Conveyancing Flashcards
(159 cards)
1
Q
What happens during the pre-contract stage
A
Take instructions
S gives B contract and evidence of title
B looks into title and encumbrances
B does searched and enquiries
report results of searches to B and lender
2
Q
does S have to answer enquiries from B
A
no but an incorrrect answer may be misrepresenation
3
Q
what happens in the pre-completion stage
A
if acting for lender - Bs solvency check
if acting for lender - draft mortgage deed
get client’s executed mortgage deed
submit title report to lender and ask for mortgage advance
ensure all docs and money are avaliable
do pre-completion searched
4
Q
what to do on completion
A
pay remaining money
undertake to discharge mortgage
5
Q
what happens after completion
A
pay tax
register
discharge mortgage and remove from title
6
Q
which conveyances does the law society conveyancing protocol apply to
A
only residential conveyancing
7
Q
can you act for buyer and seller
A
no - substantially common interest exeption doesn’t apply here
8
Q
what to do if seller refuses to disclose contract race to potential Bs
A
refuse to act for seller
9
Q
can you advise on or arrange a regulated mortgage contract
A
this is a regulated activity so would need to rely on s327 exemption
giving generic advice or arranging execution of an independently chosen mortgage is not regulated so can do this
10
Q
what is a regulated mortgage contract
A
borrower is individual, it is the first legal charge of property in the UK and at least 40% is for occupation of borrower or immediate family
11
Q
is CGT payable on conveyance
A
not if principle private residence relief applies - main residence throughout ownership
if garden of more than 0.5 hectars may pay CGT on excess unless extra was necessary for reasonable enjoyment of house
relief may be lost of part of house used only for business
12
Q
is SDLT payable on residential or commercial transactions
A
both
13
Q
is VAT payable on conveyance
A
if commercial building rented out and owned by company
if commercial B
14
Q
how much SDLT for a first time buyer
A
nothing up to 300K
300-500K 5%
15
Q
how much SDLT paid (if not first time buyer)
A
up to 125K - 0% 125 - 250k - 2% 250 - 925K - 5% 925k - 1.5m - 10% 1.5m upwards - 12% on each portion
16
Q
what is SDLT payable on
A
land but not chattels so can allocate fair amount to chattels to save on SDLT
17
Q
which form is used to pay SDLT
A
SLDT1
18
Q
how long to pay SDLT
A
14 days from completion or fine, interest and not registered
19
Q
which transactions incidental to covenyance attract CGT
A
release of easements
gifts
20
Q
can you register for VAT if you only sell exempt goods
A
no
21
Q
VAT rate on sale of new residential freehold
A
zero-rated
22
Q
VAT rate on subsequent sales of residential freehold (not first sale)
A
not in course of business so not VAT
23
Q
VAT payable on sale of greenfield site (commercial)
A
exempt/option
24
Q
VAT payable on supply of construction services (commercial)
A
standard rate
25
VAT payable on supply of professional services (commercial)
standard rate
26
VAT payable on sale of new commercial freehold
standard rate
27
VAT payable on sale of old commercial freehold
exempt / option
28
VAT payable on grant of commercial lease
exempt/option
29
what is a new/old commercial building
new commercial property is within 3 years from completion of building
30
How soon should S provide EPC
at earliest opportunity. Preferably within 7 days but in any event within 28 days
31
How to investigate title for registered land
S provide Official copies of registered title
B get copy of title plan from land reg
B check if there are any overriding interests by using searches and enquiries
32
what do the official copies of registered title show
entries on property, proprietorship and charges register
33
when must title deduction be done by
must done before exchange. Cannot object to it afterwards
34
what is investigation of title
to establish who owns the property and any incumberances
35
what does a typical sale contract say about incumberances
S sells property free of all incumberances unless it states otherwise so must identify incumberances and specify them in the contract
36
what are incumberances
third party rights that bind the property
37
how to investigate title for unregistered land
check if reg, pending reg or caution against reg
if unreg prove with deeds
S gives B copy of deed and originals on completion (or certified copies if selling part)
find good root of title
prepare epitome
search against estate owners in epitome using k15
38
who gives B the deed for unreg land
seller or if a mortgage then lender
39
what happens on first reg if there is a caution against reg
land reg notifies cautioner
| they must prove their right within specified time or they lose it
40
how to check if unreg land is registered, pending registration or has a caution against registration
index map search at land reg on form SIM with a plan of the property
41
what is vertification of title
on completion when B's solicitor examines original deed to check they are the same as the copies
42
how to mark original deed in a sale of part
a memorandum of the sale of part is marked on the original deed
43
how to find root of title
find it in deeds
44
what is root of title
the doc from which the title investigation begins. usually the most recent doc that meets the requirements
45
requirements for good root of title
shows who owns legal and equitable interest
describes the land
do nothing to cast doubt on title
be at least 15 years old
need unbroken chain of ownership from root up to seller. Need documentary evidence of all changes of ownership
46
which documents are most likely to give good root of title
conveyance
mortgage
deed of gift
assent
47
when can B call for docs that pre-date the root of title
when the root doc refers back to a third party right
48
who prepares epitome of title
seller
49
what is the epitome of title
schedule of docs from and including root of title to present day.
