Unit 3

Question 1

Which of the following is true in all circumstances in relation to unsolicited real-time financial promotions?
A. They can only be made to existing customers.
B. They cannot be made at an unsocial hour.
C. Contract cannot be made on an unlisted telephone number.
D. They can be made to any person who is on the company’s mailing list.

Answer 1

A. They can only be made to existing customers.

Question 2

Alex is his firm’s marketing manager and he has just withdrawn a marketing mail shot, which will not be used again. For how long just his firm keep a copy of the mail shot?
A. 6 months
B. 12 months
C. 36 months
D. 60 months

Answer 2

B. 12 months

Question 3

For how long must a firm keep a record of an execution-only sale?
A. One year
B. Two years
C. Three years
D. Five years

Answer 3

C. Three years

Question 4

Examples of the APRC shown in a financial promotion must be ‘representative’. This means that a specified percentage of those who respond to the promotion and those who enter into the contract advertised would be charged the quoted APRC.
What is the percentage?
A. 45 per cent
B. 51 per cent
C. 75 per cent
D. 35 per cent

Answer 4

B. 51 per cent

Question 5

If a recommendation is made over the telephone, an illustration must be sent to the customer within:
A. Five business days
B. Seven business days
C. Five calendar days
D. Seven calendar days

Answer 5

A. Five business days

Question 6

If a mortgage adviser asks a customer about the age at which they expect to retire, this is most likely to be so that the adviser can:
A. Ascertain whether the type of property the customer is interested in buying is suitable for them
B. Recommend an appropriate term for the mortgage
C. Ensure that the customer can afford the repayments from their pension scheme
D. Establish whether the customer is good at long-term planning

Answer 6

B. Recommend an appropriate term for the mortgage.
The adviser is most likely to ask about retirement plans to help them suggest an appropriate term for the mortgage, since many lenders are reluctant to agree to borrowing that will not be repaid before the customer retires.

Question 7

What is the effect of a trustee in bankruptcy filing a ‘Form J restriction’ with the Land Registry in relation to a bankrupt’s property?
A. It prevents the owners from selling the property
B. It permits the trustee in bankruptcy to sell the property without recourse to the owners
C. It requires the Land Registry to note the trustee’s interest in the property and notify the trustee of any dealings relating to it
D. It restricts the owner’s right of entry to the property

Answer 7

C. It requires the Land Registry to note the trustee’s interest in the property and notify the trustee of any dealings relating to it

Question 8

Which of the following would be most likely considered a credible repayment strategy for an interest-only mortgage?
A. Planning to use a promised inheritance from a relative
B. Relying on the increase in value of the property to provide equity that can be released to pay off the loan
C. Using the proceeds from the sale of another property owned by the borrower
D. Using a pension commencement lump sum to pay off the loan

Answer 8

C. Using the proceeds from the sale of another property owned by the borrower
Providing the value of the other property is qual to or greater than the sum needed to pay off the loan, this is last likely to be considered a credible repayment strategy.
Using a pension commencement lump sum (PCLS) might also be a credible approach but only if the pension pot is large enough to provide a PCLS equivalent to the loan.
Relying on an inheritance or a substantial increase in the value of the property are both too uncertain.

Question 9

For an interest-only mortgage, how often must the lender carry out a review of the borrower’s repayment strategy?
A. At least once during the term
B. Whenever the borrower requests it
C. At least once every five years
D. Halfway through the term

Answer 9

A. At least once during the term.

Question 10

Which of the following TWO statements are true in relation to the Flood Re scheme?
A. Insurers must reinsure flood risk through the Flood Re scheme
B. The premium the insurer pays to Flood Re on each property depends on how often the property has flooded in the past
C. Only properties built before 2009 are covered by the Flood Re scheme
D. The insurer may pass on the cost of its Flood Re premium in the premium it charges the property owner

Answer 10

C and D are correct.
Only properties built before 2009 are covered by the Flood Re scheme.
The insurer may pass on the cost of its Flood Re premium in the premium it charges the property owner.

