Topic 7 Flashcards
Legal aspects of property purchase
The buyer’s solicitor must file a stamp duty land tax return and pay the applicable tax within how many days of the effective date of the transaction?
a) 7 days.
b) 10 days.
c) 14 days
d) 28 days.
c) 14 days
The buyer’s solicitor must file a stamp duty land tax return and pay the applicable tax within 14 days of the effective date of the transaction.
Which of the following can be protected by defective title insurance?
The purchaser only.
The lender only.
Both the lender and purchaser.
Both the lender and purchaser.
Defective title insurance can be arranged to protect the lender, the purchaser or both.
A lender’s solicitor carries out a bankruptcy search on the vendor. What is the purpose of the search?
To check whether the vendor has ever been bankrupt.
To check whether the vendor is entitled to receive the proceeds of the sale.
To check the vendor’s overall credit rating.
To check whether the vendor is entitled to receive the proceeds of the sale.
An undischarged bankruptcy order means that any money due to the vendor must be reported to the trustee in bankruptcy, who is legally able to claim the money to settle debts.
A search of which register at the Land Registry would identify restrictions attaching to a property?
Land Charges Registry.
Covenant and Easement Registry.
Local Land Charges Registry.
Local Land Charges Registry.
A Land Charges Registry search is carried out if the land is unregistered to check for puisne mortgages or spousal interests. There is no Covenant and Easement Registry search.
All solicitors carry professional indemnity insurance to protect them in the event of claims for negligence.
True or false?
True. All solicitors carry professional indemnity insurance to protect them in the event of claims for negligence.
A solicitor has drawn up a draft contract. Which of the following would not be included? Select all that apply.
a) Property details.
b) Agreed sale price.
c) Amount of the mortgage.
d) Deposit required.
c) Amount of the mortgage.
Neither the mortgage amount nor insurance details would be included because they are not relevant.
An estate agent is marketing a house with a new fitted kitchen. The main components of the kitchen will be classified as fittings. True or false?
False. Fittings are items that are not intended to be fixed permanently and could be taken by the vendor if they chose. Fixtures are items fixed to the walls and floors that form a permanent part of the fabric of the building, such as fitted kitchens.
Which of the following documents is a formal and binding contract between mortgagee and mortgagor?
a) The mortgage offer.
b) The purchase contract.
c) The mortgage deed.
c) The mortgage deed.
The purchase contract is between the vendor and the buyer.
The mortgage offer is merely an offer and not a binding contract.
Which of the following statements is true in relation to the house-buying process?
No further searches are required once contracts have been exchanged.
The legal charge for the mortgage takes effect at completion.
The buyer’s solicitor files a stamp duty land tax return and pays the applicable tax shortly before completion.
The legal charge for the mortgage takes effect at completion.
After exchange of contracts, the buyer’s solicitor carries out a further bankruptcy search and final Land Registry searches to make sure nothing has changed and that the report on title is consistent with the application details. The stamp duty land tax return is filed and the tax paid after completion.
Once in force, the contents of a mortgage deed can be varied:
on the instruction of the mortgagee without the consent of the mortgagor.
on the instruction of the mortgagor without the consent of the mortgagee.
only with the consent of both parties to the contract.
only with the consent of both parties to the contract.
Neither party can vary the contents or terms of an existing deed without the agreement of the other party to the contract.
What type of insurance must a solicitor have in case of claims of negligence against them?
a) Professional indemnity insurance.
b) Public liability insurance.
c) Law Society insurance.
d) Partnership insurance.
a) Professional indemnity insurance.
Why is it important for the lender to be provided with certificate of title?
a) For insurance purposes.
b) To meet record-keeping requirements.
c) If the title is defective, the lender may not be able to exercise its rights over the property.
c) If the title is defective in any way, the lender might not be able to exercise its rights over the property and thus the mortgage loan might not be fully secured.
Town planning issues will be highlighted by a Local Land Charges Registry search.
True or false?
False. They would be shown in enquiries of the local authority.
A vendor who is an undischarged bankrupt would not be entitled to receive the proceeds of a sale.
True or false?
True. A vendor who is an undischarged bankrupt would not be entitled to receive the proceeds of the sale as their assets are controlled by an insolvency practitioner.
Carmen and Joanna had a long‑running dispute with their neighbour over his poor maintenance of the boundary wall dividing their properties. On what document were the couple required to declare this issue when they sold their property?
a) Key features illustration.
b) Disclosure form.
c) The seller’s property information form.
c) The seller’s property information form.
