Property Practice - Starting the Conveyancing Transaction

Question 1

Energy Performance Certificate

Answer 1

Details of property’s energy efficiency

Valid for 10 years

Not needed for listed buildings

Required for both residential and commercial properties

If new EPC needed it should be ordered before the property is marketed

Question 2

Stage 1 (Pre-Market) - Commercial

Answer 2

Assignment of existing lease: landlord’s consent to assign often required (Licence to Assign contains landlord’s consent) - outgoing tenant’s solicitor gives undertaking to landlord’s solicitor to meet fees of preparing Licence to Assign

Extra Security for Landlord:

• Rent deposit: extra sum on completion in addition to first rental payment
• Guarantor
• Authorised Guarantee Agreement: outgoing tenant enters into a written obligation to act as guarantor for their immediate successor in title

Question 3

Obtain Seller’s Title

Answer 3

If registered: download via HMLR

If unregistered: locate title deeds (may need to give undertaking to lender not to part with deeds until mortgage is redeemed out of the sale proceeds on completion), review epitome of title and make sure seller has good root of title

Seller’s solicitor will send a copy of the title to the buyer’s solicitor (‘deducing title’)

Question 4

Seller’s Duty of Disclosure in Contract

Answer 4

Matters seller is obliged to include:

• **Latent ** defects/encumbrances - those which would not be apparent from inspection (e.g. underground easement for a pipeline or restrictive covenant)
• Need not disclose patent defects/encumbrances - those which are discoverable from inspection (e.g. road running across the property to reach another property)

Only applies to the contract

If duty breached the buyer may have the right to withdraw from the contract after exchange and claim damages

If a seller tries to cover up a patent defect this will amount to wilful deceit and they could be sued in tort

Question 5

Exception to Duty of Disclosure

Answer 5

Duty of disclosure does not extend to physical defects due to doctrine of caveat emptor (buyer beware)

This is why the buyer should have a survey carried out

Question 6

• Property Information Form and Fittings and Contents Form
• Enquiries from Buyer’s Solicitor

Answer 6

If seller makes any misrepresentation on forms or fails to answer buyer’s solicitor’s questions fully they may be liable

Question 7

Contract Package

Answer 7

In relation to residential freehold transaction this will contain:

• Draft contract in duplicate
• Property Information Form
• Fittings and Contents Form
• Copy of seller’s title and title plan
• Other relevant documents

In relation to a new leasehold transaction the contract should include:

• Draft lease annexed to it
• Landlord’s freehold title
• Any relevant planning permission
• Service charge budget
• Details of any management company
• New-build warranty (if property less than 10 years old)

Existing leasehold transaction:

• Copy of outgoing tenant’s leasehold title
• Existing lease itself
• Leasehold information form
• Last 3 year’s service charge accounts
• Landlord’s freehold title

Question 8

Memorandum of Sale

Answer 8

Sent out by estate agent to all parties detailing the property, the price agreed and the solicitors being used

Equivalent in commercial transactions is the heads of terms

Question 9

Landlord’s consent to assignment

Answer 9

Buyer has right to rescind if this is required and not received by three working days before completion