Question 11

Which of the following would be included in both a RICS Home Survey Level 1 and 2 Report?
A. A valuation
B. Issues that need urgent attention
C. Advice on how to deal with remedial work
D. A report on the property’s energy efficiency

Answer 11

B. Issues that need urgent attention.

Question 12

Ben bought a newly built house four years ago and it is covered by the Buildmark scheme. It now requires structural repair as a result of a defect in the construction materials.
Ben is entitled to:
A. Require the builder to make good the property
B. Claim under the Buildmark insurance scheme for the full cost of the repair
C. Claim under the Buildmark insurance scheme if the cost of the work is above the minimum claim value
D. Claim a percentage of the repair costs because the cover reduces for each year he has occupied the property

Answer 12

C. Claim under the Buildmark insurance scheme if the cost of the work is above the minimum claim value.

Question 13

Which of the following would be exempt from building regulations?
A. A 25m^3 extension
B. Cavity wall insulation
C. A detached garage with a floor area of 20m^3
D. A loft conversion

Answer 13

C. A detached garage with a floor area of 20m^3.

Question 14

Private Medical Insurance (PMI) may become a priority at what life stage?
A. Young, single person
B. Younger couple with children
C. Middle-aged couple, children have left home

Answer 14

C. Middle-aged couple, children have left home.

Question 15

The certificate of the title confirms that the seller of the property:
A. Is the legal owner or their legal representative and is entitled to sell it
B. Correctly registered the property and paid the required registration fees when he bought it
C. Is the sole registered owner of the property and does not hold it on trust for anyone else
D. Is UK resident for tax purposes or is otherwise legally entitled to own property

Answer 15

A. Is the legal owner or their legal representative and is entitled to sell it.

Question 16

Building societies are allowed to hold what proportion of their commercial assets in loans to limited companies secured on land?
A. 5%
B. 10%
C. 25%
D. 100%

Answer 16

C. 25%.
A maximum of 25 per cent of a building society’s commercial assets can be held in loans to limited companies secured on land.

Question 17

Heather owns a flat on a leasehold basis and wishes to exercise her statutory right under leasehold reform legislation to buy the collective freehold.
How long must the original lease have been granted for her to do this?
A. 35 years
B. 12 years
C. 15 years
D. 21 years

Answer 17

D. 21 years.
The lessee (leaseholder) may have statutory rights to buy out the lessor (freeholder) is the length of the lease exceeds 21 years.

Question 18

When a sole borrower dies without leaving a will, the personal representatives can sell the property to redeem the mortgage when:
A. The death certificate is issued
B. A grant of probate is issued
C. The death certificate is acknowledged by the lender
D. The court grants letters of administration to the legal personal representatives

Answer 18

D. The court grants letters of administration to the legal personal representatives.
If the deceased has not left a will, the representative is an administrator, appointed by letters of administration.

Question 19

At what stage in the house buying process in England and Wales does a purchaser or their Solicitor actually have to arrange for payment to be transferred to the vendor?
A. Submission of offer
B. Acceptance of offer
C. Completion
D. Exchange of contacts

Answer 19

C. Exchange of contracts.
When contracts are exchanged the solicitors will agree a ‘completion’ date for the sale, which is when the balance of the sale price is paid and keys are given to the buyer.
It is typically around 28 days after exchange, to allow for final legal work to be completed.

Question 20

When the tenure of a block of flats is commonhold, what are the individual flat owners called?
A. Unit-owners
B. Freeholders
C. Leaseholders
D. Common owners

Answer 20

A. Unit-owners.

Question 21

What documents would you check to assess the ability of a company’s director(s) to bind the company to a mortgage contract?
A. The credit file of the director(s) concerned
B. The articles of association of the company
C. The report and accounts of the company
D. The Certificate of Incorporation of the company

Answer 21

B. The articles of association of the company.
Before making a lending decision, it is prudent for the lender to confirm that the company is permitted by its memorandum and articles of association to borrow, whether there are restrictions or limits on such borrowing and whether the individuals the lender is dealing with have authority to commit the company to borrowing.

Question 22

What is the final certificate which a lender needs to receive from the buyer’s solicitor prior to releasing the mortgage funds?
A. Title search
B. Re-inspection report
C. Final inspection certificate
D. Certificate of title

Answer 22

D. Certificate of title.
The certificate of title is produced by the buyer’s solicitor to confirm that the property is what it is claimed to be and that it is free from restriction that would inhibit the sale process.

