to freehold flats why an owner may only be able to acquire possessory title.
Which of the following is true in relation to leasehold tenure?
An owner must have held a lease for at least two years before they can apply for a lease extension.
Lenders will only consider lending on leasehold property with an unexpired lease of 40 years or more.
Most lenders are happy to lend on former local authority high-rise flats.
A marriage value only applies to extending leases with more than 75 years to run.
An owner must have held a lease for at least two years before they can apply for a lease extension.
Hardeep is considering buying one of four more or less identical flats in the same area, all of which are valued at £150,000, but each has a different remaining lease term. Which flat is most likely to have the highest marriage value?
The flat with a current unexpired lease of 90 years.
The flat with a current unexpired lease of 60 years.
The flat with a current unexpired lease of 40 years.
The flat with a current unexpired lease of 20 years.
The flat with a current unexpired lease of 20 years.
20 years – the difference between the value with the current short lease and the extended lease would be the most significant of the options.
Paula and Joe live in a converted water tower in a very rural area. The conversion was designed by an architect to their specific requirements. If they were to sell the property, there might be a limited market for it. True or false?
True False
True
Apartments in a retirement complex are usually easier to sell than those in other purpose-built developments. True or false?
True False
False. Retirement apartments are usually harder to sell due to the limited market and high service fees.
