Topic 7 The Legal Aspects Of Property Purchase

Question 1

A licenced conveyor must have met what criteria that has been recognised by recognised conveyancing organisation

Answer 1

• Study
• Qualification
• Experience

Question 2

These are what in relation to an advocate or solicitor?

• Purchase/sale transaction
• Mortgage itself & related questions
• Ensuring the property is covered by life assurance

Answer 2

Questions that a Solicitor/Conveyancer may be asked

Question 3

Fees for a legal service such as title searches cannot be refunded once this service has been provided?

True or False

Answer 3

True

Question 4

What type of insurance would a Solicitor/Conveyancer hold to protect against claims of negligence?

Answer 4

Indemnity insurance

Question 5

In eastern Scotland some Scottish solicitors act as selling agents for houses. Why is this attractive for a vendor?

Answer 5

Single firm is acts as selling & legal advice which can save on costs

Question 6

What is involved in an “Investigation of Title”?

Answer 6

• Enquires to ensure a property is what it is claimed to be
• Free from restrictions that would affect the sale

Question 7

A solicitor/Conveyancer would produce a “Certificate of Title” what does this process find out?

Answer 7

• That the vendor is the legal owner
• Vendor is entitled to sell the property

Question 8

What could a defective title mean for a buyer?

Answer 8

They could not have purchased what they thought they had

Question 9

What could a defective title mean for a lender?

Answer 9

They may not be able to rights over the property (affects it’s security)

Question 10

How could an insurance company protect against a defective title?

Answer 10

Can arrange specific or block policies to cover something a solicitor may fail to identify

Question 11

What search is this that a solicitor/conveyancing may carry out?

• Carried out if land is registered & involves a search of the property, proprietorship & charges registers

Answer 11

Land Registry Search

Question 12

What search is this that a solicitor/conveyancing may carry out?

Carried out if the land is unregistered to check for pusine mortgages or spousal interest

Answer 12

Land Charges Registry Search

Question 13

What is “Professional Indemnity insurance”?

Answer 13

Insurance taken out to cover legal expenses if they are alleged to have negligent

Question 14

What search is this that a solicitor/conveyancing may carry out?

• Identifies details of obligations & restrictions attaching to the property. (Transferred to Land Registry)
• Enquiries to the local authority identify road changes, town planning schemes etc affecting property & land

Answer 14

Local Land Charges Registry search & Enquiries of the Local Authority

Question 15

What search is this that a solicitor/conveyancing may carry out?

• Carried out to ensure applicant is not bankrupt
• Check is vendor has right to receive sale proceeds

Answer 15

Bankruptcy Search

Question 16

What search is this that a solicitor/conveyancing may carry out?

Check that the land is not common land

Answer 16

Commons Registry search

Question 17

What is a “Puisne Mortgage”?

Answer 17

Mortgage where the lender on Unregistered land does not have the title deeds as security for the mortgage

Question 18

For a lender who holds the title deeds on unregistered land is considered to be first charge holder

True or False

Answer 18

True

Question 19

Is a “Puisne Mortgage” holder in the same position as a first charge holder?

Answer 19

No

They are viewed as second or subsequent charges holder

Question 20

What is “Spousal Interest”?

Answer 20

Non-owning spouse has lodged an interest in the property using Family Law Act 1996

Question 21

In the cases of a re-mortgage it is common for a lender to allow a borrower’s Solicitor/Conveyancer to arrange “Search Indemnity Insurance” rather than carry out standard property searches why is this done?

Answer 21

Covers the homeowner & lender financial consequences that might have arisen as a result of the searches required

Question 22

These are what in relation to a “Law Society Property Information Form”?

• Property boundaries & responsibility for maintenance
• Occupiers
• Environmental
• Disputes with neighbours
• Notices affecting the property

Answer 22

What is included in on the form

Question 23

These are what in relation to a “Law Society Property Information Form”?

• Guarantees & Warranties
• Insurance on the property
• Parking arrangements (including rights for other vehicles)
• Arrangements & rights relating to property (Including informal arrangements)

Answer 23

What is included on the form

Question 24

These are what in relation to a “Law Society Property Information Form”?

• Changes to the property
• Planning & Building control matters
• Fittings included in sale or fixtures that are to be removed
• Other issues to do with the mechanics of the sale

Answer 24

What is included on the form

Question 25

What are "Fixtures"? Think**fixed**

Answer 25

Items that are **permanent** additions to the property Items that are - Screwed in - Nailed down - Plumed in

Question 26

Is it normal or not normal for "Fixtures" to be included in the sale?

Answer 26

Normal

Question 27

What are "Fittings"?

Answer 27

Items that it would be reasonable for the vendor to take with them - Carpets - Furniture

Question 28

It is the responsibility of which Solicitor/Conveyancer to ensure the mortgage deed is ready for completion?

Answer 28

Buyer's solicitor

Question 29

It is the responsibility of which Solicitor/Conveyancer to ensure the draft sales contract is ready for completion?

Answer 29

Vendor's solicitor

Question 30

This is what in relation to a "Draft Sales Contract"? - Terms & conditions of the purchase - Buyer & Vendor details - Property being sold - Agreed sale price - Agreed deposit to be paid

Answer 30

What is included in the Draft Sales Contract

Question 31

Once contracts have been exchanged it is customary for a deposit of how much purchase price to be paid to the Vendor's solicitor?

Answer 31

10%

Question 32

In Scotland the completion date is know as?

Answer 32

Date of Entry

Question 33

In Scotland the final acceptance of an offer to purchase is called what?

Answer 33

The missives

Question 34

Who has to complete these tasks after completion of a property transfer? - File a "Stamp Duty Land Tax" return on (effective) completion - Apply for registration of the new owner at the land registry - **Mortgage to be noted at the land registry if applicable** - Send a bill to the buyer to cover conveying fees & disbursements

Answer 34

Buyer's solicitor/conveyancer

Question 35

Within how many days must a "Stamp Duty Land Tax" return must be completed?

Answer 35

14 days

Question 36

Expenses paid on the buyers behalf such as SDLT and registration fees are called what are called what?

Answer 36

Disbursements

Question 37

A vendor who is an undischarged bankrupt is entitled to receive the proceeds of a sale? True or False

Answer 37

False **Their assets are controlled by an insolvency practitioner**

Question 38

The purchaser is the only person who could be protected by defective title insurance? True or False

Answer 38

False It could protect a buyer and seller