Question 23

A legal charge gives the lender:
A. Certain rights over the property while the mortgage is outstanding
B. The right to enter the mortgaged property if payments are not kept up
C. Joint ownership of the mortgaged property while the loan is outstanding
D. Legal ownership of the mortgaged property, while the borrower enjoys beneficial ownership

Answer 23

A. Certain rights over the property while the mortgage is outstanding.

Question 24

Who prepares the contracts which will be exchanged during the house purchase process?
A. The purchaser’s solicitor
B. The buyer’s lender
C. The lender’s solicitor
D. The vendor’s solicitor

Answer 24

D. The vendor’s solicitor.
The vendor’s (seller of the property) solicitor prepares the draft sales contract.

Question 25

The successful bidder at a property auction:
A. Has 28 days to exchange contracts
B. Is committed to purchase subject to a satisfactory survey
C. Is committed to purchase subject to being able to raise sufficient funds
D. Has entered a legally binding contract to complete the purchase

Answer 25

D. Has entered a legally binding contract to complete the purchase
Once a winning bid is accepted, a 10 per cent deposit is paid and contracts are exchanged on the day of the auction, so the buyer must be in a position to go ahead at the auction.
The buyer must complete the sale in 28 days or face penalties.

Question 26

Gazundering and gazumping are:
A. Illegal and offenders are liable to prosecution via the civil court system
B. Illegal and offenders are liable to prosecution via the criminal court system
C. Not illegal but considered bad faith
D. Not illegal but are subject to censure by professional bodies leading to large fines on vendors and purchasers alike

Answer 26

C. Not illegal but considered bad faith.
Gazundering is whereby the buyer lowers their offer at the last minute and gazumping is whereby the vendor, having accepted an offer, accepts a better offer from another buyer later on.
Although both are seen as unethical, it is legal because neither the vendor nor buyer is bound by an offer until exchange of contracts.

Question 27

The Family Law Act 1990 (England and Wales) enables a non-owning spouse to:
A. Have their name added to the title of the property if they are married or a civil partner to the registered owner
B. Continue in occupation or be given a right of entry and occupation
C. Take possession of the property to avoid possession being taken by the lender
D. Reclaim from the registered owner any money they contributed towards the running and upkeep of the property

Answer 27

B. Continue in occupation or be given a right of entry and occupation.
The legislation recognises the rights of a non-owning spouse to register an interest in the property through a formal entry on the charges register at the Land Registry for registered land or the land charges register for unregistered land.

Question 28

In the case of property purchase, who is liable for the actions of an estate agent under the principles of agency?
A. The regulator
B. The purchaser
C. The seller
D. The network that the agent belongs to

Answer 28

D. The network that the agent belongs to.
Under the general principle of agency, the principal (the vendor) is liable for the agent’s (the estate agent) actions unless the agent acted outside their authority.

Question 29

What is the main way of creating a mortgage in England and Wales?
A. Legal indemnity
B. Legal charge
C. Standard title
D. Standard security

Answer 29

B. Legal charge.

Question 30

Bankruptcy normally lasts for one year, but the restrictions might be extended if the individual:
A. Has complex assets
B. Does not cooperate with the trustee
C. Has debts in excess £100,000
D. Has been bankrupt before

Answer 30

B. Does not cooperate with the trustee.
In most cases the period of bankruptcy lasts for 12 months. However, the bankruptcy order can be extended if the individual does not cooperate with the trustee (person whose role is to seize their assets, sell them and use the proceeds to pay the court costs and settle as many of their debts as possible).

Question 31

It is not usually the role of an estate agent to:
A. Arrange insurance
B. Negotiate with a prospective tenant
C. Prepare a contract for sale
D. Carry out a valuation

Answer 31

C. Prepare a contract for sale.
This is usually the role of the vendor’s solicitor (draft of contracts).

Question 32

Which of these is a possible alternative to bankruptcy?
A. Individual voluntary arrangement
B. Individual voluntary proposal
C. Creditors voluntary arrangement
D. Debtor rescue arrangement

Answer 32

A. Individual voluntary arrangement.
Bankruptcy is not always the best course of action for creditors or debtors. Some people may have debts that they could afford to repay in part, and an individual voluntary arrangement (IVA) or debt relief order (DRO) may be a more appropriate option for them.

Question 33

The most common method of house sale in England and Wales is by:
A. Public treaty
B. Private treaty
C. Public auction
D. Missives

Answer 33

B. Private treaty.
Private treaty is the arrangement for the sale of a property at a Patrice negotiated directly between the vendor and the purchaser or their agents.

