PP weak areas (SQE 2)

Question 1

What is caveat emptor?

What are the 2 exceptions?

Answer 1

Buyer beware - buyer takes the property as they find it

1) misrepresentation (cannot mislead buyer by concealing physical defects are answering Qs dishonestly
2) latent encumbrances (something which is not apparent, or cannot be discovered, when inspecting the property) and title defects (brings into question seller’s ownership, or rights and burdens that affect property)

Question 1

Structure to show good root of title?

Answer 1

Adequately describes extent of property (e.g. scale plan)
Be dated more than 15 years ago (sale conveyance or legal mortgage preferable to gift or assent)
Casts no doubt on seller’s title (e.g. power of attorney)
Deals with legal and beneficial title (if silent then beneficial title assumed. If bare legal title or legal title only or declaration of trust - not a good root)

Question 2

When investigating unregistered title, what deeds must be sealed?

Answer 2

If dated before 1 July 1990 (wax or paper disc)

Question 3

When can you assume seller who is a surviving co-owner was a beneficial joint tenant?

Answer 3

1. Conveyance from seller to buyer states seller is beneficially entitled to whole property
   2.No memorandum of severance written to, or attached to, conveyance to seller
2. No bankruptcy order or bankruptcy petition registered against seller

Question 4

What 4 standard pre-contract searches are there?

Answer 4

Local Search: enquiries of local authority (CON29) & search of local land charges (LLC1)
Drainage and Water Enquiries: public sewers & whether property is connected to a mains water supply
Desktop Environmental Search: indicates if land has been used for potentially contaminative uses; likelihood of flooding; natural subsidence; industrial land uses within 250m
Chancel Repair Liability: for properties in parishes

Question 5

What does the CON29 standard enquiries of local authority reveal?

Answer 5

Planning consents, refusals & completion notices
Building regulations
Roads & public rights of way: whether roads adjacent to property are adopted
NB Highways Search: exact boundary between property and highway
Contamination: whether local authority has served a notice regarding contaminated land - consider this with Desktop Environmental Search

Question 6

What does the LLC1 search reveal?

Answer 6

Whether planning permissions or consents have been granted
If the property is in a conservation area
Tree Preservation Order
Smoke control order
Listed Building Charge

Question 7

When is a Cheshire Salt search necessary?

When is an Environmental Phase 1 Survey necessary?

When is an Environmental Phase S Survey Necessary?

What is a Flood Search?

When is a utility providers search necessary?

Answer 7

Property is in area that could be subject to brine subsidence

More detailed than a desktop environmental search, including a site inspection

Where the Phase 1 Survey indicates a risk of contamination

Reveals whether there have been floods in the past

Property is a new development or a site for development
Checks whether the site has benefit of utility providers

Question 8

What is a Index map search (SIM)

Answer 8

Where property is unregistered, or comprises more than one title (reg or unregistered), or reg title refers to mineral rights

The index map search shows the extent of registered titles and unregistered land within the area searched.

Question 9

What is a certificate of lawfulness?

Answer 9

Confirms where work does not constitute development or falls within GPDO

Question 10

When is planning permission required?

When is building regulations approval required?

Answer 10

When development on land, unless:
-only affects interior
-do not materially affect external appearance
-same use class

Applies to building work:
-erection or extension of building
-installation or extension of service or fitting controlled under building regs (e.g. windows or boilers)
-Work required where material change of use to whole building
Building Regs - relate to health and safety

Question 11

What is needed regarding a listed building?

Answer 11

Listed building consent

Question 12

When can solicitor act for both buyer and lender? When not? Why?

Answer 12

Residential transactions - risk of conflict is low

Comm - should not - more potential for conflict (interests will differ)

Question 13

In SCS and SCPC, who does risk pass to on exchange? meaning?

Answer 13

The buyer - if property is damaged or destroyed, buyer must still complete (should obtain insurance from exchange)

Question 14

What types of breaks clause are there?

Answer 14

Landlord break
Tenant break
Mutual break

Question 15

If a landlord consent to alterations under a qualified covenant, what will it be documented in? What does this contain?

Answer 15

Licence for alterations

Details of work consent to and time limits.
Contain tenant’s covenants
-carry out works in compliance with landlord’s requirements
-pay landlord’s costs in dealing with tenant’s app (e.g. surveyor and solicitor costs)
-Obtain necessary consent e.g. planning permission and building regs approval
-reinstate premises at end of lease term

Question 16

How to contract out security of tenure?

