Chapter 1: Freehold Transactions Flashcards

Question

3.1 Caveat emptor

Answer 1

We are used to feeling confident in buying clothes, electronic equipment, etc, knowing that we can return such items if they are faulty, or often even if we change our mind. This does not apply to real property (land). The principle of caveat emptor means that, in general, a buyer takes the property as they find it. They cannot return the property if it turns out to be unsuitable in some way.

Answer 2

The seller is generally under no obligation to give the buyer all the relevant information that the buyer may require. It is the buyer’s solicitor’s job to investigate as thoroughly as possible and report to the buyer.If the buyer is not happy with the report, then the buyer may want to renegotiate the price or even withdraw from the transaction. They can do this at any point up to exchange. After exchange, however, they cannot withdraw because they subsequently find a problem with the property.

Answer 3

The buyer’s solicitor can find out about problems with the property by investigating title and raising pre-contract searches and enquiries. Information about the property will come from: (a) The title to the property: The Land Registry official copies (if registered) or the deeds (if not). (b) The seller’s replies to enquiries: (whether standard enquiries or the buyer’s solicitor’s own specific enquiries).

Answer 4

(c) Searches: (requests for information) from various bodies such as the local authority, the Land Registry and statutory undertakers (eg, water and drainage supply companies). (d) A survey of the property: The surveyor will inspect the property and report on value, structural defects and necessary repairs. Unlike a solicitor, their concern is primarily with the physical condition of the property.

Answer 5

(d) A survey of the property: However, they may find issues that suggest legal issues, and will recommend furthe investigation by the solicitor. For example, if they were to find evidence of somebody walking across the land (such as trodden down grass), the solicitor may need to look into the possibility of a right of way

Answer 6

Caveat emptor does not completely absolve a seller from responsibility. There are two exceptions to the principle of caveat emptor: (a) Misrepresentation (b) Latent encumbrances and defects in title

Answer 7

Misrepresentation: This is a false statement which induces a buyer to enter into a contract to buy

Answer 8

* estate agents’ particulars of sale or auction particulars * remarks made by the seller on viewing the property * any communication from the seller or the seller’s solicitors to the buyer

Answer 9

* Stating in written replies to enquiries that there have been no neighbour disputes when both are untrue * Overstating the floor area of a building * Stating that there have been no objections to a particular use of the property when there have been

Answer 10

The seller cannot mislead the buyer by concealing physical defects (such as painting over damp patches) or answering questions dishonestly. If the buyer has been induced by such conduct or statement to enter into the contract, then they have remedies in common law for misdescription, or under the Misrepresentation Act 1967.

Answer 11

In practice, they will probably rely on the sale contract. The standard conditions of sale (incorporated into the majority of land contracts) do not require the buyer to prove that they were induced to rely on the conduct or statement: it is sufficient to prove that there was an error or omission.

Answer 12

A seller must disclose latent incumbrances and/or any defects in title. Latent encumbrance: This means something which is not apparent, or cannot be discovered, when inspecting the property. A seller is under a duty to disclose latent incumbrances of which it is aware or of which it has the means to know, acting reasonably and diligently. It is difficult though to be confident whether an incumbrance is latent or readily discoverable on inspection and so if in doubt it is safest for a seller to disclose the incumbrance.

Answer 13

This means something that brings into question the seller’s ownership of the property, or the rights and burdens that affect the property. Typically such defects are a result of missing title deeds, for example if a deed contacting a restrictive covenant has been lost it is unknown how the buyer’s use of the property might be restricted.

Answer 14

This case illustrates the importance of a buyer fully investigating the property before becoming contractually bound to the purchase.

Answer 15

Facts: In March 2011, Mr and Mrs Hardy exchanged contracts for the purchase of a property for £3.6 million from Mr and Mrs Griffiths. They paid £150,000 deposit on exchange, with the contract stating that it would need to be topped up to £360,000 (10%) if the Hardys didn’t complete on the agreed completion date. The Hardys refused to complete and sought return of their deposit on the basis of ‘reckless misrepresentation’. They alleged that the Griffithses had misrepresented the condition of the property in not revealing rising damp and dry rot that would cost £600,000 to rectify

Answer 16

Held: the buyers had to pay the balance of the full 10% deposit as they had failed to complete. The court applied the principle of caveat emptor. There was no onus on the sellers to disclose any physical defects. It was for the buyer to discover them. In this case, the buyers did not commission a professional, structural survey prior to exchange and therefore failed to discover the problems with dry rot and damp.

