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Completion Flashcards

(110 cards)

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1
Q

What is the purpose of the transfer deed in property transactions?

A

To legally transfer ownership of property from the seller to the buyer

The transfer deed is essential for completion of the sale.

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2
Q

What are the key steps for the seller’s solicitor before completion?

A
  • Approve the transfer deed drafted by the buyer’s solicitor
  • Arrange for the transfer to be executed by the seller
  • Reply to requisitions on title
  • Request a redemption statement from the seller’s lender
  • Ask for final meter readings

These steps ensure all legal requirements are met before completion.

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3
Q

What is the TR1 form used for?

A

The TR1 form is used to transfer the whole of a freehold or leasehold title in registered land.

It is the most common Land Registry transfer form.

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4
Q

Who traditionally drafts the transfer deed?

A

The seller’s solicitor drafts the contract, and the buyer’s solicitor drafts the transfer deed.

This is the default position in Standard Conditions of Sale.

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5
Q

What must be included in Panel 1 of the TR1 form?

A

The title number of the registered property.

For unregistered property, this panel should be left blank.

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6
Q

Fill in the blank: The transfer of land must be in the form of a _______.

A

[deed]

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7
Q

What does Panel 8 of the TR1 form address?

A

Consideration for the property transfer, including monetary and non-monetary options.

Options include payment, gifts, or other receipts.

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8
Q

What is the priority period for an OS1 search in registered land?

A

30 working days.

This period confers priority for the buyer’s transfer over any other applications.

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9
Q

True or False: Pre-completion searches are primarily concerned with the property and the parties involved.

A

True

They aim to protect the buyer’s ability to obtain title.

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10
Q

What happens if the seller does not disclose adverse issues before completion?

A

The buyer may have a claim for damages for breach of contract or misrepresentation.

This emphasizes the importance of transparency in property transactions.

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11
Q

What is the maximum number of transferees that can be named in Panel 5 of the TR1?

A

Four transferees.

This includes individuals or companies.

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12
Q

What is required for an individual to execute a transfer deed?

A

The individual must sign in the presence of an independent witness who also signs.

This is governed by the Law of Property (Miscellaneous Provisions) Act 1989.

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13
Q

What is the function of pre-completion searches?

A

To check and protect the buyer’s ability to obtain title to the property.

They help identify issues before completion rather than relying on post-completion remedies.

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14
Q

What is the consequence of not conducting an OS1 search?

A

It may lead to time and money wasted in resolving issues that arise post-completion.

This could result in professional negligence claims against the solicitor.

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15
Q

What does the term ‘consideration’ in property transactions refer to?

A

The payment or value exchanged for the property.

Consideration can be monetary or non-monetary.

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16
Q

What must the seller’s solicitor provide regarding the transfer deed?

A

The seller’s solicitor must approve and arrange for the transfer deed to be executed by the seller.

This is a critical step before the completion of the sale.

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17
Q

What is a TP1 form used for?

A

The TP1 form is used for the transfer of part of a registered title.

It typically requires a plan to identify the part being transferred.

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18
Q

What is the role of the buyer’s solicitor in preparing for completion?

A

To draft the transfer deed, send requisitions on title, carry out pre-completion searches, and request loan advances.

This ensures all aspects are ready for the completion date.

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19
Q

What is the significance of the ‘search from’ date in pre-completion searches?

A

It determines the date from which the search is run and checks for changes since that date.

This is crucial for ensuring the buyer’s position is protected.

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20
Q

What happens if the seller applies to remortgage the property before the buyer registers the transfer?

A

The Land Registry will advise that there is a prior application, and the lender’s solicitor may only register the charge if the buyer fails to register within the priority period.

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21
Q

What is the priority period for a land charges search?

A

15 working days; priority is obtained by the buyer completing the transaction within that time.

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22
Q

What type of search must the buyer’s solicitor carry out against the buyer to protect the lender?

A

A bankruptcy search (Form K16).

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23
Q

What should the buyer’s solicitor do if the buyer is a company?

A

Carry out a company search against the buyer to check for pending insolvency or crystallisation of a floating charge.

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24
Q

What are requisitions on title?

A

Questions that the buyer’s solicitor needs answering before completion.

