Legal Drafting (Property) Flashcards
(25 cards)
When drafting the contract date, what should be includeed?
This needs to be left blank as it is added when the contracts are exchanged.
Often a post-it note printed “Do not date” is stuck here t
In your drafting exercise, you should add “to be inserted on exchange”
If a property being sold has an occupier (in addition to the seller - for example, an adult daughter) how should they be treated contractually?
Any adult or entity in occupation of a property, and who is not the seller, should sign the contract, or make a written declaration which they sign and to which the contract should refer, that
- a) they agree to vacate on or before completion and
- b) they release any right(s) they may have in the property or any chattels in it.
You should include a clause to cover these points. Consequently, you should include them as a third party (Occupier)
What is the contract rate?
The “Contract Rate” is used to work out how much compensation is payable if completion happens after the Completion Date as a result of the Buyer being at fault.
It should not be too high as it risks being found unenforceable as a penalty - 5% is a commercially acceptable upper limit for the seller’s solicitor to include in the first draft of the contract.
If the contract rate is left blank, what happens?
If this was left blank, the SCS provide for the Law Society’s interest rate to be paid which is currently 4% above Barclays Bank’s interest rate. (Law Society interest rate)
If the contract is drafted such that the seller has to insure after exchange what obligation does SCS 5.1.2 impose?
Obligations on the seller to maintain the policy and to cancel it on completion.
What deposit is anticipated by the SCS?
How can this be amended in a contract?
The SCS anticipate a deposit of 10% and if that is not the case, SCS 2.2.1 needs amending.
In the standard form SCS, for example, this wording is used to vary a standard condition “Condition [X ] shall take eect as if the [amount] specified in it was [ X]%”.
How is title deduced according to the SCS?
How can this be altered?
The SCS work on the basis of title being deduced to the buyer after exchange.
If title has been deduced before exchange you expressly exclude SCS 4.1, 4.2 and 4.3.1.
Provide an example of an occupiers consent clause
The Occupier agrees with the Seller and Buyer, in consideration of their entering into the contract, that the Occupier concurs in the sale of the Property on the terms of this contract, undertakes to vacate the Property on or before the Completion Date and releases the Property and any included fixtures and contents from any right or interest that the Occupier might have.
What is the best way to alter the completion time from the SCSs 2pm default?
“Conditions 6.1.2 and 6.1.3 shall take effect as if the time specified in them were [ X] rather than 2.00 pm”.
You are drafting a TR1 Deed
The property is unregistered
What do you insert in panel 2 ‘property’?
Describe the property as it was set out in the root of title document and if only part of the property is being sold, refer to a plan.
You are drafting a TR1 Deed
The property is registered
What do you insert in panel 2 ‘property’?
Insert the address of the Property as written in the Property Register
You are drafting a TR1 Deed
What do you insert in panel 3 ‘date’?
The TR1 is not to be dated yet as it is a draft version.
The TR1 will be dated on the actual completion day.
You are drafting a TR1 Deed
What do you insert in panel 4 ‘name of transferor’ if you are instructed to act on the purchase of a property which was originally co-owned by two individuals and one of the co-owners passes away.
It was jointly owned.
If the co-owners were joint tenants, then the surviving joint tenant would be able to sell the property on their own according to the rule of survivorship.
Accordingly, their name alone will be stated in this panel.
You are drafting a TR1 Deed
What do you insert in panel 4 ‘name of transferor’ if you are instructed to act on the purchase of a property which was originally co-owned by two individuals and one of the co-owners passes away.
It was owned as tenancy in common.
If the co-owners were tenants in common, then the surviving tenant in common would need to appoint a second trustee.
This would mean inserting the name of the surviving tenant in common and the second trustee
You are drafting a TR1 Deed
What do you insert in panel 8 ‘purchase price’ if you tick the monetary consideration box?
The purchase price paid in** both words and figures** must be entered into this panel.
You should also specify whether the price is inclusive or exclusive of VAT.
If exclusive of VAT, you should have add the words, “plus VAT of [insert the amount of VAT payable]” after the purchase price.
You are drafting a TR1 Deed
The purchase price is exclusive of VAT.
How do you record this?
If exclusive of VAT, you should have add the words, “plus VAT of [insert the amount of VAT payable]” after the purchase price in panel 8.
You are drafting a TR1 Deed
The purchase price is inclusive of VAT.
How do you record this?
If inclusive of VAT, you should have add the words, “inclusive of VAT” after the purchase price in panel 8.
You are drafting a TR1 Deed
The property is sold by a bank which has re-possessed the property
What title gurantee do you give in panel 9?
Limited Title Guarantee
This is because the property is sold sold by a party who was not the registered owner
You are drafting a TR1 Deed
The property is sold by a Personal Representative
What title gurantee do you give in panel 9?
Limited Title Guarantee
This is because the property is sold sold by a party who was not the registered owner
You are drafting a TR1 Deed
The charges register shows a positive covenant and chain of indemnity. The SCPC is incorporated.
What must you do in panel 11?
If the property is burdened by a positive covenant and the transferor gave an indemnity, if SCPCs were incorporated into the sale contract then the transferee must covenant in the TR1 to indemnify the transferor against liability for any future breach of that obligation and covenant to perform it from the date of the TR1
This indemnity covenant should be inserted in panel 11
You are drafting a TR1 Deed
When must the transferor execute?
A TR1 will always need to be executed by the transferor
You are drafting a TR1 Deed
When must the transferee execute?
The transferee must also execute if there:
(a) Are transferee’s covenants or declarations or applications in the TR1; or
(b) If there is more than one transferee and panel 10 of the TR1 has been completed.
You are drafting a TR1 Deed for a company.
What is the default company execution clause?
Executed as a deed by (name of company) acting by [a director and its secretary] or [two directors]
Signature of Director:…………………………..
Signature of [Secretary/[Director]: ………………………..
Formula: Signature of Director; Signature of Director or Secretary
You are drafting a TR1 Deed for a company.
What execution clause should you use if there is only one director available?
Executed as a deed by (name of Company) acting by a director
In the presence of:
Signature of Director:……………………….
Signature of witness::……………………….
Name (in BLOCK CAPITALS)::……………………….
Address::……………………….
Formula: Signature of Director; Witness signature; Witness name; Witness Address