Question 34

How is the lender also described in mortgage documentation in England and Wales?
A. Mortgagor
B. Settlor
C. Debtor
D. Mortgagee

Answer 34

D. Mortgagee.
The lender is also known as the mortgagee and the borrower the mortgagor.

Question 35

Mortgage packagers are often described as middlemen operating between:
A. The lender and the intermediary or customer
B. The intermediary and customer
C. The lender and the solicitor
D. The intermediary and the estate agent

Answer 35

A. The lender and the intermediary or customer.
Mortgage packagers’ role is to undertake much of the administrative work, tailoring mortgage arrangements to specific situations.

Question 36

Which bank rate is most directly linked to mortgage interest rates?
A. Bank of England base rate
B. One-month London interbank offered rate (Libor)
C. Three-month Libor
D. Daily Sterling overnight indexed average rate (Sonia)

Answer 36

C. Three-month Libor.
Although mortgage interest rates are broadly linked to Bank rate, they are more directly affected by the three-month Libor, ultimately replaced by Sonia.

Question 37

Specialised (centralised) mortgage lenders raise funds for mortgage lending:
A. On the retail market
B. From depositors
C. On the wholesale market

Answer 37

C. On the wholesale market.
Specialised mortgage houses are funded from the wholesale market and lend on a centralised basis.

Question 38

What percentage of a building society’s total lending activities must be related to residential mortgages?
A. 25%
B. 50%
C. 75%
D. 90%

Answer 38

C. 75%.
At least 75 per cent of a building society’s total lending activities must be related to residential mortgages.

Question 39

Who would be considered a professional customer for mortgage lending?
A. An individual who has a financial services qualification
B. An individual who has worked in the home finance sector for at least a year in a professional position that requires knowledge of the product or service to be arranged
C. An individual who has a degree in business or finance

Answer 39

B. The FCA defines a professional customer as one who has worried in the home finance sector for at least a year, in a professional position that requires knowledge of the product or service to be arranged, and who the firm reasonably believes to be capable of understanding the risks involved in the proposed arrangements.
There is no mention of the need for a qualification.

Question 40

Which customer would be considered a high-net worth customer?
A. David who has an annual net income of £100,000 and £1m worth of net assets
B. Claire who has £2.5m worth of net assets
C. Jack who has an annual net income of £300,000 and £500,000 worth of net assets

Answer 40

C. Jack who has an annual net income of £300,000 and £500,000 worth of net assets.
The FCA defines a high-net-worth customer as one with a minimum annual net income of £300,000 or minimum net assets of £3m.
Lenders can apply more flexible processes to high-net-worth customers than for mainstream mortgages.

Question 41

Colette, Craig and Christine each wish to raise cash for their businesses by arranging a mortgage on a property they own and use as a dwelling.
Which of the following mortgages would be a regulated mortgage?
A. The mortgage of Colette, who wishes to raise money for her limited company
B. The mortgage of Craig, who is a sole trader with annual business turnover of £1.2m
C. The mortgage of Christine, who is in a business partnership with her husband, and has annual business turnover of £450,000

Answer 41

C. The mortgage of Christine, who is in a business partnership with her husband, and has annual business turnover of £450,000.
Mortgages to raise money for limited companies and limited liability partnerships are not regulated.
Mortgages to raise money for partnerships or sole traders are regulated if annual turnover is below £1m. This assumes that the property meets the criteria for a regulated mortgage.

Question 42

Which of the following statements is false in relation to a special purpose vehicle (SPV) used to hold property?
A. The SPV is owned and controlled by the shareholders
B. The SPV is a separate legal entity from the shareholders
C. Shareholders have no liability for any SPV debts
D. A mortgage lender is likely to require personal guarantees from directors

Answer 42

C. Shareholders DO have liability for SPV debts limited to the money they invested when buying shares, although directors (who may be shareholders) are liable to the limit of any guarantees provided to mortgage lenders.
The property is owned by the SPV, which is a separate legal entity and able to hold property and borrow in its own right. While the shareholders own the SPV, the SPV is the legal owner of the property.