Answer 17

As to misrepresentation, in the replies to pre-contract enquiries the seller had stated that they were not aware of any issues relating to rot or rising damp and the court found that this was a true answer. In any event, there was no evidence to suggest that the buyers had even read the replies. If not, they could not have relied on them and reliance is an essential part of any claim in misrepresentation

Answer 18

Up until the point at which contracts are exchanged, the buyer can walk away from the deal without any legal liability. There is no legal right to recover any costs from the other party. Alternatively, the buyer and the seller may negotiate the price, or agree that the seller take steps to remedy the problem before completion. This could be a condition of the sale contract.

Answer 19

* Caveat emptor translates to ‘buyer beware’. * The principle means the buyer takes the property as it finds it. * There is no onus on the seller to disclose patent incumbrances or physical defects in the property, it is up to the buyer to fully investigate them.

Answer 20

* Therefore, before becoming contractually committed, the buyer will find out as much as possible about the property. It will do this by investigating title, ordering searches and raising pre-contract enquiries. The buyer should also arrange for a surveyor to undertake a physical survey. * The seller is however obliged to disclose latent incumbrances and defects in title. * Sellers should also be wary of making any potential misrepresentations.

Answer 21

When taking instructions from a client, a solicitor may need to address the following: * Likely timescale and costs * Co-ownership * Surveys * Tax

Answer 22

When a client instructs a solicitor, the solicitor should discuss the likely timescale and costs. It can be difficult to predict how long the transaction will take, as it will depend on what issues arise, and also on how quickly the other parties’ solicitors deal with their parts of the transaction. To give an idea, the average residential sale may take around six to eight weeks from the sale being agreed to completion.

Answer 23

Some large value commercial matters are on a tight timescale, and may require exchange within, say, two weeks, completion within four weeks. The buyer’s solicitor in such a case may need to prioritise this matter above all others on their desk to achieve this! The costs may be fixed (particularly with residential matters) or on a time basis, in which case the solicitor would need to provide an estimate (possibly a range).

Answer 24

Co-ownership means having two or more owners. This is more common in residential transactions, particularly if a couple is buying a home. Both legal title and beneficial title (also known as the equitable title) may need to be considered with the clients from the outset of a transaction.

Answer 25

* The legal owners are named on the Land Registrytitle * There is a maximum number of four legal owners * They must be over 18 * Legal ownership can only be sole or a joint tenancy * The legal owners hold the property on trust for the benefit of the beneficial owners.

Answer 26

* The beneficial owners may or may not be the same as the legal owners * They are not registered at the Land Registry (unless as legal owners) * There is no maximum number of beneficial owners * They can be any age * Beneficial ownership can be sole, a joint tenancy or a tenancy in common

Answer 27

Two siblings (aged 16 and 19) want to buy a house together using their shares of an inheritance. The older sibling can appear on the legal title, but not the younger. The older sibling will hold the legal title on trust for both of them. (Or, ideally, a second person, perhaps another adult member of the family, will act as a second trustee and will go on the legal title as well.) The beneficial title, however, is held as tenants in common by both of them. When the younger sibling reaches 18 they too can go on the legal title.

Answer 28

A beneficial joint tenancy may be suitable for a married couple, civil partnership or cohabitees in a stable relationship. It is not suitable for a co-owner who wants to pass a share of the property in their will. It is generally not suitable for business relationships. Beneficial joint tenants collectively own the whole of the beneficial estate with each other. They are seen as a single entity

Answer 29

The right of survivorship applies - if any co-owner dies, then the surviving co-owners hold the property between them. The deceased co-owner cannot pass an interest by their will or intestacy.

Answer 30

Beneficial ownership as tenants in common is suitable where co-owners wish to have an interest to leave in their will, or have contributed unequal proportions to the purchase price, or where it is a business relationship.

Answer 31

Purchasers own their own undivided share in the property and can share the property in whatever proportions they choose (documented in a trust deed). For example, three people might want to buy a flat together. They can agree to own it in shares of say 40%, 35%, 25%. The right of survivorship does not apply. The share will pass under a will or intestacy rules if the co-owner dies.