numbered and in chronological order
attached to epitome are copies of each doc
50
what document is needed for the title investigation if the owner of the property has died
grant of probate
51
what should buyers solicitor do once they receive the epitome of title
make searches against all estate owners revealed in epitome and attached docs for period of ownership (or since 1926) even if period of ownership pre-date root of title
52
how to search against estate owners revealed on epitome
use form k15
53
does the buyer need to search against the lender when searching against estate owners revealed on epitome
not - only if they are in possession
54
what else should buyer's solicitor check when doing searches to prove title
check title deed to see if description of property is consistent throughout
check each title for incumberances
check each doc was properly executed as a deed
55
can you rely on searched done previously by others in previous sales
yes
56
when do restrictive covenants bind unreg land
only if registered properly
57
where do easements appear
reg land - charges and property register
unreg land - conveyance
property reg shows financial contributions to easements
58
where is info regarding mines and minerals found
reg land - property register
| unreg land - conveyance. do index map search to see if they have seperate title on form SIM
59
how to tell if the equitable interest is held as JT or TinC
assume JT unless restriction appears in proporietorship register or conveyance
60
does the seller have a duty to disclose problems with the property
no but cannot give misleading answers to questions
61
what are the essential pre-contract searches
```
sellers enquiries
environmental search
survey
flooding
water and drainage
local land charges search and standard enquiries of local authority (local search)
```
62
what are the non-essential pre-contract searches
```
chanel and repair
commons
mining
railway
canal and river trust
highways
unregistered land searches
company search
bankruptcy / insolvency search
```
63
pre-contract enquiries of seller
essential
| disputes, occupying parties, convenant compliance, planning permission, boundaries, VAT status
64
envronmental searches
essential
desktop search to check for contamination
if risk of contamination do physical survey
consider insurance
65
flood search
essential
re flood
insurance
66
professional survey
essential
lender will want valuation
full structural survey or homebuyers valuation and survey
67
local land charges search and standard enquiries of local authority (aka local searches)
essential
LLC1 and CON29
planning permission, contaminated land, road repair liability, financial charges, restrictions on land, tree preservation order, conservation area, smoke control order
68
optional enquiries to local authority
CON29O
| environmental pollution and common land attached to property
69
water and drainage search
```
essential
raise with water company using CON29DW
are they adopted
connected to public water supply
connection to public sewer for foul and surface water
```
70
chancel and repair search
in reg land - overriding status lost in 2013 but if last transfer for value was before this date it will bind buyer
in unreg land - only binding if referred to in titled deed or protected by caution
consider insurance
71
mining search
CON29M
| confirm if mining took place
72
canal and river trust search
liability for repair or maintenance
| any previous floods
73
railways search
network rail don't answer these. Use CON29
| obligation to repair and restrictions on building works
74
highways
CON29
doesn't include info on verges and pavements
send plan to highway authority asking for publically maintainable highway to be marked on it
75
unregistered searches
index map search with form SIM and land charges department search against previous estate owners
76
company search
when seller is company at companies house
look for fixed or floating charges to discharge on completion
check for insolvancy
also do company search against any corporate estate owners revealed in epitome
77
bankruptcy / insolvency search
solicitor acting for lender should search against borrower
use K16 to land charges department if it is an individual
if it is a company do a company search instead
78
what is the rule in Halsall v Brizell
cannot take benefit of positive covenant without taking burden of it too
exception to the rule that positive covenants don't run with the land
benefit and burden must be conferred by same transaction
need correlative relationship between benefit and burden
must have choice to disclaim benefit to free themselves of burden
79
where are mortgages found
charges reg (and maybe proprietorship reg) and title deeds on epitome
80
where are details of the restrictive covenants found
charges reg or conveyance
81
in unregistered land when is a post - 1925 restrictive covenant binding on buyer
only if registered as a D(ii) charge against name of original covenantor
check with land charges search
82
where are details of the positive covenants found
charges reg or conveyance if un reg land
83
how to tell if seller gave indemnity covenant when they bought property
check proprietorship reg
84
