Topic 7: The legal aspects of property purchase Flashcards
What is Professional Indemnity Insurance?
Taken by various professions to cover the legal costs and expenses incurred in their defence, as well as any damages or costs that may be awarded, if they are alleged to have provided inadequate advice and services or have been negligent therein
What is Investigation of title?
The checks carried out by the buyer’s solicitor in various registers to ensure that the property is what it is claimed to be, that the seller has the right to sell and the property is free from any restrictions that would cause problems.
What are fixtures?
Permanent additions to a property that are fixed to it – nailed, screwed, etc – and can’t easily be removed. This includes laminate flooring, fitted kitchen units and sanitary ware.
What are fittings?
Additions to a property that can easily be removed and it would be reasonable for the owner to take with them. This includes curtains, some carpets, rugs and freestanding furniture.
What is a licensed conveyancer?
A licensed conveyancer is a person who has met specific
requirements relating to study, qualification and experience as required by a recognised conveyancing organisation.
Unlike a solicitor, who can deal in a number of legal matters, their qualifications limit them to property‑related matters.
What is Insurance Against Defective Title?
Insurance products have been developed to protect mortgage lenders against defective title. These policies can be specific, or they may be arranged on a block basis. They may be especially
helpful where one lender is transferring a book of business to another, where a full investigation of each individual title would be very costly.
The extent of the cover can vary according to needs, but policies can provide cover against a solicitor’s failure to identify a title defect, which could include covenants, different types of title, easements and so on. The policies can be arranged to
protect only the lender, or the lender, the borrower and any
subsequent purchasers.
What is a Land Registry search?
Carried out if the land is registered and involves a search of the property,
proprietorship and charges registers.
What is a Land Charges Registry Search?
Carried out if the land is unregistered to check for puisne mortgages or spousal
interests.
What is a Local Land Charges Registry Search and Enquiries of the Local Authority search?
The Local Land Charges Register identifies details of obligations and restrictions
attaching to the property. These records are being transferred from local authorities to the Land Registry, with completion expected by 2025. Enquiries to the local authority identify road changes, town planning schemes and so on, which may affect the property
and apply to the land (both registered and unregistered) rather than the individual.
What is a Bankruptcy search?
Carried out by the lender’s solicitor to ensure that the applicant is not a bankrupt, and sometimes carried out on the vendor to confirm they have the right to receive the
proceeds of the sale. 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.
What is a Commons Registration search?
Checks that the land being sold is not common land. Usually applies where the land is in the countryside and previously undeveloped; or belonged to the Lord of the Manor; or is designated a town or village green.
What is a Puisne Mortgage?
A puisne mortgage is one where the lender on an unregistered property does not have the title deeds as security for the mortgage. For
unregistered land, the lender holding the title deeds is considered to be the first‑charge holder. A puisne mortgage holder is in the same position as a second or subsequent charge holder on registered land.
What is Spousal Interest?
Exists where a non‑owning spouse has lodged an interest in the property under the Family Law Act 1996.
CAN A REMORTGAGE BE COMPLETED WITHOUT
SEARCHES?
It is quite common in remortgage cases for the lender to allow
the borrower’s solicitor to arrange search indemnity insurance rather than carry out the standard property searches usually required.
The cover protects the homeowner and the lender against any financial consequences that might have arisen as a result of
the searches required, and allows the remortgage process to be completed more quickly than normal.
WHAT INFORMATION IS PROVIDED ON THE SELLER’S
PROPERTY INFORMATION FORM?
- Property boundaries
- Disputes with neighbours
- Notices affecting the property
- Guarantees relating to the property
- Services to the property
(Water, electricity, gas, etc.) - Sharing with neighbours
(Any joint responsibilities to pay for maintenance of joint or common areas, or any need to go on to neighbour’s property, or for neighbours to go on to the vendor’s property, for maintenance purposes). - Arrangements and rights
- Changes to the property
- Planning and building control issues
- Fittings included in the sale or fixtures that are to be removed
- Other issues to do with the mechanics of the sale
