1. Introduction to Freehold Transactions (inc. basic TinC vs JT)

Question 1

WHEN ACTING FOR BUYER, must consider…
* Seller’s r____ to s___
* P_______ c________ suits client’s needs and is worth the price
* R_____ b__________ the property
* 3rd p____ r_____ affecting property
* Property free from s_______ or m_______ interests on completion
* C_______ mirrors a_____ t____
*Sufficient f____ available for the purchase

Answer 1

• Seller’s right to sell
• Physical condition suits client’s needs and is worth the price
• Rights enjoyed by the property
• 3rd party right affecting property
• Property free from security or mortgage interests on completion
• Contract mirrors agreed terms
  *Sufficient funds available

Question 2

3 additional aims of a Lender in a F/H transaction are…
1. Check property is m_________ AND v____ is sufficient to cover loss if payments not maintained,
2. No discrepancies in understanding of t__________ and b_______’s c____________
3. Mortgage deed is v____ and e__________

Answer 2

1. Check property is marketable AND value is sufficient to cover loss if payments not maintained,
2. No discrepancies in understanding of transaction and borrower’s circumstances
3. Mortgage deed is valid and enforceable

Question 3

WHEN ACTING FOR SELLER, must consider…
*C_______ mirrors a_____ t____
*Provide b_____’s sols with info they need
*Tie timing of sale to any r______ p_______
*Transfer l____ o________ to buyer
*Receive s___ p_______, redeem m_______ (where relevant) and account to s_____ for b______

Answer 3

*Contract mirrors agreed terms
*Provide buyer’s sols with info they need
*Tie timing of sale to any related purchase
*Transfer legal ownership to buyer
*Receive sale proceeds, redeem mortgage (where relevant) and account to seller for balance

Question 4

5 Stages of a transaction are:

Answer 4

1. Pre-exchange
2. Exchange
3. Pre-completion
4. Completion
5. Post-completion

Question 5

What passes to the Buyer on exchange of contracts?

Answer 5

the beneficial interest/risk

Question 6

How many equitable owners are allowed for one property/title?

Answer 6

No limit!

Question 7

What is the maximum number of legal owners allowed on a title?

Answer 7

4 legal owners

Question 8

How can the legal title be held?

Answer 8

Sole owner OR Joint Tenants

Question 9

Can the legal title be held as a TinC?

Answer 9

No

Question 10

How can the equitable title be held?

Answer 10

JT or TinC or sole ownership

Question 11

A Tenancy in Common only refer to what type of title/interest?

Answer 11

Equitable/beneficial

Question 12

If resi clients are contemplating mortgage fraud and you also act for their lender, can you disclose this to the lender?

Answer 12

No, your duty of confidentiality to your clients overrides your duty to disclose to the lender. You would need to advise the lender that you can not longer act for them for professional reasons.

Question 13

Notifying your client’s lender that the sale price is lower than the lender was told would constitute a breach of what?

Answer 13

Confidentiality.

Question 14

When is a buyer recognised as the legal owner of registered property?

Answer 14

Upon registration at the LR.

Question 15

When is the buyer recognised as the legal owner of unregistered property?

Answer 15

Upon completion (and the buyer’s sols would need to register within 2 months or the legal title reverts to the seller).

Question 16

According to the SCS, incorporated into a sale contract, does the buyer need to prove detrimental reliance/inducement for misrepresentation?

Answer 16

NO - looks more at the difference in value due to the misrep.

Question 17

In accordance with the principle of caveat emptor a buyer must identify any issues before what?

Answer 17

Exchange of contracts

Question 18

CGT may be payable by whom?

Answer 18

The seller (for profits on a sale e.g. second homes)

Question 19

When taking instructions, you must carry out _ _ checks and check you have a________ to a__.

Answer 19

ID checks AND checking authority to act

Question 20

When acting for a company, check you have a_______ to a__ and that the company has been correctly i___________.

Answer 20

Authority to act and correctly incorporated

Question 21

Which type of survey is appropriate for most homes up to around 100 years old?

Answer 21

Homebuyer

Question 22

Which type of survey would be most appropriate for older homes and those with past or proposed alterations?

Answer 22

Full structural survey

Question 23

When might a basic valuation be sufficient?

Answer 23

For a lender just wanted to check the value of the property so that it will be worth sufficiently more than its security. Not really useful for a buyer.

Question 24

What age limits apply to legal and equitable owners?

Answer 24

Legal = over 18
Equitable = ANY

Question 25

A beneficial JT would best suit who? Who would it not suit?

Answer 25

Would suit stable couples.
Wouldn’t suit business relationships or co-owners who want to pass their share through their Will to another.

Question 26

An equitable TinC would suit who?

Answer 26

• Co-owners who want to leave a share to another in Will
• Or who contributed unequal shares
  =Or who have a business relationship

Question 27

Who might incur VAT on a purchase and who accounts to HMRC.

Answer 27

A BUYER may incur VAT but the SELLER accounts to VAT.