what should you assume about a covenant that you know exists but for which the details are lost
assume it is restrictive and binding on buyer
| get insurance
85
when do leases bind
if registered - binding
if not registered binding if overriding
overriding - if legal lease for 7 years or less or equitable lease plus actual occupation
86
where to find a lease
title deed for unreg land (unless parol lease which is binding but not made by deed)
87
what is a notice
entry on charges register indicating burden
88
do you need consent of owner to place a notice on register
no
89
what is the effect of a notice
it doesn't guarantee interest is valid or exists. Doesn't give them any rights over property. it ensures priority of interest in notice is protected against subsequent interests
90
what to do if searches reveal a notice
ask S to ascertain what is relates to and refuse to proceed until S has it cancelled at land reg before contract exchange
91
Do home rights bind buyer
yes if protected by notice or class F charge by date of transfer of property to buyer
92
what to do if searches disclose a home right
buyer should obtain from non-owning occupier a release of all rights in the property and agreement to vacate. Usually in the contract
93
When do the standard conditions of sale apply (SC)
residential and simple commercial sales
94
when do the standard commercial property conditions apply (SCPC)
high value commercial property transactions
95
what are the three parts of the SC and SCPC
particular of sales - burdens on property, title number and class or root title, full or limited guarantee, financial terms of transaction
standard conditions - terms that govern transaction unless parties specifically agree something else
special conditions to meet requirements of specific transaction
96
what are the two parts of the SCPC
part 1 applies unless excluded and part 2 applies if specifically included
97
full guarantee or limited guarantee
sell with full if they own whole legal and equitable title
| sell with limited if they have limited knowledge of the property eg executor or trustee
98
when does the legal interest in the property pass from seller to buyer
on completion
99
with both full and limited guarantee seller impliedly covenants that...
they have the right to dispose of the land
they will do all they reasonably can to transfer the land
if leasehold, the lease is subsisting at the time of disposal and there is no breach of covenant making the lease liable to forefiture.
for full guarantee only - the land is free from incumberances other than those S doesn't know of and couldn't reasonably know of
100
what is the contract rate
interest charged if party is late in completing. interest is charged on purchase price less deposit
2-4% is normal
101
what if B fails to complete
S can forefit and keep the deposit
102
how to pay the deposit
cheque or electronic transfer - SC
electronic transfer only - SCPC
must be paid into bank in name of seller's solicitor or coneyancer nominated by seller's solicitor (if SC2.2.5 is used)
103
what is SC 2.2.5
Seller can use deposit to fund next property
104
how is a despoit held and what difference does it make
held by seller's solicitor as stakeholder - cannot give it to seller until completion
held by seller's solicitor as agent - it can be released to seller immedately after exchange
105
when is a despoit held as agent instead of stakeholder
when buyer agrees
106
when does risk of damage to property pass to buyer
on exchange of contracts so buyer must complete even if property is damaged between exchange and completion
107
does seller need to insure freehold
no - not unless required by special condition
108
what are the 3 VAT options in the SC and SCPC
purchase price is exclusive of VAT and VAT will be added on top (SCPC2)
purchase price is inclusive of VAT so VAT cannot be added on top (SC1.4 or special condition for SCPC)
purchase price is exclusive of VAT so VAT can be added on top if law changes between exchange and completion but won't opt to tax (SCPC part 2 condition A1)
109
where are the mortgage terms and conditions found
in the mortgage offer for residential and simple commercial loans
or
a commitment letter with terms sheet attached followed by facility agreement containing terms of lending arrangements if complex loan
110
can the lender withdraw the mortgage offer after exchange
yes mortgage offer may allow this
111
when are mortgages legal
when made by deed and completed by registration
112
do all mortgage deeds contain a power of sale
this is implied into all mortgage deeds but often they include an express power too
113
what must the buyer's solicitor explain to the buyer regarding the mortgage
the obligations under the mortgage deed, consequences of defaulting, and powers of lender in the event of default
114
can solicitor act for borrower and lender even if there is a conflict
yes as long as there is a substantially common interest and safeguards are in place
115
what to do if a conflict arises between lender and borrower where you act for both
cannot proceed with purchase using lender's funds until resolved to lender's satisfaction
116
what must the lender be provided with to show that the property has good and marketable title
certificate - won't exchange until they have this.
