1. Due dilligence

Question 1

Overview of the conveyancing process (freehold property transactions)

Answer 1

1. Pre-contract stage (investigation of title and pre-contract searches)

Seller’s solicitor submits pre-contract package of documents to buyer’s solicitor (incl draft contract and evidence of title)

Buyer’s solicitor carries out searches / enquiries

2. Agree contract - on exchange the buyer pays deposit
3. Pre-completion - checking documentation and ensuring money will be available on completion
4. Post-completion - finalisation of administrative matters, e.g. ensuring any mortgage is paid off and removed from title, paying SDLT

Question 2

What are the seller’s solicitor’s responsibilities pre-exchange?

Answer 2

Drafting the contract

Question 3

What are the buyer’s solicitor’s responsibilities pre-exchange and pre-completion?

Answer 3

Carry out due diligence
Draft the transfer deed

Question 4

When is a contract race legitimate?

Answer 4

Only when the prospective buyers know they are in one

Question 5

What are the key professional conduct issues to be aware of in house purchases?

Answer 5

• Cannot act for buyer and seller - the s 6.2(a) and (b) exceptions DO NOT apply
• Permitted to act for joint buyers but may be necessary to advise on how the equitable interest in held
• Permitted to act for borrower and lender but with restrictions, i.e. only if standard loan terms

Question 6

What is the requirement for first-time buyers SDLT relief?

Answer 6

Price no more than £625,000

Intend to occupy property as main residence

Pay nothing up to £425,000 and 5% on the portion from £425,001 to £625,000

Question 7

What are the SDLT rates?

Answer 7

• Under £250,000 – 0%
• Between £25,000-£925,000 – 5%
• Between £925,000-£1,500,000 – 10%
• The remainder – 12%

Note that the value of the property doesn’t include chattels

Question 8

When must SDLT be paid?

Answer 8

Within 14 days of completion

Question 9

What first-time buyer LTT relief is available in Wales?

Answer 9

None

Question 10

What are the LTT rates?

Answer 10

• Up to and including £225,000 – 0%
• £225,001-£400,000 – 6%
• £400,001-£750,000 – 7.5%
• £750,001-£1,500,000 – 10%
• Over £1,500,000 – 12%

Note that the value of the property doesn’t include chattels

Question 11

When is private residence relief available?

Answer 11

On the sale of an individual’s dwelling house used as their only / main residence

Question 12

What is contained on the property register?

Answer 12

Description of the land / title plan

Freehold / leaseholder

Could also contain easements

Question 13

What is contained on the proprietorship register?

Answer 13

Current owners and their address

Class of title

Question 14

What are the different classes of title?

Answer 14

Absolute title = Vested legal estate subject only to entries on register; can still be bound by overriding interests not on the register

Possessory title = in possession of property but lost deeds / claiming through adverse possession

Qualified title = Specific identified defect which the Registrar feels cannot be overlooked or ‘cured’ by the grant of absolute title

Question 15

What is contained on the charges register?

Answer 15

Incumbrances / burdens on the property

Question 16

What are common examples of easements?

Answer 16

Rights of way
Rights of drainage
Rights of support

Question 17

What is a prescriptive easement?

Answer 17

An easement gained after receiving it for a long period of time

Question 18

What is the rule from Halsall v Brizell regarding positive covenants linked to rights of access?

Answer 18

If the right of access is over someone else’s property and has a covenant to maintain it attached, the buyer is obliged to comply with the positive covenant in order to use the right of access

Question 19

What is the impact of a declaration as to rights of light and air in the charges register?

Answer 19

An agreement of no right to light means that it could never be gained as a prescriptive easement

Question 20

How can you identify how the equitable interest of the property is held?

Answer 20

If tenants in common, specific wording appears on the Proprietorship Register

“RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.”

If this wording isn’t there then can assume joint tenants - and no overreaching required

Question 21

What types of covenant are binding on successors in title?

Answer 21

Restrictive covenants

Question 22

How does a previous owner protect themselves against a successor in title breaching a restrictive covenant?

Answer 22

Through an indemnity covenant in the proprietorship register

Question 23

What is the purpose of an indemnity covenant?

Answer 23

Makes the buyer liable in contract to the seller for breach of a covenant

Question 24

What type of interest is a restrictive covenant?

Answer 24

Equitable interest

Question 25

How can positive covenants be enforced?

Answer 25

Through an indemnity covenant in the proprietorship register

Question 26

What can a seller do to protect themselves against an unknown covenant?

Answer 26

Get indemnity insurance

Question 27

What type of interest is a mortgage?

Answer 27

Legal interest

Question 28

If a lease is over 7 years, what kind of interest is this?

Answer 28

A registrable disposition and binding on the buyer if registered as a notice on the Charges Register

Question 29

How long does a lease have to be in order to be a legal interest?

Answer 29

5 years or more

Question 30

What are notices on the Charges register?

Answer 30

Entries in respect of the burden of an interest affecting a registered estate or charge

Question 31

What is the process for cancelling a notice which has been added to the Charges register by a third party?

Answer 31

1. Apply to Land Registry
2. Land Registry notify third party and they have 15 days to respond
3. Land Registry will then assess the validity of the notice

Question 32

Are home rights an interest in land?

Answer 32

No