Answer 32

It is important to get clear instructions from your client on co-ownership and carry them out. Failing to do so is a common area of professional negligence. A declaration of trust of land must be in writing and signed by the declarant(s) (Law of Property Act 1925, s 53(1)(b)). The standard Land Registry form transfer deed (most commonly TR1) provides a panel to include a declaration of trust with the following options:

Answer 33

10 Declaration of trust. The transferee is more than one person and [ ] they are to hold the property on trust for themselves as joint tenants [ ] they are to hold the property on trust for themselves as tenants in common in equal shares [ ] they are to hold the property on trust: [blank space to be completed with details of the trust]

Answer 34

The buyer should select the correct option. The first two options are self-explanatory. The third option can be used with suitable wording added in the blank space provided to show that the property is held on trust for beneficiaries (who may be parties other than the legal owners) in unequal shares, and could set out the shares or refer to a separate declaration of trust. Note. The third option is also used for express trusts that go beyond simple co-ownership including lifetime and will trusts.

Answer 35

A buyer should always be advised to instruct a surveyor to undertake a physical survey of the property in order to identify if there are any physical defects with the property (remember that caveat emptor applies).

Answer 36

Physical defects with the property can be expensive to put right, affecting the value of the property. Identifying these defects gives the buyer the opportunity to renegotiate the price, require a contribution from the seller or failing that, withdraw before exchange. If the physical defects are potentially serious, the lender may refuse to lend until they are put right, meaning that the buyer cannot proceed even if they want to.

Answer 37

If a mortgage is being obtained, then the lender will insist on at least a basic valuation. This is the cheapest option, and the surveyor will give a valuation and identify any major obvious defects. It is intended to ensure that the lender will be able to recover any losses by selling the property, and is not detailed. A buyer should be advised to obtain a fuller survey.

Answer 38

This is much more detailed than the basic valuation, and will be suitable for most properties in reasonable condition aged less than 150 years.

Answer 39

This is suitable for any property, but should especially be considered where the property is listed, has had extensive renovations, or where extensive alterations are planned. It is the most expensive option.

Answer 40

At the start of a transaction you need to be aware and be able to advise your client of any tax implications in respect of the property transaction. In a property transaction, you need to be aware of three different taxes that could be payable. These are: * Stamp Duty Land Tax (England) or Land Transaction Tax (Wales) * Capital Gains Tax * Value Added Tax

Answer 41

A buyer must pay Stamp Duty Land Tax (SDLT) if it buys a property or land over a certain price in England and Northern Ireland. If the property value does not exceed the threshold figures, no SDLT is payable. The threshold figures and rates of SDLT payable are different depending on whether the property is residential or commercial. The tax is different if the property or land is in Wales where Land Transaction Tax (LTT) is payable if the sale was completed on or after 1 April 2018.

Answer 42

Capital Gains Tax (CGT) is a tax on the profit when you sell certain assets (including land and buildings) that have increased in value. It is the gain the seller makes that is taxed, not the amount of money they receive.

Answer 43

You buy a piece of land for £100,000 and later sell it for £135,000. This means you made a gain of £35,000. (In practice it is a bit more complicated, as you can deduct costs of buying and selling the property, but this is the basic principle.). CGT is not payable on many residential sales, because if the client is selling their own home, they can use an exemption called Private Residence Relief (PRR).

Answer 44

Value Added Tax (VAT) is a tax that is added to the price of certain goods and services. It is not usually applicable to existing residential properties, which are VAT exempt. However, some commercial property purchases will be subject to VAT. The buyer must pay VAT on the sale price to the seller.

Answer 45

* At the outset of the matter, a property solicitor should consider timescale and costs, surveys, co-ownership and tax as appropriate. * Joint tenants are seen as a single entity and the right of survivorship applies. * Tenants in common hold their own individual shares in the property, which they can pass under their will in the event they die.

Answer 46

* A buyer should always be advised to instruct a surveyor to undertake a physical survey of the property. There are three types of survey. In most circumstances, a buyer should be recommended to undertake at least a homebuyer report, and ideally a full structural survey. * Whether acting for the buyer or seller in a property transaction, a property solicitor should consider the tax implications of a transactions. * Particularly relevant for a property transaction are SDLT/LTT, VAT and CGT.

