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FLK2 - Property Practice > Completion > Flashcards

Completion Flashcards

(49 cards)

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1
Q

What are the tasks that should be carried out at pre-completion?

A

The preparation of the transfer deed

Any pre-completion searches

Making any practical arrangements for completion

Ensuring the finances are in order for completion

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2
Q

How can an individual execute a deed?

A

It must be signed by the individual and an independent witness

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3
Q

How can a company execute a deed? (4)

A

Using its common seal

Signed by a director and a secretary

Signed by two directors

Signed by a single director in the presence of a witness

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4
Q

Which parties should execute a transfer deed?

A

The seller will always execute the transfer deed.

A buyer should execute if they are entering into an obligation or making a declaration e.g. indemnity covenant or declaring a beneficial interest under a trust.

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5
Q

Which form transfers the whole of a registered freehold title?

A

TR1

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6
Q

Which form transfers part of a registered freehold title?

A

TP1

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7
Q

When and who sends the transfer deed to the other side?

A

The buyer’s solicitor will send it to the seller’s solicitor immediately after exchange of contracts.

In straight forward residential conveyances, this may be sent from the seller’s solicitor to the buyer’s solicitor in the pre-exchange package.

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8
Q

What must the transfer deed contain?

A

It must reflect the terms of the contract and the title deeds.

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9
Q

What type of pre-completion search should be completed for registered land?

A

OS1 for transfer of whole
OS2 for transfer of part

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10
Q

What is the purpose of the OS1 and OS2 forms?

A

To confer a priority period on the buyer which protects any subsequent entries being made on the register between the search date and the date the proprietor is registered.

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11
Q

How many days is the priority period which is conferred by an OS1 or OS2?

A

30 working days

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12
Q

If the buyer has a lender, which applicant should be placed on the OS1 or OS2 search?

Why?

A

The lender

The results will confer priority upon both the buyer and the lender as the mortgage is entered into slightly after the purchase.

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13
Q

What should an OS1 or OS2 search against?

A

Title number

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14
Q

What type of pre-completion search should be made in respect of unregistered land?

A

K15 search at the Land Charges Department

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15
Q

What is the priority period conferred on an applicant when using a K15 search?

A

15 working days

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16
Q

When should a company search be completed prior to completion?

What should be done on high value transactions?

A

As close to the completion date as possible.

A telephone search at the Registry of Winding Up Petitions at the Companies Court should be completed on the day of completion for high value transactions.

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17
Q

Should a solicitor perform a bankruptcy search against an individual seller?

A

For unregistered land, a K15 search should be completed against the seller.

It is not normally necessary in residential transactions because statute provides transfer of good title from a bankrupt seller even where title has vested in the trustee in bankruptcy.

It is recommended to do a K16 search on high value transactions.

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18
Q

Which form sets out the practical arrangements following completion?

A

Form TA13

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19
Q

What does form TA13 ensure in respect of a mortgage on the title?

A

The form asks the seller’s solicitor to provide an undertaking to confirm that any mortgage on the title will be redeemed or discharged, and evidence of such should be provided to the buyer’s solicitors as soon as practicable.

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20
Q

What should be sent to a lender prior to them sending over any monies for completion?

Study These Flashcards
A

A certificate of title
A solvency search against the borrowers
A clear OS1R in the name of the lender
An executed but not completed mortgage deed

21
Q

What should be sent to the buyer prior to completion in respect of any outstanding monies?

Study These Flashcards
A

A Financial Statement

22
Q

What should be included in the buyer’s Financial Statement/Completion Statement? (6)

Study These Flashcards
A

Balance of the purchase price
Any SDLT/LTT due
Registration fee
Disbursement costs
Solicitor’s fees
Any insurance policy premiums

23
Q

How should completion money be sent according to the Standard Conditions (residential and commercial)?

Study These Flashcards
A

They should be paid by a direct transfer/electronic means in cleared funds from an account held in the name of the conveyancer at a clearing bank.

24
Q

What are the next steps after completion monies are received by the seller’s solicitor?

