Unit 4 Flashcards
What are the requirements for the transfer deed?
Transfer deed formalities:
S 52 LPA 1925 = the transfer of a legal estate in land must be by deed.
To be valid in law, a deed must:
- Make it clear that it is a deed.
- Be signed by the parties.
- Be delivered.
It is not compulsory to have the deed sealed.
What forms are used for the transfer?
Land Registry TR1 = the deed used to transfer the whole of registered freehold title.
Land Registry TP1 = deed used to transfer part of a registered freehold.
Unregistered = If the land is unregistered, it will be subject to compulsory first registration.
What are the formalities for a private individual to execute a transfer deed?
signature must be witnessed by an independent witness, to counter any potential allegation of undue influence.
How can a company execute a deed?
A company may execute a deed in one of three ways:
- Using the company seal in accordance with the articles of association
- Having it signed by a director and the secretary, or by two directors of the company, provided that the deed is expressed to be executed by the company
- Having it signed by a single director in the presence of a witness who then attests that signature.
Who executes the transfer deed?
- The seller always execute the transfer deed to transfer the land;
- The buyer will only execute the deed if they are entering into an obligation or making a declaration of trust in the TR1 (transfer form), like giving an indemnity covenant or declaring a beneficial interest under a trust.
- Where the buyers will be co-owners, a declaration of trust is needed (so buyers need to sign this).
- Transfer deed must reflect the terms of the contract and the title deeds
When is the deed presumed delievered?
- Presumption of delivery = A document which makes it clear on the face of it that it is a deed is presumed to have been delivered on execution.
- This presumption can be rebutted by contrary intention – e.g., the client has signed the transfer but does not wish it to come into force yet, solicitor needs to expressly state this in covering letter when sending deed.
When is the deed dated?
On completion.
How should the purchase price be stated?
In figures as well as words. For commercial properties, should include VAT
For registered land, why is Form OS1 done?
to see if any new entries have been made since the official copies were produced and provides the buyer with a priority period.
What is a prioirty period?
Provides protection to the applicant against any subsequent entries which may be placed on the register after the date of the pre-completion search but also before the buyer is registered as proprietor.
- Buyer takes the property free from any entries, provided they submit their application for registration by 12 noon on the last day of the priority period.
Prioirty period for OS1 = 30 working days.
If the buyer is buying with a mortgage, whose name should form OS1 be in?
- If buyer is buying with a mortgage, the application for a Land Registry search should be in the name of the lender and not the buyer, even where the lender is separately represented.
- This allows the results to confer priority on both buyer and lender (since mortgage is deemed to take place slightly after the purchase by the buyer)
- Important note – A search made solely on behalf of the buyer will not protect the lender.
For unregistered land, why is form K15 search done?
to see if any new entries have been made since the official copies were produced and provides the buyer with a priority period.
What is the prioirty period for K15?
15 working days from the date of the result, during which time the searcher will take free of any entries made on the register between the date of the search and the date of completion, provided that completion takes place during the 15 working day period.
What search has no prioirty period?
Company search – Should be completed as close as possible to the day of compeltion.
What is form TA13?
Asks the seller to confirm important information relevant to completion, including:
- Arrangements for handing over the keys
- The place, method of completion
- Documents to be handed over at completion
- Exact amount payable by the buyer on completion.
- Discharging mortgages – form contains the undertaking the seller’s solicitor gives to redeem the mortgage out of the completion money on completion.
– Buyer’s solicitor asks seller’s solicitor to send evidence of discharge of any outstanding mortgage.
If a buyer is financing purchase with the aid of a mortgage, what must a lender receive before releasing the mortgage advance?
- A certificate of title to confirm that the property is adequate security for the loan being advanced
- A solvency search against the borrowers
- A clear OS1R in the name of the lender
- An executed but not completed mortgage deed.
On receipt of the money for the purchase, what does the seller’s solicitor do?
- On receipt of the money, seller’s solicitor completes the transaction by dating the TR1 form.
– Once this has been done, the lender’s solicitor (where applicable) will date the mortgage deed.
Note – lenders solicitor cannot date the mortgage deed until after TR1 has been dated.
What are the key features of completion by post?
- Seller’s solicitor acts as the agent of the buyer’s solicitor for the purpose of carrying out the completion procedure.
- Important for the buyer’s solicitor to set out in writing precisely what the seller’s solicitor is to do on their behalf.
- The documents which would have been handed over to the buyer’s solicitor are instead sent by first-class post or document exchange.
- Seller’s solicitor gives an implied undertaking to carry out the buyer’s solicitor’s instructions. (This can be enforced through the courts).
When does legal title pass to the buyer?
- Registered land
– Legal title does not pass to the buyer until the buyer is registered at the Land Registry as proprietor of the land.
- Unregistered land
– Legal title passes to the buyer on completion.
How to discharge a seller’s mortgage?
- Once the lender has received the amount required to redeem the mortgage from the seller’s solicitor, they will either:
Complete land registry form DS1 and send it to the seller’s solicitor for onward transmission to the buyer’s solicitor; or
Submit an e-DS1 electronic discharge through the Land Registry portal; or
Use the Electronic Discharge (ED) system, sending an electronic message to the Land Registry which automatically removes the charge from the register.
What are the requirements for registration of a new charge at companies house?
If buyer is a company and is purchasing with the aid of mortgage, the lender’s solicitor needs to:
– register the charge at Companies House within 21 days (from completion) to ensure constructive notice of it is given to other creditors of the company.
- Time limit cannot be extended.
- Failure to register results in the charge being void against a liquidator or administrator of the borrower and the borrower’s other creditors (prejudicing the lender’s security).
What is form AP1? (registered land)
Land Registry form AP1 = application to have the buyer registered as the registered proprietor of the Land (and the lender registered as the registered proprietor of the charge).
When should AP1 be carried out? (registered land)
Timing = application must be made before the expiry of the priority period of the OS1 search which was carried out prior to completion.
KEY NOTE – Failure to register within the priority period means the buyer and lender loses the benefit of the priority period and would take subject to matters registered during that period.
What is form FRi (unregistered land)?
Form FR1 = An application for first registration of title must be made within two months of completion of the transaction.
Form DL = Documents accompanying the application need to be listed in duplicate on form DL (one copy is sent back to solicitor).
