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SQE 1 > Property Law & Practice > Flashcards

Property Law & Practice Flashcards

1
Q

Who gets together the title documents to the property and what should these include?

A

The sellers solicitor will get together the title documents and send them to the buyers solicitor.

The title documents should include Land Registry official copies of the register, Land Registry title plan and copies of any documents referred to

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2
Q

What is shown on the Proprietorship Register?

A

Class of Title ( Title absolute, qualified, possessory, leasehold)

If title is anything other than absolute, buyers solicitor report it to the client

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3
Q

What is shown on the Property Register?

A
  • Property description
  • Rights BENEFITTING the property
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4
Q

If it is shown that a property has the benefit of a right of way, what four things must be considered?

A
  • Registration of the Burden
  • Adequacy (does the wording cover everything it needs to)
  • Maintenance (even if not mentioned, it will need to be paid)
  • Adoption
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5
Q

What is the wording usually used for a tenant in common restriction on the proprietorship register?

A

No disposition by a sole proprietor

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6
Q

Which register will a mortgage be found on?

A

Charges Register

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7
Q

Which register will covenants be found on?

A

Charges Register

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8
Q

What is the date after which a property if unregistered, must be registered?

A

1st December 1990

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9
Q

Where is title deduced in an unregistered land transaction?

A

Root of title
Requirements
- Adequately describe the extent of the land being conveyed
- Must Be dated more than 15 years ago
- Does not Cast doubt on the sellers title
- Deals with both legal and beneficial title to the property

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10
Q

Which standard searches are always necessary in pre-contract searches?

A

Registered:
Local Search
Chancel Repair
Drainage
Desktop Environmental

Unregistered:
Search of Index Map
central Land Charges

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11
Q

When is a SIM (search index map) necessary?

A

It will inform you whether the neighbouring land is registered or not.
This is relevant and necessary when figuring whether an easement is binding.

If the neighbouring land is unregistered then the easement will continue to bind the neighbouring land whilst it remains unregistered. If the neighbouring land is registered, however, the easement needs to have been registered on the charges register of the neighbouring land’s title in order for it to bind its current owners.

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12
Q

For what kind of covenant breach can you apply to the Upper Tribunal Lands Chamber?

A

Restrictive covenant

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13
Q

What remedy should a buyer seek if there will be a future breach of a covenant?

A

first remedy is restrictive covenant indemnity insurance which the buyer should pay the cost of

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14
Q

What are the formalities for the creation of a lease?

A

Legal lease must be created by deed if the term is over 3 years
A tenancy of 3 years or under may be created in writing or even orally

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15
Q

Is there an implied right for a landlord to increase the rent?

A

No, though an FRI lease of ten years or more will probably include rent review clause

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16
Q

What is the most common type of rent review?

A

Open market rent review

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17
Q

What should happen if the landlord and tenant disagree on the rent review?

A

An independent valuer will determine the new rent by consdiering the rent comparable to other premises nearby and the terms of a hypothetical lease.

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18
Q

When deciding whether the rent should be changed, what assumptions does the independent valuer make?

A
  • The tenant has complied with all their obligations
  • Landlord has complied with all their covenants under the lease
  • if damaged or destroyed parts of the building have been rebuilt
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19
Q

When deciding whether the rent should be changed, what disregards does the independent valuer make?

A
  • Effect of the tenants occupation on the rent
  • Goodwill attached to the tenants business
  • Tenants improvements
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20
Q

Who will be responsible for the repair of the premises (landlord or tenant)?

A

Commercial tenant will almost always be responsible for the repair of their demise.
Though Landlord will be responsible for repairing the common parts and charging a service charge to the tenants

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21
Q

Who is responsible for insuring the premises in a lease?

A

The landlord is almost always be responsible for the insurance of the building.
Insured risks: risks covered by the insurance policy taken out by the landlord and will be excluded from the tenants repariing obligations

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22
Q

Which covenants in the lease if qualified are automatically converted into a fully qualified covenant?

A

Alterations (provided they are from improvements)
Alienation
- Change of use is not converted

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23
Q

What can the tenant do if the lease is silent on alterations?