Question 43

What is the minimum debt in England for creditors to petition for a debtor’s bankruptcy?
A. £1,500
B. £3,500
C. £5,000
D. £10,000

Answer 43

C. £5,000.
The minimum debt in England for creditors to petition for a debtor’s bankruptcy is £5,000.

Question 44

Brenda and Tom have been informed that their mortgage is a regulated lifetime mortgage.
Which of the following statements is true?
A. The lender will not under any circumstance require Tom and Brenda to make regular interest payments
B. Brenda and Tom must be in their 30s
C. The lender will now allow Brenda and Tom to roll up any interest payments
D. The mortgage will end if Tom and Brenda sell their house

Answer 44

D. The mortgage will end if Tom and Brenda sell their house.
A regulated lifetime mortgage must only be available to older borrowers over a certain (unspecified) age and a lender CANNOT seek full repayment until one of a number of specified events occurs such as selling the house.
The arrangement can require some capital and/or interest payments (but not total repayment), or interest can be deferred until the mortgage ends.

Question 45

Which of the following is untrue? To be classified as a regulated home reversion plan, the plan must end:
A. If the occupier enters residential care
B. If the occupier dies
C. At the end of a specified term of at least 20 years
D. At the end of a specified term of at least 25 years

Answer 45

D. At the end of a specified term of at least 25 years.
A regulated home reversion plan will end if the occupier dies or enters residential care,or at the end of a specified term of AT LEAST 20 years.

Question 46

Which of the following statements is false in relation to the Consumer Credit Acts of 1974 and 2006?
A. Regulated mortgages are exempt from the Consumer Credit Acts
B. The Acts do not apply to lending to limited companies
C. Second-charge loans are subject to the Consumer Credit Acts

Answer 46

C. Second-charge loans are NOT subject to the Consumer Credit Acts
Regulated mortgages, including second-charges, are EXEMPT from the Consumer Credit Acts. Loans to limited companies are not within the scope of Consumer Credit Acts.

Question 47

What type of lending became subject to MCOB rules in 2016, and included ‘back book’ loans
A. Bridging loans
B. Consumer buy to let
C. Second charge loans

Answer 47

C. Second charge loans.
Second charge loans became subject to MCOB rules in 2016 and included ‘back book’ loans.

Question 48

Which of the following is not a chapter of MCOB?
A. Application and purpose
B. Financial promotions
C. Training and competence
D. MCD: further advances

Answer 48

C. Training and competence.

Question 49

For mortgages secured on residential property to be regulated under the Consumer Credit Acts, their value has to be equal to or above?
A. £0
B. £10,000
C. £25,000
D. £30,000

Answer 49

C. £25,000.
Regulated mortgages of equal to or greater than £25,000 on residential property are regulated under the Consumer Credit Acts.

Question 50

Which of the following statements is false in relation to land tenure?
A. There may be some restrictions on what an owner can do with, or on, a freehold property
B. Lenders are usually reluctant to lend on property with a flying freehold
C. Leaseholders may be required to contribute towards the cost of maintenance for common areas of the building
D. For a 25-year mortgage on a leAsehold flat, a lender would require an unexpected lease term of at least 30-40 years

Answer 50

D. A lender for a leasehold flat usually requires a minimum unexpired lease term of 55-65 years.

Question 51

Which of the following statements apply to a leaseholder buying the freehold of their leasehold flat?
A. The original lease on their flat must have been for more than 21 years
B. At least 50% of the flats in the block must be held on a similarly long lease
C. At least two thirds of the owners in the block must agree to participate in the purchase
D. There must be at least 21 years left on the lease

Answer 51

A. The original lease on their flat must have been for more than 21 years.
The time left on the lease is irrelevant, as long as the original lease was for more than 21 years.
At least two thirds of the flats in the block must be held on a long lease.
At least 50% of the owners in the block must agree to participate in the purchase.

Question 52

Andrea has 40 years left in the lease of her flat and meets the criteria to extend her lease. If she took advantage of this right, what would be the length of the new lease?
A. 60 years
B. 90 years
C. 130 years

Answer 52

C. 130 years.
The extension would add 90 years to the existing term of the lease.

Question 53

Which Land Registry register holds details of the nature and class of title applying to a property?
A. The property register
B. The proprietorship register
C. The charges register

Answer 53

B. The proprietorship register holds details of the nature and class of title applying to a property.
The property register contains details of the land, its title number, and a plan of the property.
The charges register records any charges over the property.

