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.