A

The tenant is free to carry out alterations so long as they do not reduce the value of the premises

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24
Q

Who prepares the draft lease?

A

The landlords solicitor

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25
Q

Who is required to deduce title of freehold in a lease agreement?

A

The Landlord solicitor

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26
Q

Who must investigate title and conduct pre-contract searches and queries in a lease transaction?

A

the tenant solicitor

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27
Q

What pre-contract and pre-completion searches should the tenants solicitor carry out in a leasehold transaction?

A

Pre-contract: CPSE 1 and CPSE 3
Pre- completion: OS1 (lease of whole), OS2 (lease of part) or OS3 (if lease is not registrable)

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28
Q

When is an agreement for a lease required?

A

usually not required but if parties want to commit to the lease but are not ready to yet or conditions have not yet been fulfilled, then they should draw up an agreement for lease

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29
Q

Who arranges the SDLT return after completion of a leasehold?

A

The tenants solicitor, they should register the lease if necessary

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30
Q

What was the tenants liability on covenants in leases before 1 January 1996?

A

Original tenant remained liable to the landlord for covenants under the concept of privity of contract.
The obligations would not pass on assignment to the new tenant therefore the new tenant had to covenant directly with the landlord to observe all the covenants

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31
Q

What is the tenants liability on covenants in leases granted after 1 January 1996?

A

When a new lease is assigned, the original tenant is released from liability and all of the tenants covenants are passed to the new tenant.
The original tenant can enter into an AGA with the landlord to guarantee the obligations of the new tenant

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32
Q

Who needs to deduce title in the assignment of a lease?

A

The tenant solicitor deduces title by providing official copies of the leasehold title, if not registered, then copies of the landlords title

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33
Q

Who should raise pre-contract searches and enquiries and which ones should be raised in an assignment of a lease?

A

The Assignees solicitor should raise the pre-contract searches and enquiries.
They should raise CPSE 1 and CPSE 4 enquiries

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34
Q

When must the tenant solicitor apply to the landlord for consent for assignment?

A

Should apply early on in the transaction for the landlords consent, the landlord should respond within 28 days of the request

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35
Q

Who is most likely to be party to the draft lease for an assignment of lease?

A

The tenant and the assignee (usually not the landlord)

36
Q

What should all parties prepare pre-completion of assignment of a lease?

A

Tenant solicitor: Completion statement for the assignee (apportioning of rent)
Landlord will prepare the license to assign in triplicate
Assignee will draft the deed of assignment (TR1 if it is a registered lease)

37
Q

What should all parties do on completion of the assignment of a lease?

A

Tenant solicitor and assignee solicitor agree over the phone to complete and date the deed of assignment
Assignee solicitor sends the tenant solicitor the completion monies
All parties agree to complete and date the license to assign

38
Q

What steps must be taken post-completion of an assignment?

A

Must send formal notice to the landlord of the assignment
must register the assignment
must arrange to submit the SDLT

39
Q

When would it considered reasonable for the landlord to refuse consent to the assigning of a lease?

A
  • questions about the ability of the assignee to pay rent (newly incorporated)
  • use of the property does not fit with the property type
  • cannot refuse for personal dislike
40
Q

What are common provisions in a license to assign or underlet?

A

Consent for limited time and for limited transaction
Tenant agree to pay landlords costs
Assignee or underletter agrees to covenant directly with the landlord to observe lease obligations
The draft license to underlet will have the draft underlease attached

41
Q

Who drafts the licesne to assign or underlet?

A

Landlords Solicitor

42
Q

What is the remedy of action in debt?

A

Landlord can issue court proceedings to recover a debt.
Limited to rent due in the six years before issue

43
Q

What is the remedy of forfeiture arise?

A

Allows the landlord to re-enter the premises and take them back from the tenant
For non-payment of rent, the landlord is entitled to forfeiture as long as the lease allows (any other breach and the landlord must serve a s146)

44
Q

When may commercial rent arrears recovery be available?

