Unit 3:7 Buying a Property Legal Aspects Flashcards
1
Q
Professional Indemnity Insurance
A
- protects advisers if clients claim bad advice cost them money
- covers legal costs and compensation payments
- required by FCA for all mortgage advisers
- protects against mistakes, bad advice and negligence
2
Q
Title Investigation
A
- Legal process of checking who owns the property and what rights/restrictions exist
- Confirms seller has legal right to sell and reveals any problems
- Conducted by buyer’s solicitor/conveyancer before exchange
- Includes Land Registry searches, local authority searches, water/drainage checks
3
Q
Defective Title Insurance
A
- Policy protecting against financial loss from property title problems
- One-off premium covering ownership disputes, missing documents
- Allows transactions to proceed despite known title defects
4
Q
Key Searches
A
- Land Registry Search: Examines the registered land information, checking ownership details and charges registered against the property. Property and Proprietorship
- Land Charges Registry Search: Used for unregistered land to discover hidden charges like mortgages or spousal interests
- Local Land Charges Registry Search and Local Authority Enquiries: Reveals property-specific obligations and restrictions, including road changes and town planning schemes that might affect the property
5
Q
Bankruptcy Search
A
- Checks if buyer is currently bankrupt or has bankruptcy restrictions
- Conducted as part of standard conveyancing process
- Protects lenders from lending to those legally restricted from borrowing
6
Q
Common
A
- Checks if property is affected by or benefits from common land rights
- Important for rural properties or those near commons/village greens
7
Q
Puisne Mortgage
A
- second charge mortgage
8
Q
Fixtures and Fittings
A
- Fixtures: items permanently attached to property that transfer with sale (e.g., built-in wardrobes, light fittings, radiators)
- Fittings: removable items not permanently attached that don’t automatically transfer (e.g., curtains, free-standing furniture, appliances)
- Distinguishing between them often causes disputes in property transactions
- Sellers must clearly state what’s included/excluded in the sale
- Documented in TA10 form (Fittings and Contents form) during conveyancing
9
Q
Settling Old Mortgage
A
- The solicitor deals with this payment
10
Q
Mortgage Deed
A
- Formal, binding contract between lender and borrower signed before completion
- Creates lender’s legal security interest in the property
- Must be signed by all borrowers and witnessed
- Solicitor ensures borrowers understand its significance per MCOB rules
11
Q
Post Completion
A
- stamp duty land tax return within14 days of completion and paying the applicable tax