Study These Flashcards
A

The seller’s solicitor will date the TR1

The lender’s solicitor will then date the mortgage deed

25
What are the two most common ways for a property sale and purchase completion to take place?
In person By post
26
What is the process for completion in person? (4)
The buyer’s solicitor will attend the office of the seller’s solicitor. The buyer’s solicitor will check any title documents against the evidence of title previously sent to them (usually only in unregistered land). The seller’s solicitor will hand over title documents and other documents relating to the property such as planning permissions, guarantees or insurance policies. The seller’s solicitor will then arrange for release of the keys.
27
What is the process for completion by post? (4)
The buyer’s solicitor should write out precisely what the seller’s solicitor should do on their behalf (the Code implies an undertaking from the seller’s solicitor to the buyer’s solicitor). The seller’s solicitor should then carry out the instructions and complete the transaction. The seller’s solicitor should inform the buyer’s solicitor that completion has taken place. The seller’s solicitor should send the completed documents by first-class post or document exchange.
28
What is the name of the Code that solicitors use in respect of postal completions?
The Law Society's Code for Completion by Post
29
What is the effect of completion (i.e. when does legal title pass)?
For unregistered land, legal title passes to the buyer upon completion. For registered land, legal title passes once the buyer is registered as the proprietor of the land at the Land Registry.
30
What steps should solicitors take POST-completion? (4)
Arrange for the discharge of the seller's mortgage Pay any SDLT/LTT Register any new charges at Companies House Complete the Land Registry application
31
Once the lender has received the necessary amount to redeem a mortgage, how can they remove it from the property?
The lender will: Complete a Land Registry form DS1 and send to the seller's solicitor to send to the buyer's solicitor Submit an e-DS1 through the Land Registry portal Use the Electronic Discharge system which automatically removes the charge via a message to the Land Registry
32
When must SDLT/LTT be paid upon completion?
SDLT - within 14 days of completion. LTT - within 30 days of completion
33
What form is provided once SDLT/LTT is paid?
SDLT - SDLT5 form LTT - WRA certificate
34
What must a lender's solicitor do where the buyer is a company and has purchased a property with the aid of mortgage?
Within 21 days of creation (i.e. completion), the lender's solicitor must register the charge at Companies House.
35
What should be included on the AP1 to update the proprietor of registered land? (8)
AP1 Certified copy of the transfer SDLT/WRA certificate Form DI to note any overriding interests DS1, where the buyer is applying for the mortgage to be discharged Certified copy of mortgage deed (where relevant) Certificate of registration of the company (where the buyer is a company) Lender/solicitor's confirmation that the enclosed mortgage deed matches that filed at Companies House
36
What is the form used for the first registration of title and by when must it be submitted?
FR1 It must be submitted within two months of completion.
37
What is the form used to confirm to the Land Registry which documents are included in the application?
Form DL
38
What should be included in an FR1 application? (6)
Documents from evidence of title Pre-contract searches and enquiries Contract Pre-completion search certificates Form DI Original mortgage deed
39
What is produced by the Land Registry upon a successful first registration application?
A Title Information Document
40
Who normally retains a Title Information Document?
The lender
41
When must completion take place following exchange according to the Standard Conditions (both residential and commercial)?
Within 20 working days after the date of the contract.
42
When must completion money be received prior to completion according to the Standard Conditions (residential and commercial)?
Before 2pm on the day of completion
43
Who is required to pay compensation on late completion according to the SCs?
The SCs - buyer and the seller The SCPC - only the buyer
44
How is compensation calculated for late completion?
Subtract any deposit paid from the purchase price Multiply that amount by the contract rate specified in the contract Divide that amount by 365 to give a daily rate Multiply the daily rate by however many days in default
45
What damages can a seller claim for late completion?
Damages should put the claimant in the position it would have been in had the contract been correctly performed. Damages may also be awarded for any reasonably foreseeable consequential losses.
46
What is a notice to complete?
Once served, time is of the essence and gives the other party 10 working days to complete. Where the defaulting party fails to complete, the party who served the notice may rescind the contract.
47
What happens to a deposit if a notice to complete is not complied with?
If the buyer is the defaulting party, the seller may retain their deposit. If the seller is the defaulting party, the seller must repay the deposit to the buyer.
48
What circumstances under the SCs can a seller or buyer rescind the contract?
Failing to comply with a notice to complete Where there has been a serious misrepresentation
49
What is considered a serious misrepresentation?
Where the seller’s error or omission results from fraud or recklessness OR where the buyer would be obliged to accept a property differing substantially from what the error or omission led them to expect. Less serious misrepresentations only entitle them to damages.

FLK2 - Property Practice (6 decks)

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