PP Flashcards
(118 cards)
1
Q
What is the principle of ‘Caveat emptor’?
A
Buyer beware. Responsibility rests with the buyer to inspect and be satisfied.
2
Q
What is the average timeline for a residential property transaction?
A
2 months (6-8 weeks)
3
Q
What must a buyer’s solicitor obtain before completion?
A
Mortgage funds
4
Q
What is the percentage of deposit paid upon exchange of contracts?
A
10%
5
Q
What does SDLT stand for?
A
Stamp Duty Land Tax
6
Q
What is Private Residence Relief (PPR)?
A
Exemption on private property (residential) from Capital Gains Tax (CGT).
7
Q
In a residential situation, can you act for both the lender and the buyer?
A
Yes
8
Q
In a commercial situation, can you act for both the lender and the buyer?
A
No
9
Q
What is required to check the status of unregistered land?
A
SIM Search (Index Map) to check if the land is unregistered.
10
Q
What is the mandatory requirement for signing the transfer deed?
A
Seller always signs; buyer only sometimes.
11
Q
What is a ‘Special Resolution’?
A
Must be filed and sent to Companies House within 15 days.
12
Q
What is the purpose of the Land Charges search?
A
To check there are no binding interests on the unregistered land.
13
Q
What must the root of title cover?
A
Go back at least 15 years, cover legal + beneficial title, adequate description.
14
Q
What is the maximum time limit for updating enquiries?
A
Every 2 months.
15
Q
What is the consequence of not complying with planning permission?
A
Non-compliance can result in fine and local authority intervention.
16
Q
What is a ‘Certificate of Title’?
A
A document to persuade a lender regarding the title’s quality.
17
Q
What happens if a seller cannot guarantee title?
A
No title guarantee may be offered.
18
Q
What is the role of the buyer in pre-completion?
A
Buyer pays the full balance and exchanges necessary paperwork.
19
Q
What type of searches are mandatory in property transactions?
A
- SIM search
- Land Charges search
- Central Land search K15
- Bankruptcy search K16
20
Q
What is the full title guarantee?
A
Property is free of all incumbrances except those disclosed.
21
Q
When is planning permission NOT needed?
A
For interior changes and immaterial changes.
(Because permission is needed for external and material changes)
22
Q
What is required for changes to listed buildings?
A
Consent is always needed for both internal and external changes. (Historic England)
23
Q
What must be included in the contract for mortgage dealings?
A
Check seller has enough funds to clear the mortgage.
24
Q
What is the standard completion time if nothing else is agreed?
A
2pm Friday, 20 working days after contract finalization.
25
What happens when a mortgage is paid off?
Request for a 'vacating receipt' from the seller's solicitors.
26
What do you need to do if you opt for a non-standard tax?
Amend the Standard Commercial Property Conditions (SCPCs).
27
What must the buyer do regarding utility providers?
Conduct enquiries about utility providers.
28
What is the purpose of the 'Indemnity Covenant'?
Makes successors contractually bound and opens them to being sued.
29
What is the requirement for a second trustee in co-ownership?
To ensure overreaching occurs and the buyer takes free of equitable rights.
30
What is the main objective of the pre-contract searches?
To uncover any issues that may affect the property transaction.
31
What is the consequence of the rule against double relief in property transactions?
Only one property will qualify for Private Residence Relief if there is a couple with two houses.
32
What document must be submitted post-completion?
TR1, SDLT5, Buyer’s mortgage/charge, and Certificate of Registration of the Charge.
33
Who assumes risk and duty of insurance after an exchange?
A signed contract passes risk to the buyer.
34
What are the key components of the Residential Law Society’s Conveyancing Protocols?
* Clause 1 - incorporating clause
* Clause 2 - full title
* Clause 3 - fixtures list
* Clause 4 - vacant possession
* Clause 5 - default completion time
* Clause 6 - exclude fraud and reckless representations
* Clause 7 - under 18s occupiers must vacate
35
What are the Standard Commercial Property Conditions (SCPC) conditions?
* Condition 2 - standard 20% VAT rate
* Condition 3 - tick for limited title guarantee
* Condition 6 - stipulate deposit & payment
* Condition 8 - specific terms annexed
* Condition 9 - VAT or capital allowances & rights of tenants
36
What formalities are required for a property contract?
* Writing
* All terms included
* Signed by parties
37
What is the implication of exchanging contracts without a deed?
Land CANNOT be transferred by contract; it requires more.
38
What types of losses can occur during property transactions?
* Losses pre-exchange = expectation
* Losses post-exchange = significant financial losses
39
What is the role of solicitors in exchanging contracts?
* Seller prepares CONTRACT bundle and H.O.T
* Buyer prepares TRANSFER DEED
40
What does 'engrossment' refer to in property contracts?