A

Where the premises are purely commercial
Minimum of seven days principal rent is owed
Lease has not been forfeited

45
Q

How is Commercial rent arrears recovery carried out?

A
  • landlord must appoint an enforcement agent
  • Seven clear days notice of intention to enter the premises
  • Landlord must serve another seven days notice if they are to sell the seized goods
46
Q

What can you get back from commercial rent arrears recovery?

A

Rent, interest, VAT
CANNOT get back insurance or service charge

47
Q

What possible remedies are available for the landlord for repairing breaches by the tenant?

A

Damages (though limited to reduction of the value of landlords reversion)
Self help Jervis clause ( gives the landlord the right to enter the property and carry out repairs and carry out the full cost of doing so from the tenant)

48
Q

What are the four methods of terminating a lease?

A
  • Effluxion of time
  • notice to quit
  • surrender
  • merger
49
Q

When does the Landlord and Tenant Act 1954 apply for business tenancies?

A

When there is a fixed term or periodic tenancy (must be more than six months)
Occupied by the tenant
For the purposes of business ( does not include sunday school or taking lodgers)

50
Q

How can the Landlord and Tenant agree to not have security of tenure from the 1954 Act?

A

Contracting Out
o Landlord MUST serve a warning notice on the tenant in a prescribed form
 Must be served before the parties complete the lease
o Tenant must provide a DECLARATION in prescribed form to the landlord before completing the lease
 If lease completion is at least 14 days from the date of the warning notice, then this can be a simple signed declaration
 If lease is less than 14 days away, then the tenant must provide a statutory declaration (signed before an independent solicitor)

51
Q

What is the process for a tenant to renew their lease?

A

s26 notice
- tenant must have a lease which granted a term of more than one year
- minimum notice period of six months and maximum of 12 months
- notice expires on the date of commencement of the new lease
- Landlord has two months from the notice to serve a counter-notice

52
Q

How does the landlord terminate the lease of a protected tenant?

A

s25 (hostile) notice (cannot be served if the tenant has served a s26/27 notice)
Notice period is 6-12 months before the termination date
Landlord can apply to court to terminate the lease

53
Q

What are the landlords grounds for opposition to a renewal of a lease?

A

-persisitent and serious breach by the tenant of a repairing obligation
- perisitent delay of the tenant in paying rent
- serious and persistent other breaches by the tenant
- landlord offers suitable alternative accomadation
- landlord intends to demolish or reconstruct the premises
- landlord intends to occupy for himself

54
Q

Which grounds for the landlord to terminate a lease under s25 are mandatory for the court to grant and which are compensatory?

A
  • landlord offers suitable alternative accommodation
  • landlord intends to demolish or reconstruct the premises (compensatory)
  • landlord intends to occupy for himself, owned reversion for at least 5 years before date of termination (compensatory)
55
Q

When is planning permission needed (and exceptions)?

A

Whenever there is development on land unless it falls into one of the exceptions
- building work which only affects the interior of the ubilding
- building work which does not materially affect the external appearance of the building
- changes of use which are within the same use class

56
Q

When are building regulations required?

A
  • erection or extension of a building
  • extensions or installations of a service or fitting
  • work required where there is a material change of the whole use of the buildign
57
Q

Are small extensions to a dwelling house considered development in need of planning permission?

A

NO

58
Q

When must enforcement action be taken on any breaches of planning permission?

A

Within four years from the date the works were completed
Within 10 years for other breaches

59
Q

What enforcement powers does the local authority have for breaches of planning?

A

LA has six months from breach to impose a fine
LA can ask landowner to remove the work, or the LA can do it after 28 days and claim back expenses

60
Q

When must a landlord respond to a request for alienation?

A

Within 28 days

61
Q

What does a local authority search entail?

A

Covers all matters relating to property within the knowledge of the local authority
Local Land Charges Search (LLC1)
Standard enquiries (CON29)
Optional Enquiries (CON290)

62
Q

Who must make the pre-contract searches and raise enquiries?

A

Buyers solicitor making searches and raising enquiries with the sellers solicitors

63
Q

What enquiries can be raised under the CPSE?