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25
What is Law Society Form TA13 used for?
To handle requisitions on title in residential transactions.
26
What does the completion process involve?
Payment of the balance of the purchase price and the passing of legal title to the buyer.
27
What does the Law Society Code for Completion by Post facilitate?
Completion without the need for solicitors to physically attend each other's offices.
28
What should the seller's solicitor do immediately following completion?
Hold the transfer deed and other documents to the buyer’s solicitor’s order.
29
What is the seller's solicitor's undertaking regarding mortgages?
To redeem the mortgages against the property as soon as possible after completion.
30
What happens if a party fails to complete on time?
The defaulting party must pay interest for each day of delay as specified in the contract.
31
What is the interest rate applied if not specified in the contract?
The Law Society interest rate.
32
What happens if the buyer is late in completing?
The buyer pays interest on the purchase price minus any deposit paid.
33
What happens if the seller is late in completing?
The seller pays interest on the full purchase price.
34
Fill in the blank: Requisitions on title are similar to _______.
[pre-exchange enquiries]
35
What is one key aspect of the content of TA13?
It asks for confirmation that completion will take place according to the Law Society’s Code for Completion by Post.
36
What is a company's search used for?
To check for pending insolvency or crystallisation of a floating charge against a company buyer or seller.
37
What is the typical completion day for residential transactions?
Usually Friday.
38
What does the seller's solicitor undertake regarding the authority to receive purchase money?
To have the Seller’s authority to receive the purchase money on completion.
39
What should happen if the buyer's solicitor does not receive the necessary funds?
The seller’s solicitor is unable to date an executed transfer.
40
What is the significance of the redemption statement?
It confirms the amount needed to repay the seller's mortgage.
41
What is the role of the buyer's solicitor during completion?
To remit the sum required to complete to the seller’s solicitor.
42
What happens when the completion monies are received by the seller's solicitor?
They confirm completion and date the transfer deed.
43
What should the seller's solicitor do after confirming completion?
Send written confirmation of completion and the executed transfer to the buyer's solicitor.
44
What is the Law Society interest rate mentioned in the text?
4.1%
45
How is the daily rate of interest calculated?
Multiply the purchase price less the deposit by 4.1/100 and then by 1/365
46
What is the amount of interest the buyer must add to the purchase price when completing on 5 June?
£80.88
47
If a seller delays completion for four days, what additional costs might the buyer incur?
* £500 for storage * £400 for hotel accommodation * £90 for legal fees
48
What can the buyer claim due to the seller's breach of contract?
Common law damages for the buyer's losses
49
What is rescission?
A remedy where the contract is set aside and parties are returned to their pre-contractual positions
50
Under what condition is rescission not automatically available to the non-defaulting party?
Time is not of the essence under a standard contract
51
What happens when a notice to complete is served?
Time becomes of the essence and both parties must complete within ten working days
52
What is the consequence if either party fails to complete within the ten working day period after a notice to complete?
The non-defaulting party can rescind the contract
53
What remedies does the seller have if the buyer fails to complete?
* Rescind the contract * Forfeit the deposit * Resell the property * Claim contractual damages
54
What remedies does the buyer have if the seller fails to complete?
* Rescind the contract * Demand return of the deposit * Claim contractual damages or seek specific performance
55
What is the time frame for submitting an SDLT return in England?
14 days of completion
56
What is the time frame for submitting an LTT return in Wales?
30 days of completion
57
What happens if a charge given by a company is not registered at Companies House within 21 days?
The charge is void against any liquidator or administrator
58
What is the last step of the post-completion work?
The Land Registry application
59
What form is used for registering a purchase with a registered title?
Land Registry form AP1
60
What documents are included in a registration application for a purchase?
* Transfer deed (e.g., TR1) * SDLT5 or WRA certificate * Form DS1 to discharge seller's mortgage * Mortgage deed in favor of buyer’s lender
61
True or False: The buyer must make up the deposit to 10% without delay if they are the defaulting party.
True
62
Fill in the blank: If either party does not complete on the contractual completion date, this is a _______ of the contract.
[breach]
63
What is the effect of the notice to complete?
Makes time of the essence and provides ten working days to complete
64
What is the definition of 'failure to complete' for a seller?
The seller's solicitor is unable to date an executed transfer