Final copy of the contract is signed and sent to the buyer.
41
What governs the exchange of contracts?
Law Society Formula B.
42
What documents are needed post-exchange?
* Memorandum of exchange
* Certificate of Title to persuade lender
* Copy of signed contract
* Risk to buyer
* Removal vans
* Meter reading
43
How do you deal with equitable interests post-exchange?
* Registered land: Notice of equitable interest
* Unregistered land: Land Charge C(iv)
44
What is required for completion in registered land?
* TR1 for whole freehold
* TP1 for sale of a part
* TR5 for portfolio of registered titles
45
What is the significance of the TR1 form?
It is needed for registered property and is a unilateral act.
46
What must be done at the execution of the TR1?
Transferor always signs; Transferee signs under specific conditions.
47
What is the TA13 Form used for?
It asks for details of the bank account to send completion monies into.
48
What are pre-completion searches?
* Searches tailored to property and/or parties involved
* Solvency search confers 15 days priority
49
What is the deadline for registering a mortgage charge in commercial transactions?
Must be registered within 21 days.
50
What are the residential SDLT rates?
* No tax on first £250,000
* £250k - £925k at 5%
* £925k - £1.5m at 10%
* Above £1.5m at 12%
51
What is the First-Time Buyer Relief limit?
Up to £425,000 for residential properties.
52
What triggers Capital Gains Tax (CGT)?
* Chargeable disposal
* Chargeable asset
* Chargeable person
* Chargeable gain (- allowable expenditure)
53
What are key rules regarding CGT?
* Death is NOT a disposal
* Transfers between spouses generally do not attract CGT
* Private residences are generally exempt
54
What is the purpose of a Notice to Complete?
Serves 10 working days to complete; both parties become notice-bound.
55
What does the COMP acronym stand for?
* C - Completion & Undertakings
* O - OS1/OS2
* M - Moneys
* P - Purchase Deed TR1
56
What are the prerequisites of a lease?
* Exclusive possession
* Fixed term & tenancy
* Formality (varies by duration)
57
What is a break clause in a lease?
A provision allowing termination of a lease.
58
What is 'rent proper'?
The actual lease price.
59
What are the features of an FRI lease?
* Payable in advance
* Payable quarterly
* Must be an express term of payment due
60
What is the traditional payment deadline for FRI leases?
* 26 Dec to 24 March
* 25 March to 23 June
* 24 June to 28 September
* 29 September to 24 December
61
What factors are considered for a rent review?
* Comparable premises
* Hypothetical lease
62
What must a tenant do after leaving a property?
Restore property to a blank canvas if reasonable.
63
What is the tenant's responsibility in a lease of a whole?
Usually responsible to repair everything.
64
What is the typical responsibility of a tenant in a Full Repair lease?
The tenant is usually responsible to repair everything, covering all aspects of the property.
## Footnote
This includes structural repairs as stated in FRI leases.
65
In a Lease of a part, what is the tenant responsible for?
The tenant is only responsible for the interior of their proportionate share.
## Footnote
Service charges still apply.
66
Who is responsible for common parts in a lease?
Only the landlord is responsible for common parts.
## Footnote
Common parts include hallways, lifts, staircases, and communal car parking.
67
What are the exceptions to the repairing covenant for both whole and part leases?
* Forever exception: not responsible for renewal/subsidence
* Temporary exception: not responsible for structural repairs or inherent defects in newly built properties.
68
What does the term 'repair' mean in the context of a lease?
To 'put them back' into good repair by the end of tenancy.
69
What is the purpose of insurance rent/premium in FRI leases?
It is a recovered contribution from the tenant for the landlord's insurance purchases.
70
How do co-tenants contribute to the insurance premium?
Each tenant will refund their proportionate share of their part.
71
What is the RICS Code for Leasing Business Premises (2020) aimed at?
It applies for landlord-tenant negotiations for RICS regulated members and will apply for most commercial lettings.
72
List the key elements that the RICS Code emphasizes.
* Fairness
* Comprehensiveness
* Good practice
* Process focus
73
What are the mandatory requirements of the RICS Code?
Must follow the mandatory requirements.
74
What is the purpose of 'Heads of Terms' in the RICS Code?
To outline key lease provisions such as extent, length, rent-review, repair, assign, and permitted use.
75
What is the formula for apportioning rent?
Yearly rent/365 = SUM; SUM x daily = Quarter rent.
76
What is the significance of a landlord's title in lease agreements?
It is necessary to obtain any consent needed and affects the registration process.
77
What does section 19(3) of the lease act state?
Landlord cannot charge a lump sum or rent increase merely for granting permission for change of use, unless it involves structural changes.