Answer 47

The buyer must have sufficient funds to complete the purchase, which includes the following: * Cash to pay the deposit on exchange * The balance of the price on completion * The agreed price for any extras, such as contents that come with the property * Tax (SDLT or LTT, CGT, VAT as appropriate) * The solicitor’s fees, which will be subject to VAT (irrespective of the VAT treatment of the property itself) * The solicitor’s disbursements – such as search fees and Land Registry fees

Answer 48

The funding usually comes from: 1. Client's own resources 2. A mortgage loan 3. Proceeds of any related sales

Answer 49

In commercial property the funding options can be more varied and complex: * With high value properties, money may be raised from a group of lenders (syndicate) to raise the money and limit their risk exposure * A lender may fund a development whereby the lender will provide the money to the buyer not only buy the land, but to develop buildings on it. The lender will require the power to step in to complete the development if the buyer fails to carry it out.

Answer 50

The borrower repays the capital sum by monthly payments, together with an interest amount added each month. At the end of the term (say 25 years), the loan has been paid off in full.

Answer 51

The borrower only pays the interest on the loan. This means the borrower pays less per month, but the disadvantage is that the capital remains outstanding, no matter how long the loan is in place. The capital will generally only be repaid by the sale of the property. The borrower may, still, however, end up better off as they will have the ‘equity’, ie, the value of the property (hopefully higher) that is not required for the mortgage.

Answer 52

In general, these are no longer available in the UK, but you may come across endowment mortgages that clients have taken out in the past. They are interest only mortgages, topped up with a payment that is invested in an endowment policy. The idea is that the policy repays the capital at the end of the term. Unfortunately, many have not performed as expected, leaving borrowers with a shortfall to make up out of their own cash.

Answer 53

* Funding for a property purchase usually comes from the purchaser and a lender. * Residential transactions typically involve the borrower obtaining funding from a high street bank/building society. Commercial property finance can be raised from these lenders as well as other more complex ways, such as through equity finance. * There are different types of mortgage loans available including capital repayment and interest-only.

Answer 54

The SRA principles are the “fundamental tenets of ethical behaviour” expected of all solicitors, and other regulated lawyers. You will see more detailed guidance, but you should always have in mind the principles.

Answer 55

The Solicitors Regulation Authority (SRA) principles are that you act: (a) in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice. (b) in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons. (c) with independence.

Answer 56

(d) with honesty. (e) with integrity. (f) in way that encourages equality, diversity and inclusion. (g) in the best interests of each client

Answer 57

The SRA Code of Conduct for Solicitors (CCS), Registered European Lawyers and Registered Foreign Lawyers expands on these principles to set out the professional standards expected of solicitors and other SRA regulated legal service providers. This section builds on your understanding of Professional Conduct by considering the conduct issues and SRA Code of Conduct most relevant to property practice.

Answer 58

* Can you provide a competent and timely service? * Duty of confidentiality * Are you authorised to act on your client’s behalf? * Would you have any conflict of interest? * Duty of disclosure

Answer 59

CCS 3.2 requires that you ensure that the service you provide to clients is competent and delivered in a timely manner. * Do you have the necessary skills and experience for what your client is asking? If you mainly deal with residential property, will you be able to deal with the purchase of a high value commercial property (or vice versa)? If not, you may need supervision or to refer the matter to another lawyer who has the necessary skills and experience. * If you think that you will be too busy to offer a service that deals with the client’s matter in a timely manner, consider referring the matter to another lawyer, possibly someone else in your team.

Answer 60

CCS 3.1 requires that you only act for clients on instructions from the client or from someone properly authorised to provide instructions on their behalf. If you have reason to suspect that the instructions do not represent your client’s wishes, you do not act unless you have satisfied yourself that they do.

Answer 61

* Identity checks are essential to verify that your client is whom they claim to be * Be careful about accepting instructions from one spouse on behalf of the other –require written confirmation from the other spouse that they are happy for you to take instructions from the first spouse * When acting for a company, ensure that you are instructed by a validly appointed director (Companies House check) who has authority to instruct you (eg, a board resolution)

Answer 62

CCS 6.1 requires that you do not act if there is an own interest conflict or a significant risk of an own interest conflict.

Answer 63

This means a situation where your duty to act in the best interests of any client in relation to a matter conflicts, or there is a significant risk that it may conflict, with your own interests in relation to that or a related matter (SRA Glossary) Note that there are no exceptions to this rule. If you have an own interest conflict, or there is a significant risk that an own interest conflict might arise, you must NOT act.