A

CPSE 1 (covers all commercial freehold transactions)
CPSE 2 (where the property sold is subject to existing tenancies)
CPSE 3 (where a lease of a property is being granted)
CPSE 4 (where the property being sold is leasehold

64
Q

What are the formalities for the property contract? And why do we need a contract?

A

Be in writing
Incorporate all the agreed terms
By singed by each party to the contract

  • It may be used to fix a completion date or certain conditions
65
Q

The standard conditions of sale and the standard commercial property conditions are incorporated into which types of contract?

A

Standard Conditions of Sale: Residential

Standard commercial property conditions: Commercial

66
Q

When may the sellers solicitor add special conditions to the contract?

A

Only when it is absolutely necessary

67
Q

If the parties do not fix a completion date, then what do the SCS and SCPC specify as the time limit for date of completion and what time of day?

A

20 working days after the date of the contract
2pm

68
Q

What does it mean when the sellers solicitor holds the deposit as a stakeholder or as agent?

A

Stakeholder: keeps the deposit safe and not pay it to the seller until completion
Agent: Seller may demand the deposit after exchange
SCS and SCPC allow for the deposit to be held as stakeholder

69
Q

What is the basis of VAT in residential property and in commercial property?

A

Residential property is exempt supply or zero rated supply meaning that buyer do not pay VAT

Commercial property: default position under SCPC is that the property is standard rated supply meaning VAT is payable at the normal rate above the purchase price
- Exception: if the property is over three years old and seller has made an option not to tax, no VAT to pay

70
Q

What happens to the risk when contracts are exchanged?

A

Risk moves from the seller to the buyer

71
Q

Who drafts the transfer deed for pre-completion in a freehold transaction?

A

Buyers solicitor

72
Q

What form must the transfer form be in? Registered and Unregistered Land

A

Transfer of land must be in the form of a deed

Registered: TR1 (whole of a freehold or leasehold title)
TP1 (transfer of part only of the registered title)
TR5 (transfer of a portfolio of registered titles)

Unregistered: can use the TR1 or conveyance

73
Q

Who must execute the TR1?

A

The transferor (seller)

74
Q

How is a TR1 form executed by an individual and by a company?

A

Individual: signs the transfer form in the presence of a witness who also signs. Transfer is considered delivered when it is dated

Company: with or without company seal (two directors or one director and company secretary)

75
Q

What is the purpose of buyer making pre-completion searches?

A

Check and protect the buyers ability to obtain title to the property

76
Q

What pre-completion searches should be carried out in respect of registered and unregistered land?

A

Registered Land: Search with priority (OS1 or OS2) at the Land Registry, gives a 30 working days priority period

Unregistered land: Land charges search of the land registry (K15), giving priority period of 15 days

77
Q

What is the overview of how completion works and the roles of both the buyers and sellers solicitors?

A

Buyers solicitor has received the money from the client and the bank (mortgage) and sends this over to the sellers solicitor
Sellers solicitor dates the transfer deed once they receive the money
Buyers solicitor tells client they can collect keys and move in

78
Q

Who organises the SDLT and LTT tax return?

A

Buyers solicitor

79
Q

When must the SDLT and LTT returns be made after completion?

A

SDLT: within 14 days of completion
LTT: within 30 days of completion

80
Q

How much interest must the buyer and seller pay if they fail to complete on time specified in the contract?

A

They must pay interest for each day delay
- buyer pays interest on purchase price less the deposit
- seller pays interest on full purchase price

81
Q

What remedy is immediately available to the non-defaulting party for failure to complete?

A

Interest and Common Law Damages

82
Q

Is rescission available to a non-defaulting party for failure to complete?

A

No as time is not of the essence, serving a notice to complete makes time of the essence and both parties may rescind the contract if they fail to then complete

83
Q

What is the effect of serving a notice to complete?

A

The parties must complete within 10 working days (first day being the day AFTER the notice was served)

84
Q

What is SDLT payable on?

A

Purchase price including VAT

85
Q

What is a certificate of title?

A

Certifies that the title of the property is satisfactory for lending purposes

SQE 1 (12 decks)

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