65
What is the definition of 'failure to complete' for a buyer?
The seller's solicitor has not received the necessary funds from the buyer's solicitor
66
What form is used for an application for registration of a registered title?
Land Registry form AP1
67
What documents are typically included in a purchase application?
* The transfer deed (e.g., TR1) * SDLT5 or WRA certificate * Form DS1 * Mortgage deed * Certificate of registration of charge at Companies House * Other appropriate documents
68
What form is used for an application for first registration of an unregistered title?
Form FR1
69
What additional form is used to list enclosures for an unregistered title application?
Form DL
70
What must the buyer’s conveyancer disclose regarding overriding interests?
Tick AP1 or FR1 or complete Form DI
71
True or False: The application for first registration can be submitted online.
False
72
What is a certified copy of a document?
A copy stamped and signed by a solicitor confirming it is a true copy of the original
73
What happens if the Land Registry application is not submitted within 30 working days of the OS1 search?
Priority will be lost
74
What is the deadline for applying for unregistered land registration?
Two months from completion
75
What is the typical processing time for a transfer of registered land by the Land Registry?
Usually within a couple of weeks
76
What is the time frame for notifying and paying SDLT in England after completion?
Within 14 days
77
What are the SDLT rates for residential transactions up to £1.5 million?
* Up to £250,000: 0% * £250,001 to £925,000: 5% * £925,001 to £1.5 million: 10% * Over £1.5 million: 12%
78
Fill in the blank: A discount is applicable for first-time buyers on properties priced up to _______.
£625,000
79
What additional charge applies to buyers purchasing a second property?
Additional SDLT of 3% on the whole purchase price
80
What are the SDLT rates for non-residential transactions?
* Up to £150,000: 0% * £150,001 to £250,000: 2% * Over £250,000: 5%
81
What is Land Transaction Tax (LTT)?
The equivalent of SDLT in Wales
82
What are the LTT rates for residential transactions up to £1.5 million?
* Up to £225,000: 0% * £225,001 to £400,000: 6% * £400,001 to £750,000: 7.5% * £750,001 to £1.5 million: 10% * Over £1.5 million: 12%
83
What is Capital Gains Tax (CGT)?
A tax on the profit when selling an asset that has increased in value
84
What elements must be satisfied for CGT liability to arise?
* Chargeable disposal * Chargeable asset * Chargeable person * Chargeable gain
85
What constitutes a chargeable disposal?
* Sale of an asset * Lifetime gift of an asset
86
True or False: A gift on death is considered a chargeable disposal.
False
87
What is a chargeable asset in the context of CGT?
All property assets except the main home qualifying for Private Residence Relief
88
What is a chargeable gain?
The increase in value of the asset
89
What costs can be taken into account when calculating a chargeable gain on property?
* Costs incurred in acquiring the asset * Costs that contribute to the value of the asset * Costs incurred in disposing of the asset
90
What is the worth of the shop at the time of the gift?
£120,000
91
How much chargeable gain has Tatiana realized?
£20,000
92
What types of costs can be included in calculating chargeable gain for property?
Costs incurred in acquiring the asset, costs that contribute to the value of the asset, costs incurred in disposing of the asset
93
What is an example of allowable expenditure when acquiring an asset?
Conveyancers’ fees for the purchase
94
What costs are excluded from allowable expenditure?
Costs of maintenance or repair
95
What is the total acquisition value for Akeyo's restaurant?
£140,000
96
What is the total allowable expenditure for Akeyo's restaurant?
£10,000
97
What is Akeyo's chargeable gain after selling the restaurant?
£30,000
98
Why can't Akeyo count the £2,000 spent on roof repairs as allowable expenditure?
It is a repair, not an improvement
99
What is the annual exemption amount as of August 2024?
£3,000
100
What loss did Akeyo incur from selling the painting?
£3,000
101
How does Akeyo reduce his taxable gain after offsetting the loss?
From £30,000 to £27,000
102
What portion of Akeyo's gains is tax-free due to the annual exemption?
£3,000
103
What must be true for Private Residence Relief to apply?
It must have been the person's main home for all the time they lived in it
104
What happens if a property has been used for business purposes?
Private Residence Relief may be reduced or not available
105
How many properties can married couples and civil partners treat as their main home?
Only one property
106
What triggers Capital Gains Tax (CGT)?
A chargeable disposal of a chargeable asset by a chargeable person incurring a chargeable gain
107
Who pays Capital Gains Tax (CGT)?
Individuals
108
What is the formula for calculating chargeable gain?
Sale or disposal value less acquisition cost
109
What is included in allowable expenditure?
Costs of acquiring, disposing or improving the property
110
What is Private Residence Relief?
Exemption from Capital Gains Tax when selling one's home under certain conditions

Property Practice (8 decks)

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