Freehold Transactions

Question 1

What should solicitors focus on when acting for buyers?

Answer 1

Identify issues that restrict use or pass liabilities to the client, and ensure the seller has legal title, the property is suitable, free of third-party and security interests, the contract is accurate, and funding is sufficient.

Question 2

What are the aims of a lender in a freehold transaction?

Answer 2

To ensure the property is marketable and valuable enough to recover losses if the borrower defaults. Lenders focus more on the property as security than the transaction progressing.

Question 3

What are your aims when acting for a lender?

Answer 3

Same as buyer’s solicitor plus ensuring a valid/enforceable mortgage document, identifying discrepancies in understanding between lender and borrower.

Question 4

What are your aims when acting for a seller?

Answer 4

Ensure the contract reflects terms, cooperate with the buyer’s solicitor, manage timings for linked purchases, transfer legal ownership, and collect/distribute sale proceeds properly.

Question 5

Why is identifying third-party rights important?

Answer 5

Because they may impact how the property can be used or reduce its market value.

Question 6

Why does the lender not worry about transaction delays or failures?

Answer 6

Because the lender is more focused on the property’s value and enforceability of the security if the buyer defaults.

Question 7

What are the three main stages of a freehold conveyancing transaction?

Answer 7

Pre-exchange, pre-completion, and post-completion.

Question 8

What happens during the pre-exchange stage?

Answer 8

Buyer agrees price, gets survey, solicitor investigates and reports on title. Only after this will buyer proceed to exchange.

Question 9

What happens on exchange of contracts?

Answer 9

Buyer and seller become contractually bound, buyer pays a deposit (usually 10%), and cannot withdraw without financial penalty.

Question 10

What happens during pre-completion?

Answer 10

Buyer arranges funds, seller prepares paperwork. Residential clients might arrange removals.

Question 11

What happens on completion day?

Answer 11

Buyer’s solicitor transfers funds, seller’s solicitor transfers documents, keys are exchanged, and physical move occurs.

Question 12

What post-completion steps are involved?

Answer 12

Seller’s solicitor pays off mortgage and gives balance to seller; buyer’s solicitor pays SDLT/LTT and registers new ownership.

Question 13

What are the buyer’s main tasks pre-exchange?

Answer 13

Take instructions, do searches, investigate title, raise queries, report to client, and approve draft contract.

Question 14

What are the seller’s main tasks pre-exchange?

Answer 14

Take instructions, prepare draft contract, deduce title, respond to pre-contract enquiries.

Question 15

What are the buyer’s main tasks pre-completion?

Answer 15

Prepare deed, raise and respond to requisitions, carry out final searches, ensure funds are in place.

Question 16

What are the seller’s main tasks pre-completion?

Answer 16

Approve deed, respond to requisitions, prepare for completion.

Question 17

What does the Latin phrase “caveat emptor” mean and imply?

Answer 17

It means “buyer beware.” The buyer takes the property as they find it and must investigate before exchange.

Question 18

What information sources should a buyer’s solicitor use to investigate title?

Answer 18

Land Registry or deeds, seller’s replies to enquiries, searches, and survey reports.

Question 19

What did the case Hardy v Griffiths [2014] establish?

Answer 19

That buyers cannot rely on sellers to disclose defects. The court upheld caveat emptor, as the buyers failed to conduct a proper survey before exchange.

Question 20

What can a buyer do if a problem is found before exchange?

Answer 20

Walk away without legal liability, or require the issue to be addressed as a condition in the contract.

Question 21

Can the buyer claim costs if they walk away pre-exchange?

Answer 21

No, there’s no legal right to recover costs from the other party before exchange.

Question 22

What is co-ownership and what must be clarified early on?

Answer 22

Whether ownership is legal or beneficial, and if owners are joint tenants or tenants in common.

Question 23

What is the difference between legal and beneficial ownership?

Answer 23

Legal owners are registered and limited to 4; beneficial owners can be any number or age and hold equitable interests.

Question 24

What is the effect of joint tenancy vs tenancy in common?

Answer 24

Joint tenants have right of survivorship; tenants in common hold defined shares which pass via will.

Question 25

What are the main types of survey?

Answer 25

Valuation report, homebuyer’s report, and full structural survey.

Question 26

What are commercial funding examples?

Answer 26

Syndicated loans, equity finance, and development finance with lender step-in rights.

Question 27

What does CCS 3.2 require?

Answer 27

That solicitors provide a competent and timely service appropriate to the matter.

Question 28

What does CCS 3.1 require?

Answer 28

Solicitors only act on proper client instructions and must verify client identity and authority.

Question 29

What is an 'own interest conflict'?

Answer 29

A conflict between solicitor’s duties to the client and their own personal interest (CCS 6.1); solicitor must not act.

Question 30

What is a 'conflict of interest' under CCS 6.2?

Answer 30

A conflict between duties owed to two or more clients. Solicitors usually cannot act unless exceptions apply.

Question 31

What are the two exceptions to CCS 6.2?

Answer 31

Substantially Common Interest (SCI) and Competing for the Same Objective (CFSO), both requiring safeguards and written consent.

Question 32

What is Substantially Common Interest (SCI)?

Answer 32

Where clients share a clear common goal and consensus on how to achieve it.

Question 33

What is Competing for the Same Objective (CFSO)?

Answer 33

Clients compete for a mutually exclusive asset (e.g. at auction), where only one will succeed.

Question 34

Can a solicitor act for both buyer and lender?

Answer 34

Yes in residential transactions due to aligned interests. Not usually in commercial due to conflicts and separate negotiations.

Question 35

What is the duty of confidentiality (CCS 6.3)?

Answer 35

To keep client affairs confidential indefinitely unless disclosure is required by law or consented to.

Question 36

What is the duty of disclosure (CCS 6.4)?

Answer 36

Solicitor must inform clients of material facts unless prevented by confidentiality or law.

Question 37

What is required by CCS 8.6 regarding client communication?

Answer 37

Information must be provided in a way the client understands—adjusting tone for residential vs commercial clients.

Question 38

What happens if duties of confidentiality and disclosure clash?

Answer 38

Confidentiality prevails. Solicitor must seek client consent to disclose or cease acting if consent is refused.