U3: T7 - THE LEGAL ASPECTS OF PROPERTY PURCHASE Flashcards
a) In which register would you find:
ii) details of restrictive covenants?
ii) The charges register.
a) In which register would you find:
i) a plan of the property?
A) i) The property register.
What is the most desirable class of title from an owner’s and lender’s perspective?
B) The absolute title
Contract exchange is the point of no return – the vendor is obliged to sell and the purchaser is obliged to buy.
Technically, either party can still withdraw from the transaction, but what consequences might this entail?
Such action would be a breach of contract and would lead to loss of the deposit and possible court action against either party for breach of contract.
What type of insurance must a solicitor have in case of claims of negligence against them?
a) Public liability insurance.
b) Professional indemnity insurance.
c) Partnership insurance.
d) Law Society insurance.
b) Professional indemnity insurance.
Why is it important for the lender to be provided with certificate of title?
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.
Why might a bankruptcy search be carried out on a vendor?
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 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?
The seller’s property information form.
Which of the following would usually be classified as a fitting?
a) A built‐in oven.
b) A free‐standing wardrobe.
c) Laminate flooring.
d) A bathroom vanity unit.
b) A wardrobe would be classified as a fitting if it was a free‐standing one (but not if it was built in).
Which of the following would not be contained in a draft sale contract?
a) Details of the buyer and vendor.
b) The agreed deposit.
c) The amount of the mortgage loan.
d) Details of the property being sold.
c) The amount of the mortgage loan is a matter only for the buyer so would not be included in the sale contract.
Which of the following processes is not carried out between exchange of contracts and completion?
a) The vendor’s solicitor obtains a settlement figure to repay any outstanding mortgage on their property.
b) The buyer signs the mortgage deed.
c) The vendor completes a ‘seller’s property information form’.
d) The buyer’s solicitor applies for release of mortgage funds.
c) The vendor completes a ‘seller’s property information form’ before exchange of contracts.
The legal charge for the mortgage takes effect:
a) from the point where the solicitor registers the new owner at the Land Registry.
b) from completion.
c) when the lender issues its offer of advance.
d) from the point where contracts are exchanged.
b) From completion as this is the point where the ownership of the property changes hands.
When a borrower Is remortgaging, it is possible to minimise the conveyancing work involved by arranging search indemnity insurance.
True or false?
True
Define 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.
Define spousal interest
Exists where a non‐owning spouse has lodged an interest in the property under the Family Law Act 1996.
When does legal charge take place when buying a house?
The legal charge for the mortgage takes effect at completion because it is not until this point that ownership changes.
By how many days must Stamp Duty Land Tax return be filed after completion?
14 days
A stamp duty land tax return must be filed within 14 days of the effective date of the transaction and pay the applicable tax. The effective date is usually completion
Who files the SDLT return?
The solicitor
Define disbursement?
Expenses paid by the solicitor on the buyer’s behalf, such as stamp duty land tax, registration fees, searches, etc.
After how many years of training and qualifying employment can a conveyancer apply for a full licence?
A) Two years.
B) Three years.
C) Five years.
C) Five years.
A conveyancer is licensed once they have spent at least two years in practical training with a solicitor or licensed conveyancer (known as ‘qualifying employment’), and has passed a number of specialist conveyancing exams. After spending a further three years in qualifying employment, they can apply for a full licence.
Which of the following can be protected by defective title insurance?
A) The purchaser only.
B) The lender only.
C) Both the lender and purchaser.
C) 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?
A) To check whether the vendor has ever been bankrupt.
B) To check whether the vendor is entitled to receive the proceeds of the sale.
C) To check the vendor’s overall credit rating.
B) 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?
A) Land Charges Registry.
B) Covenant and Easement Registry.
C) Local Land Charges Registry.
C) 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.