117
what does the certificate of good and marketable title include
confirms no legal problems with the property
who will own property once sale is completed
the completion date when funds are needed
also in more complex commercial version:
report about property
summary of info ascertained in title investigation and pre-contract searches
118
who is the certificate / report addressed to and prepared by
prepared by buyer's solicitor
| addressed to buyer or to buyer and lender
119
what if the info in the certificate / report to lender if wrong
lender can sue because it contains waranties about correctness of info
120
when is the certificate given to the lender
immediately prior to completion of the loan
| drafts given earlier
121
do you need your client's authority before exchanging contracts
yes must get this authority in writing with note on file or liable in negligence
122
can you sign the contract on behalf of your client
yes if they have given you the express authority
123
3 ways to exchange contracts
in person, in post or by telephone
124
3 protocols for exchanging contracts
Formula A, B and C
125
formula A for exchange of contracts
one solicitor has both parts of contract duly signed so one solicitor sends the client's signed part already. Solicitor undertakes to send it the same day by DX or first class post once signed. Buyer undertakes to send deposit funds the same day
126
formula B for exchange of contracts
each side holds their own client's signed contract and the same day sends by DX or first class post or personally to the other side duly dated. Buyer sends deposit
127
formula C for exchange of contracts
for residential property in a chain
128
how to record the exchange of contracts
record details, time and formula in top corner of front page of contract. Do this at time of phone call exchanging. also note in file the date, time and formula, deposit and identity of solicitor exchanging.
129
what pre-completion checks should be done
if reg - land reg search against title number on OS1 (or OS2 and plan if part sale)
if unreg - do land charges search against seller on form K15
if reg - special land charges search on K16 (bankruptcy search)
if unreg do bankruptcy search using land charges search by adding buyers name to K15 that you will already be doing against the seller
or if company do bankruptcy search at companies house
130
priority period conferred by pre-completion land reg search against title number (OS1/OS2)
30 working days from date of search. submit reg application by noon on day 30
131
priority period conferred by pre-completion land charges search on K15
15 working days from date of result
132
in whose name should the pre-completion land register search be done (os1/os2)
the lenders if there is a mortgage
133
how long is the priority period conferred by a bankruptcy search on a company at companies house
no priority period
134
how soon after exchange of contracts does completion take place
4 weeks / 20 working days
135
requirements of a deed
signed, clear on its face its a deed, delivered
witnessed if private individual
if company either seal, 2Ds/DandS or 1 D and witness
136
who executes the transfer deed to transfer the land (TR1)
the seller
| but buyer also does this if they are entering into an obligation or making a declaration eg indemnity covenant
137
when is a deed delivered
when it is executed if it makes clear on its face it is a deed
so if it isn't to take effect immediately you will have to make this clear
138
what deed is used to transfer the land
TR1 or if part only then TP1
| or if unregistered can use TP1/TR1 or conveyance
139
what does the lender need to receive before they will release the mortgage advance
certificate of title
OS1 in name of lender
bankruptcy search
executed mortgage deed but not completed
140
what is a completion information form used for
to agree practicalities of completion. Buyer sends this to seller to complete. include an undertaking to discharge mortgage.
141
what is a financial statement
send from buyers solicitor to buyer to inform them of funds needed to complete
142
when does completion take place
once full funds are received by seller
143
what happens when seller receives the full funds
seller dates the TR1 and THEN the lender dates mortgage deed
144
how to complete in person
buyers solicitor checks title deeds match the copies. Seller hands over title docs
145
how to complete by post
```
BS sets out what S should do. S does this for free.
S will check title deeds on behalf of BS.
S sends docs to BS by DX or first class post
S gives implied undertaking that they will comply with BS instructions
```
146
if completing by post how can the buyer be sure the the seller will comply with the instructions to check the title deeds
sellers solicitor gives an implied undertaking
147
what to do if first registration is triggered (form and time)
2 months
| form D1 - set out overriding interests
148
how to pay SDLT (forms and time)
14 days from completion
send payment and tax return
get WRA certificate
149
how to register a mortgage if taken out pay a company and how long to do this
register at companies with 21 days of completion
150
what if a mortgage taken out by a company is not registered at companies house
void against liquidators and administrators of borrower and borrower's creditors
151
how does the lender register a mortgage
register a charge using AP1
152
how to discharge a mortgage (forms etc)
once lender receives mortgage money they complete DS1 and send it to S to send to B who apply's for mortgage to be discharged
or
do it electronically - notify B that they don't need to do anything else because it will be discharged automatically
153
remedies if you don't complete on time
SC and SCPC say time is not of the essence until notice to complete is served so you cannot rescind, only get damages
SC - B and S can pay damages
SCPC - only B liable to pay damages
154
when must the transaction be completed by
2pm or counts as next day
155
how to calculate compensation payable when completion is delayed
period between completion date and actual completion
on remainder of amount to be paid
if non-paying party at fault exclude those days
156
how to make time of the essence
serve notice to complete
157
when can you serve notice to complete
after contractual completion date
158
effect of serving notice to complete
10 working days to complete or can rescind (not obliged) and get damages
159
when can contract be rescinded so transaction is not completed
notice to complete is served and 10 working days expired
fraud / reckless misrepresentation or property will be substantially different in quality, quantity o tenure from what they were led to expect. (less serious misrep would only allow damages)