Question 54

If registered land has been intentionally occupied for ten years without objection from the owner, the occupier cam claim title to the land.
This is known as:
A. Possessory title
B. Squatters’ rights / adverse possession
C. Qualified title rights

Answer 54

B. Squatters’ rights / adverse possession allows occupiers who have intentionally occupied registered land for 10 years without objection from the owner to claim title to the land.
Possessory title occurs when the owner is unable to produce the title deeds or other proof of title when the property is first registered.
Qualified title is rare and occurs where there is some defect n the title as registered, and so absolute or good leasehold title cannot be guaranteed.

Question 55

Pamela and Gareth are buying a house that is not yet registered with the Land Registry. Within what period must an application for first registration be registered?
A. 14 days
B. 30 days
C. 2 months

Answer 55

C. 2 months.
The deadline for unregistered land is two months. The 30-day deadline applies to registered land.

Question 56

Which one of the following statements does NOT apply to easements?
A. The benefit applies to the property rather than the owner
B. Encirclement creates an easement by necessity
C. Easements can generally impose a positive burden on a property
D. The property over which the right is held is called the ‘servient tenement’

Answer 56

C. Easements cannot generally impose a positive burden on a property.
With one or two exceptions, an easement cannot impose a positive burden on the servient tenement, i.e. cannot demand that the owner acts.

Question 57

The right under the Family Law Act 1996 for a non-owning spouse to enter and occupy their spouse’s registered property would be entered on the Land Registry:
A. Proprietorship register
B. Property register
C. Charges register

Answer 57

C. Charges register.
The legislation recognises the right of a non-owning spouse to register an interest in the property through a formal entry on the charges register at the Land Registry for registered land or the land charges register for unregistered land.

Question 58

James is buying a leasehold flat with a mortgage. How would the mortgage paperwork state the requirement for him to comply with the terms of the lease?
A. Within the lender’s right in the mortgage deed
B. As a borrower’s covenant in the mortgage deed
C. As a standard condition in the mortgage offer

Answer 58

B. As a borrower’s covenant in the mortgage deed.

Question 59

How long after taking possession of the land can a ‘squatter’ apply for ownership of registered land?
A. 12 years
B. 15 years
C. It is not possible in relation to registered land
D. 10 years

Answer 59

D. A squatter would need to occupy the land in question for a minimum of 10 years.

Question 60

Which of the following statements is true in relation to estate agents?
A. There are no restrictions on an estate agent acting as an agent for both the buyer and seller
B. Online estate agents charge lower fees because they do not carry out valuations or arrange viewings
C. Estate agents with a high-street presence usually charge vendors commission based on a percentage of the sale price

Answer 60

C. Estate agents with a high-street presence usually charge vendors commission based on a percentage of the sale price.

Question 61

An estate agent is insisting he is legally entitled to his commission, even though the property was sold to a buyer introduced directly to the vendor by a friend.
Which type of agreement must the vendor have signed with the agent?
A. Sole agency
B. Fixed price
C. Sole selling rights

Answer 61

C. Sole selling rights
With sole agency, the agent has exclusive rights to sell the property but will not be entitled to a fee if the vendor finds a buyer.
Sole selling rights means the agent has exclusive rights to sell the property and will receive the fee even if the vendor or a third party finds a buyer.

Question 62

Which of one of the following statements is true?
A. Only the vendor is responsible for any damage to the property between exchange of contracts and completion
B. The buyer pays a refundable deposit on exchange of contracts
C. Contracts may contain a long-stop date condition to allow the buyer an extension if there are problems with their mortgage
D. Both parties are legally bound to complete the transaction once contracts are exchanged

Answer 62

D. Both parties are legally bound to complete the transaction once contracts are exchanged.
A long-stop date condition would apply to contracts for a new property, and allow the buyer to withdraw from the contract without penalty if the developer fails to complete building by a certain date.

Question 63

Katrina has made a successful bid for a property through the modern method of auction.
This means she:
A. Has a maximum of 56 days to complete the purchase
B. Must pay a refundable 5% deposit when her bid is successful
C. Must exchange contracts on the day her bid is accepted

Answer 63

A. Has a maximum of 56 days to complete the purchase.
Katrina has 28 days to exchange contracts and a further 28 days to complete, for a total of 56 days.
She must pay a NON-refundable reservation fee of 5% when her bid is successful.

Question 64

After how many years of training and qualifying employment can a conveyancer apply for a full license?
A. Two years
B. Three years
C. Five years

Answer 64

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 license.

Question 65

A search at 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

Answer 65

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.