Answer 64

Circumstances that may give rise to an own interest conflict: * A financial interest of yours or someone close to you Your developer client asks you to advise on a large development. You realise that it is sited next to your partner’s holiday cottage and will likely affect its value. * A personal or business relationship of yours. You act for the buyer of a house. The seller is your best friend. The seller fails to complete the purchase, and the buyer instructs you to claim for damages

Answer 65

It can be difficult sometimes to identify conflicts. For example, you have been asked to act in the purchase of a house. Your closest friend, a solicitor at another firm, has been asked to act for the seller. Is this a conflict? It can be difficult sometimes to identify conflicts. For example, you have been asked to act in the purchase of a house. Your closest friend, a solicitor at another firm, has been asked to act for the seller. Is this a conflict?

Answer 66

Provided that you and your best friend are able to be objective and separate your client’s interests from your own, then this should be acceptable. However, if you feel that it would hinder your independence and impartiality, then you should consider declining to act or passing it to someone else in your firm.

Answer 67

CCS 6.2 requires that you do not act in relation to a matter or a particular aspect of it if you have a conflict of interest or a significant risk of such a conflict in relation to that matter or aspect of it unless… There are exceptions to the rule, but they are rare. In most cases, if there is a conflict of interest, you will NOT be able to act

Answer 68

This means a situation where your separate duties to act in the best interests of two or more clients in the same or related matter conflict (SRA Glossary)

Answer 69

If you act for a seller, your client’s interest may be to sell the property at the full price as quickly as possible. If you act for the buyer, your client’s interest may to take as long as necessary to investigate the title before exchange. If you try to act for both seller and buyer, then you will be torn between these two conflicting interests. You may wish to review the principles below, and how this might offend those principles.

Answer 70

There are other examples, such as negotiating the contract where each party will have an interest in protecting themselves from liability, or where the price has to be renegotiated. This is why you are prohibited from acting where there is a conflict of interest.

Answer 71

CCS 6.2: You do not act in relation to a matter or a particular aspect of it if you have a conflict of interest or a significant risk of such a conflict in relation to that matter or aspect of it unless: a) The clients have a substantially common interest in relation to the matter or the aspect of it, as appropriate; or b) The clients are competing for the same objective,

Answer 72

and the conditions below are met, namely that: (i) All the clients have given informed consent, given or evidenced in writing, to you acting; (ii) Where appropriate, you put in place effective safeguards to protect your clients’ confidential information; and (iii) You are satisfied it is reasonable for you to act for all the clients

Answer 73

This means a situation where there is a clear common purpose between the clients and a strong consensus on how it is to be achieved (SRA Glossary)

Answer 74

Two clients who often buy properties together for development ask you to prepare a report on title for a site. They have a clear common purpose (to investigate the land) and a strong consensus on how it is to be achieved (through your report). You can act for both clients and prepare the report on title.

Answer 75

Two clients who often buy properties together for development ask you to prepare a report on title for a site. They have a clear common purpose (to investigate the land) and a strong consensus on how it is to be achieved (through your report). You can act for both clients and prepare the report on title.

Answer 76

On receiving the report on title, both clients decide to buy the property together. You must check again that they have a clear common purpose (to buy the land) and a strong consensus on how it is to be achieved (ie, do they agree on the price, timetable, etc?). The clients then fall out and decide to negotiate separately against each other for the same property. They no longer have a clear common purpose, and therefore you may not act for both of them (and ideally neither of them).

Answer 77

Arguably a seller and buyer may have at least one clear common purpose if they both want the agreed deal to take place as soon as possible. However, they will lack strong consensus on how it is to be achieved. The seller will likely want the sale completed as soon as possible, whereas the buyer will only want to complete if satisfied that all issues have been identified and resolved. They do not therefore, have a substantially common interest, and you cannot act for both.

Answer 78

This means any situation in which two or more clients are competing for an “objective” which, if attained by one client, will make that ‘objective’ unattainable to the other client or clients, and “objective” means an asset, contract or business opportunity which two or more clients are seeking to acquire or recover through a liquidation (or some other form of insolvency process) or by means of an auction or tender process or a bid or offer, but not a public takeover.

Answer 79

This would apply in a structured competition process, such as an auction or tender. In this instance, you may act for two or more clients, as the process itself will mean that only one of the clients will be successful. (Compare this to the last example, where the two commercial clients are separately negotiating for the same property - this would not satisfy the test as the seller may elect to give them different terms or different parts of the same property.)

