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MORT > U3: T7 - THE LEGAL ASPECTS OF PROPERTY PURCHASE > Flashcards

U3: T7 - THE LEGAL ASPECTS OF PROPERTY PURCHASE Flashcards

1
Q

a) In which register would you find:
ii) details of restrictive covenants?

A

ii) The charges register.

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2
Q

a) In which register would you find:
i) a plan of the property?

A

A) i) The property register.

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3
Q

What is the most desirable class of title from an owner’s and lender’s perspective?

A

B) The absolute title

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4
Q

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?

A

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.

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5
Q

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.

A

b) Professional indemnity insurance.

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6
Q

Why is it important for the lender to be provided with certificate of title?

A

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.

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7
Q

Town planning issues will be highlighted by a Local Land Charges Registry search.

True or false?

A

False. They would be shown in enquiries of the local authority.

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8
Q

Why might a bankruptcy search be carried out on a vendor?

A

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.

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9
Q

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?

A

The seller’s property information form.

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10
Q

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.

A

b) A wardrobe would be classified as a fitting if it was a free‐standing one (but not if it was built in).

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11
Q

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.

A

c) The amount of the mortgage loan is a matter only for the buyer so would not be included in the sale contract.

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12
Q

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.

A

c) The vendor completes a ‘seller’s property information form’ before exchange of contracts.

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13
Q

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.

A

b) From completion as this is the point where the ownership of the property changes hands.

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14
Q

When a borrower Is remortgaging, it is possible to minimise the conveyancing work involved by arranging search indemnity insurance.

True or false?

A

True

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15
Q

Define puisne mortgage?

A

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.

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16
Q

Define spousal interest

A

Exists where a non‐owning spouse has lodged an interest in the property under the Family Law Act 1996.

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17
Q

When does legal charge take place when buying a house?

A

The legal charge for the mortgage takes effect at completion because it is not until this point that ownership changes.

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18
Q

By how many days must Stamp Duty Land Tax return be filed after completion?

A

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

19
Q

Who files the SDLT return?

A

The solicitor

20
Q

Define disbursement?

A

Expenses paid by the solicitor on the buyer’s behalf, such as stamp duty land tax, registration fees, searches, etc.

21
Q

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.

A

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.

22
Q

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.

A

C) Both the lender and purchaser.

Defective title insurance can be arranged to protect the lender, the purchaser or both.

23
Q

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.

A

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.

24
Q

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.

A

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.

25
Q

All solicitors carry professional indemnity insurance to protect them in the event of claims for _____?

A

Negligence

26
Q

An estate agent is marketing a house with a new fitted kitchen. The main components of the kitchen will be classified as fittings. True or false?

A

False

Fittings are items that are not intended to be fixed permanently and could be taken by the vendor if they chose. Fixtures are items fixed to the walls and floors that form a permanent part of the fabric of the building, such as fitted kitchens.

27
Q

A solicitor has drawn up a draft contract. Which of the following would not be included? Select all the correct answers.

A) Property details.
B) Agreed sale price.
C) Amount of the mortgage.
D) Deposit required.
E) Buyer details.
F) Insurance details.

A

C) Amount of the mortgage.
F) Insurance details.
Not included

28
Q

Which document is a formal and binding contract between mortgagee and mortgagor?

A) The purchase contract.
B) The mortgage deed.
C) The mortgage offer.

A

B) The mortgage deed.

The purchase contract is between the vendor and the buyer. The mortgage offer is merely an offer and not a binding contract.

29
Q

Which of the following statements is true in relation to the house-buying process?

A) No further searches are required once contracts have been exchanged.
B) The legal charge for the mortgage takes effect at completion.
C) The buyer’s solicitor files a stamp duty land tax return and pays the applicable tax shortly before completion.

A

B) The legal charge for the mortgage takes effect at completion.

After exchange of contracts, the buyer’s solicitor carries out a further bankruptcy search and final Land Registry searches to make sure nothing has changed and that the report on title is consistent with the application details. The stamp duty land tax return is filed and the tax paid after completion.

30
Q

Once in force, the contents of a mortgage deed can be varied:

A) on the instruction of the mortgagee without the consent of the mortgagor.
B) on the instruction of the mortgagor without the consent of the mortgagee.
C) only with the consent of both parties to the contract.

A

C) only with the consent of both parties to the contract.

Neither party can vary the contents or terms of an existing deed without the agreement of the other party to the contract.

31
Q

What type of insurance must a solicitor have in case of claims of negligence against them?

A) Professional indemnity insurance.
B) Law Society insurance.
C) Public liability insurance.
D) Partnership insurance.

A

A) Professional indemnity insurance.

32
Q

Why is it important for the lender to be provided with certificate of title?

A) For insurance purposes.
B) If the title is defective, the lender may not be able to exercise its rights over the property.
C) To meet record-keeping requirements.

A

B) If the title is defective, the lender may not be able to exercise its rights over the property.

33
Q

Town planning issues will be highlighted by a Local Land Charges Registry search. True or false?

A

False

34
Q

A vendor who is an undischarged bankrupt would not be entitled to receive the proceeds of a sale. True or false?

A

True

35
Q

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?

A) Key features illustration.
B) The seller’s property information form.
C) Disclosure form.

A

B) The seller’s property information form.

36
Q

Which of the following would usually be classified as a fitting?

A) A free‑standing wardrobe.
B) A built‑in oven.
C) Laminate flooring.
D) A bathroom vanity unit.

A

A) A free‑standing wardrobe.

37
Q

Which of the following would not be contained in a draft sale contract?

A) Details of the property being sold.
B) The agreed deposit.
C) The amount of the mortgage loan.
D) Details of the buyer and vendor.

A

C) The amount of the mortgage loan.

38
Q

Which of the following processes is not carried out between exchange of contracts and completion?

A) The vendor completes a ‘seller’s property information form’.
B) The vendor’s solicitor obtains a settlement figure to repay any outstanding mortgage on their property.
C) The buyer’s solicitor applies for release of mortgage funds.
D) The buyer signs the mortgage deed.

A

A) The vendor completes a ‘seller’s property information form’.

39
Q

The legal charge for the mortgage takes effect:

A) when the lender issues its offer of advance.
B) from the point where the solicitor registers the new owner at the Land Registry.
C) from the point where contracts are exchanged.
D) from completion.

A

D) from completion.

40
Q

When a borrower is remortgaging, it is possible to minimise the conveyancing work involved by arranging search indemnity insurance. True or false?

A

True

41
Q

If the land is registered, which of the following searches are carried out?

A) Land Registry Search
B) Land Charges Registry Search

A

A) Land Registry Search

42
Q

If the land is unregistered, which of the following searches are carried out?

A) Land Registry Search
B) Land Charges Registry Search

A

B) Land Charges Registry Search

43
Q

a) In which register would you find:
iii) the class of title applying to the property?

A

iii) The proprietorship register.

MORT (30 decks)

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