78
What is the distinction between absolute, qualified, and fully qualified alteration covenants?
* Absolute: 'shall not' use the property for any purpose except as consented by the landlord
* Qualified: 'shall not...without the landlord's consent'
* Fully Qualified: consent not to be unreasonably withheld or delayed.
79
What is required for a tenant to request improvements or alterations?
* Serve notice to make improvements
* Request for landlord’s consent
* Apply to court if consent is refused.
80
What is the importance of obtaining planning permission and building regulations before alterations?
It is necessary to ensure compliance with legal requirements.
81
What is the process for registering leases over 7 years?
Registration is required, and a deed is needed.
82
What is the SLDT and LTT tax structure in England and Wales?
SLDT: up to 150k - no tax; LTT: up to 225k - no tax.
83
What does the acronym COLM stand for?
* Completion Statement
* OS2/OS3
* Leasehold specifics.
84
What is the role of an Assignment in lease agreements?
The new tenant is entitled to exclusive possession, and the original tenant is released from liability.
85
What is an AGA in the context of lease assignments?
A tenant (assignor) guarantees the obligations of the incoming tenant (assignee).
86
What is the key distinction between a grant of a lease and an assignment?
The assignee usually takes the lease as is, with limited scope for negotiation.
87
What is the significance of a Deed of Assignment?
It formalizes the assignment and is prepared by the assignee’s solicitors.
88
What is the process of completion in lease assignments?
Parties confirm completion, date the license, and finalize the Deed of Assignment.
89
What is involved in the three-party phone completion process?
Confirm completion and date the license
## Footnote
This involves the tenant's solicitors and assignee's solicitors dating the Deed of Assignment.
90
Who is responsible for paying the relevant SDLT or LTT post-completion?
The assignee
## Footnote
The assignee's solicitor also registers the assignment and sends a formal Notice of Dealing.
91
What is the key rule for underleases?
An underlease must be shorter than the main lease, even if by a day.
92
What presumption does silence create regarding authority to underlet?
Silence creates the presumption of freedom to do whatever.
93
What requirement do commercial leases impose regarding sub-leases?
Consent from the landlord is required.
94
Can a landlord enforce any covenants against a sub-tenant?
No.
95
What is the solution if a landlord cannot enforce a covenant against an undertenant?
The subtenant can enter into a separate contract to covenant directly with the landlord.
96
What does the consent application for underletting need to set out?
Credit checks and references required of a prospective tenant.
97
Who normally drafts the underlease during pre-exchange?
Tenant’s solicitor.
98
What happens if the parties are ready to complete for an underlease?
There is no need for the agreement for underlease.
99
What is the purpose of the OS1 search?
To underlet a whole or part.
100
What occurs during the completion phase for the license to underlet?
All parties date the License to Underlet.
101
What must the tenant's solicitor do post-completion for the underlease?
Send a Notice of Dealing for the Underlease.
102
What are common elements in licenses for both assignment and underletting?
Consent from landlord, tenant pays costs, assignee or under-lessee covenants directly with landlord.
103
What unique feature does the License to Assign have?
The current tenant guarantees the assignee’s performance.
104
What does the Notice of Dealing signify?
It gives the landlord notice that the transaction has been completed.
105
What must be sent within a month of completion for both assignment and subletting?
Formal notice.
106
What is one type of alienation method mentioned?
Assignment.
107
What is 'Security of Tenure' in business tenancies?
A statutory right for tenants to remain in occupation and renew their lease.
108
What are the requirements for security of tenure under s.23?
A tenancy, tenant must be in control, must be for business purposes.
109
What types of tenancies are excluded from the scope of business premises?
Fixed-term tenancies less than 6 months, tenancies at will, certain service tenancies.
110
What are the stages for contracting out procedures?
Notice, declaration, and references.
111
What options do landlords have if the tenant has security of tenure?
* Serve s.25 notice
* Forfeit the lease
* Surrender the lease.
112
What options do tenants have if they have security of tenure?
* Vacate premises
* Serve s.27 notice
* Serve s.26 notice
* Surrender the lease.
113
What is the legal rule for a landlord's notice to end and recover lease?
Can be served between 7-11 months before the current lease ends.
114
What are mandatory grounds for opposing renewal under s.25?
* Persistent breach of repairing obligation
* Intent to demolish or reconstruct.
115
What is the rule for a tenant’s notice to leave the premises under s.27?
Must give a period of 3 months minimum notice.
116
What is the minimum notice period for a tenant requesting renewal under s.26?
6 months.
117
When can a landlord serve a s.26 counter notice?
Within 2 months from the s.26 notice to renew.
118
What defines a competent landlord?
The owner of the reversionary interest.