Answer 80

In practice this exception only applies to sophisticated clients. Although you would be acting for two or more clients at the beginning of the process, the nature of the process is that at the end of the process, you will only have one client.

Answer 81

Whenever an SCI or CFSO applies, the lawyer involved must comply with all the conditions in 6.2(i) to (iii), namely: (a) all the clients have given informed consent, given or evidenced in writing, to you acting; (b) where appropriate, you put in place effective safeguards to protect your clients’ confidential information [eg, only allowing certain staff access to the client’s files]; and (c) you are satisfied it is reasonable for you to act for all the clients [eg if one client is more vulnerable than the other, it would not be reasonable to act for both clients].

Answer 82

In commercial transactions this does not usually happen. Lenders and borrowers often have a different approach as to how they would resolve issues which arise during the transaction, so it makes it impossible for the same solicitor to act even-handedly for both parties. In addition, the same solicitor cannot negotiate with him or herself the terms of a loan agreement or security documentation. Conflicts of interest are likely and often significant.

Answer 83

In residential transactions it is common for the buyer’s solicitor to act for the lender in residential transactions because there is unlikely to be any conflict of interest between these parties. This is because they will not tend to negotiate the terms or form of the loan or security documentation and a standard form of certificate of title (this is a reporting document) approved by the Law Society and the Council for Mortgage Lenders will be used.

Answer 84

CCS 6.3 requires that you keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents. As a solicitor or legal professional, you owe a duty of confidentiality to your clients. This duty applies to current and former clients. Former clients include clients of a firm you used to work for and clients that used to instruct you but now instruct a different firm. It also continues to apply after a client’s death.

Answer 85

The duty does not apply where disclosure is required or permitted by law. A number of statutes empower the government and other bodies to require disclosure of documents, eg HMRC or the National Crime Agency, when investigating money laundering. You might also need to disclose information to comply with a court order.

Answer 86

CCS 6.4 requires that where you are acting for a client on a matter, you make the client aware of all information material to the matter of which you have knowledge… If acting for a buyer, you must report to your client on the extent and results of your investigations, and any limitations or matters which were not covered. As well as complying with CCS 6.4, this makes it less likely that your client will be able to sue you for negligence!

Answer 87

There are limited exceptions to this duty, including if you believe that disclosing the information could cause serious physical or mental harm to your client or another person, or disclosure is prohibited by legal restrictions. It is rare that these will apply.

Answer 88

CCS 8.6 requires that you give clients information in a way they can understand Commercial clients may be used to reading reports on title, whereas residential clients may not be. If you provide a report in complex and technical language to a client who cannot understand it, then you have not complied with CCS 8.6 (unless perhaps you offer to go through it on the phone or in person).

Answer 89

* When you are taking on a new client or instructions from an existing client you must ensure that you are competent to act (CCS 3.2). * You must always make sure that anyone giving you instructions is authorised to act on behalf of the client. (CCS 3.1) * You must not act if there is an ‘own interest conflict’ or a significant risk of an own interest conflict (CCS 6.1). There are no exceptions to this rule. This occurs where your duty to act in the best interests of your client conflicts with your own interests.

Answer 90

* You must not act in relation to a matter if you have a ‘conflict of interest’ or a significant risk of such a conflict (CCS 6.2). This occurs where your separate duties to act in the best interests of two or more clients in the same matter conflict. There are two exceptions to this rule. * The two exceptions to the rule in CCS 6.2 where you may be able to act where there is a conflict of interest or a risk of a conflict of interest are: - where the clients have a substantially common interest in relation to the matter or the aspect of it, as appropriate; or - the clients are competing for the same objective

Answer 91

* For each exception you must also meet all the following conditions: - all the clients must have given informed consent, in writing, to you acting; - where appropriate you put in place effective safeguards to protect your clients’ confidential information; and - you are satisfied it is reasonable for you to act for all the clients

Answer 92

* You have a duty under CCS 6.3 to keep the affairs of clients and former clients confidential. There are a limited number of exceptions to the duty of confidentiality.

Answer 93

* You also have a duty under CCS 6.4 to make your client aware of all information material to the matter of which you have knowledge. There are exceptions to this duty. If the duty of confidentiality and duty of disclosure conflict, your duty of confidentiality will always override your duty of disclosure

Chapter 1: Freehold Transactions Flashcards

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