Question 66

A solicitor has drawn up a draft contract. Which of the following would NOT be included?
A. Property details
B. Agreed sale price
C. Amount of the mortgage
D. Deposit required

Answer 66

C. The amount of the mortgage would not be included because it would not be relevant.

Question 67

Town planning issues will be highlighted by what search?
A. Enquiries of the local authority
B. Local land charges registry
C. Land charges registry

Answer 67

A. Town planning issues will be highlighted in enquiries of the local authority.

Question 68

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 the point where contracts are exchanged
C. From completion
D. When the lender issues its offer of advance

Answer 68

A. The legal charge for the mortgage takes effect from the point where the solicitor registers the new owner at the Land Registry.

Question 69

Which of the following is a requirement for initial disclosure information on a new mortgage?
A. A list of all lenders whose products the firm offers if it does not offer an unlimited service
B. The exact fee the firm will charge and when it will be payable
C. Details of appropriate mortgage products
D. An assessment of the appropriateness of alternative finance options

Answer 69

A. A list of all lenders whose products the firm offers if it does not offer an unlimited service.
The firm must state the exact fee if it is know, BUT can provide an indication of how the fees would work if an exact figure is not yet known.
There is no requirement to provide any product details at this stage, because NO advice has been given.
The client must be made aware of potential alternative options but there is no requirement to assess their appropriateness.

Question 70

Which of the following statements is true of execution-only?
A. A firm can offer execution-only as a standard service
B. Records of execution-only sales must be kept for 12 months from the start of the contract
C. Execution-only is permitted when there is no interactive dialogue between the firm and the customer during the sale

Answer 70

C. Execution-only is permitted when there is no interactive dialogue between the firm and the customer during the sale.

Question 71

When advising on a MCD regulated mortgage, the lender or intermediary must provide the customer with:
A. A suitability report outlining the product details and reasons for the recommendation
B. An adequate explanation of the recommended product
C. A key features illustration (KFI) explaining how the product works

Answer 71

B. An adequate explanation of the recommend product.
Suitability reports do not apply to mortgages.
KFIs are given as part of the pre-application requirements for NON-MCD regulated mortgages.

Question 72

For how long from the date of a customer’s mortgage application must a firm keep a record of a key features illustration or a European Standardised Information Sheet?
A. One year
B. Three years
C. Five years

Answer 72

A. A firm must keep a record of a KFI or ESIS for one year from the date of the mortgage application.

Question 73

MCOB 7 covers the disclosure requirements at the start of a new mortgage contract. At which point must the required information be provided to the borrower?
A. On execution of the mortgage deed
B. Within 14 days of the execution of the mortgage deed
C. Before the first mortgage payment is made

Answer 73

C. Before the first mortgage payment is made.

Question 74

If a recommendation is made over the telephone, an illustration must be sent to the customer within:
A. Five business days
B. Seven business days
C. Seven calendar days
D. Five calendar days

Answer 74

A. An illustration must be sent to the customer within five business days,

Question 75

Chen has applied for a further advance on his MCD regulated mortgage. Once he receives an offer from the lender, how long will he have to think about whether to accept it, according to MCOB 6A?
A. No time
B. Five days
C. Seven days

Answer 75

A. No time.
As Chen is applying to vary the terms of an EXISTING MCD regulated mortgage, neither the requirement for a binding offer nor the seven-day reflection period apply.

Question 76

To meet the FCA definition of a home reversion plan, when there is a specified term, this must be for a period from the date of arrangement for at least:
A. 10 years
B. 15 years
C. 20 years
D. 25 years

Answer 76

C. 20 years.
The specified period must be at least 20 years from the date of arrangement.

Question 77

Nick is selling his house and using estate agent Jennifer, solicitor Mark and surveyor Howard. Under the principles of agency, who is deemed the principal in the transaction?
A. Howard
B. Jennifer
C. Mark
D. Nick

Answer 77

D. Nick.
The principals involved in a property sale are the sellers and the buyers.

Question 78

Harry has a regulated mortgage on his new family home. This means that the percentage of the home that is used by Harry and his family must be at least what minimum?
A. 20%
B. 25%
C. 40%
D. 50%

Answer 78

D. 40%.
The MCOB rules are applied to the FCA definition of regulated mortgage products, which require that at least 40% of the land is used, or is intended to be used as, or in conjunction with, a dwelling.