Answer 16

Landlord must serve warning notice on tenant

At least 14 days before completion = simple signed declaration
Less than 14 days before completion = statutory declaration (declared before an independent solicitor)

Question 17

What are 4 methods for termination of a lease?

Answer 17

Effluxion of time (lease ends at end of term - not protected tenancy (otherwise would hold over)

Notice to quit

Surrender (tenant gives up leasehold interest). - possible with protected tenancy. Express or implied by law (act in way that is inconsistent with continuation e.g. landlord accepts keys with understanding tenant vacating)

Merger - tenant acquires landlord interest or 3rd party acquires both

Question 18

What should an express surrender be made by?

What may need to be paid?

Answer 18

Deed

A premium

Premium paid by tenant to landlord is called a reverse premium

Question 19

If a buyer/seller delays completion, what can the other party also do?

Answer 19

Can claim damages (for contractual breach) - not usually cost effective (e.g. consider related purchases, if buyer whether seller have a house to move into - so not paying extra money while waiting)

Question 20

When would a K16 be carried out against a seller?

Answer 20

Only if the property was being sold below market value

Question 21

Why must a TIC or JT be decided before purchasing?

Answer 21

Land Registry will not register a property unless the check box regarding declaration of trust is complete specifying whether it is to be held as JT or TIC

Question 22

Give an overview of forfeiture for non-payment of rent

Answer 22

1. Consider whether there is a forfeiture clause
2. Has there been a waiver? (acts in a way which acknowledges the continuing existence of the lease)
3. Serve a formal notice for exact amount of rent due on the day it becomes payable, upon the premises, between the hours of sunrise and sunset (unless lease waives this requirement - ‘whether formally demanded or not’)
4. Exercise right - court order or peaceable re-entry (can only forfeit by re-entry if purely business premises) - court order reduces risk of legal challenge from tenant (but costs more and takes longer)
5. Relief - tenant apply for relief - likely to be granted if can settle all arrears and landlord’s costs

Question 23

Give an overview of forfeiture for other breaches

Answer 23

1. Consider whether forfeiture clause
2. Waiver?
3. s146 notice - specify breach complained of, require it to be remedied within a reasonable time (if capable of remedy - if not just give tenant enough time to consider position)
4. counter-notice - if granted for 7 or more years and has at least 3 years left to run can serve counter notice (then need leave from court)
   5.Exercise right
5. Relief: usually given on condition breach is remedied and tenant undertakes not to breach again

Question 24

What search priority search is carried out in the land is registered? unregistered?
Why are these carried out?
What is the point of priority period?

Answer 24

Search with priority on form OS1 or OS2 (or OS3 but no priority) - priority period of 30 working days
Updates official copies first provided and identifies any changes made.

Land charges search on form K15 against full name of seller and previous names listed on epitome - priority period of 15 working days. Identifies any incumbrances or other adverse matters registered against owner/seller

Priority - allow transfer to be registered in priority to any other interests

Question 25

What is the procedure following a s25, 26 or 27 notice?

What can be done during holding over?

Court order?

Answer 25

App to court:
s25: once served, either party may apply at any time to court to renew the lease (deadline is date of termination specified in notice)
s26: only apply after landlord served counter-notice (or 2 months elapsed from s26 notice) (deadline is day before proposed commencement date specified in notice)

Why would app to court be made?
-Friendly s25 or s26 notice will propose terms of new lease (usually try to agree these between themselves) - If unable to agree can apply to court

Court can grant:
-term up to 15yrs
-Rent will be open market rent
-Other terms determined by court having regard to terms of current tenancy and circumstances

During holding over:
-tenant will pay rent as last reviewed in lease
-Either party - can apply to court to fix interim rent (based on open market rent) (payable from earliest date which could be specified in notice e.g. 6 months)

Court order:
-either party may apply for order to grant a new lease (even if landlord opposed renewal) - tenant has 14 days to revoke order if not happy. New lease granted day after termination of existing lease
-Landlord opposing renewal (s25 or counter to s26) - may apply to court to terminate existing lease (if granted will terminate existing lease within 3 months and 21 days or order)