Topic 7 - The Legal Aspects of Property Purchase

Question 1

A licensed conveyancer:

Answer 1

A person who has spent at least two years in practical training with a solicitor or licensed conveyancer and has passed a number of specialist exams.

Question 2

Solicitors carry which insurance against professional negligence?

Answer 2

Professional indemnity insurance

Question 3

What searches are carried out by the conveyancer?

Answer 3

• Land Registry search - property, proprietorship and charges registers
• Land Charges Registry search
• Local Land Charges Registry Search and Enquiries of the Local Authority
• Bankruptcy search
• Commons registration search- checks it’s not common land

Question 4

Puisne mortgage

Answer 4

One where the lender does not have the title deeds as security for the mortgage. The lender holding the deeds is considered to be the first-charge holder. A puisne mortgage has the same position as a second-charge.

Question 5

A property information form is completed by who?

Answer 5

The vendor

Question 6

The vendor’s solicitor prepares the draft sales contract. What does this document specify?

Answer 6

• T&Cs of the purchase
• Buyer and vendor details
• The property being sold
• Agreed sale price
• Agreed deposit to be paid of exchange of contracts

Question 7

It is customary for a deposit of how much to be paid by the buyer to the vendor’s solicitor after the exchange of contracts?

Answer 7

10% but a lower one may be accepted. In some cases, no deposit is required at this stage.

Question 8

What has to be done by the solicitor after completion of a purchase?

Answer 8

• File a stamp duty land tax return within 14 days of the effective date of transaction and pay the applicable tax
• Apply for a registration of the new owner at the Land Registry
• Send a bill to the buyer to cover conveyancing fees and disbursements

Question 9

Solicitors may give advice on

Answer 9

The purchase / sale transaction

The mortgage itself

Ensuring the property is covered by building and contents

Question 10

Can a remortgage be completed without these searches?

Answer 10

It is common for lenders in remortgage cases to let the borrowers solicitor to organise indemnity insurance rather than carry out the standard searches. Allows everyone to be safe and a faster process

Question 11

What information is on the sellers property information form

Answer 11

Boundaries 
Disputes with neighbours 
Notices
Guarantees
Service to it e.g. water and gas
Sharing with neighbours- any joint responsibility for common areas
Arrangements and rights
Changes to the property
Planning and building control issues
Fittings included in the sale  or fixtures to be removed
Other issues

Question 12

What are fixtures and fittings

Answer 12

Fixtures- permanent additions eg. Plumbed in or nailed down

Fittings- reasonable to take eg curtains , freestanding furniture

Where fixtures to be excluded from sale or fixtures added it should be clearly stated in country to avoid further problems

Question 13

Preparation of the Mortgage deed includes

Answer 13

Solicitor liaising with the lender to get the deed ready for completion

Solicitor may deal with assigning life assurance policies

Question 14

What happens after the exchange of contracts

Answer 14

Completion date agreed

Vendors solicitor gets a settlement figure for any money remaining on the house

Buyer signs mortgage deed a day or two before the purchase

Buyers solicitor sends a draft transfer deed to the vendors solicitor for the vendor to sign and returned in time for completion

Buyers solicitor will apply for the release of any mortgage money needed to complete The sale