Property Practice - Key Concepts and Stages of the Transaction

Question 1

Key Questions

Answer 1

1. Title: registered or unregistered?
2. Estate: freehold or leasehold?
3. Client: selling or buying or both?
4. Transaction: residential or commercial?
5. Stage of transaction?

Question 2

Unregistered Title

Answer 2

• Documentary evidence
• Epitome of title

Question 3

Registered Title

Answer 3

Has its own title number

Registers of title:

• Property Register
• Proprietorship Register
• Charges Register

Question 4

Legal Estates

Answer 4

Freehold: unlimited duration

Leasehold: limited duration

Question 5

Selling or buying?

Answer 5

Usually both

Related transactions: client is buying and selling property on the same day

Synchronising transactions: process of assuring that the purchase and sale happen on the same day

Question 6

Residential or commercial?

Answer 6

Can both be freehold or leasehold transactions

Look out for wording in the exam that client is buying/selling a ‘house’ or refers to items typically found in a home this transaction will be residential

Biggest giveaway will be the type of property in the question

Question 7

Stages of the transaction

Answer 7

1. Pre-market
2. Pre-contract
3. Exchange of contracts
4. Pre-completion
5. Completion
6. Post-completion

Question 7

Pre-market

Answer 7

Short stage in the process

Involves steps which need to be taken by a seller before they put the property on the market

Question 8

Pre-contract

Answer 8

Takes clients from agreeing the sale to exchange of contracts

No binding commitment between seller and buyer at before the exchange of contracts stage

Tasks:

• Seller’s solicitor prepares contract package
• Buyer’s solicitor investigates seller’s title, conducts searches against property, raises enquiries, establishes buyer’s funding

Likely to take 4-6 weeks of an 8-10 week timeframe

Question 9

Exchange of Contracts

Answer 9

Transaction becomes legally binding

10% of deposit is payable on exchange of contracts

Question 10

Pre-Completion

Answer 10

Typically two weeks between exchange and completion but can happen on the same day

Solicitor makes arrangement for balance of purchase price to be sent to seller’s solicitor

Solicitor carries out searches to avoid surprise third-party interests

Question 11

Completion

Answer 11

When seller moves out and buyer moves in

Buyer’s solicitor will send 90% balance of purchase money to seller’s solicitor’s client account

Once funds received keys to property will be released to buyer

Question 12

Post-Completion

Answer 12

Seller’s solicitor must pay off seller’s mortgage

Buyer’s solicitor must pay any stamp duty land tax due within 14 days of completion and must submit application to register buyer’s title with HMLR