Property 1 - Freehold

Question 1

Caveat emptor - what is it + exception

Answer 1

Buyer be aware
The buyer takes property as they find it -> after exchange they cannot withdraw because they subsequently find a problem with the property
There’s no obligation on the seller to disclose any defects of the property
Exception: latent defects, which are not discoverable through reasonable inspection by the buyer, must be disclosed by the seller (example: a right of way is a latent defect that could potentially affect the buyer’s use or the property’s value, so the seller has a duty to disclose it)

Question 2

When is the last change for the parties to back out of selling/buying the property?

Answer 2

After contracts are exchanged the parties cannot back away from the day without consequences

Question 3

Surveys

Answer 3

Basic valuation (provides concerns for lender, but doesn’t give detail, cheap)

Homebuyer report (more detail, properties aged less than 150 yo in reasonable condition)

Full structural survey (where property is listed, undergone extensive renovation, or is very old, extensive alterations are planned; it’s expensive)

Question 4

Classes of title and what they mean

Answer 4

Title absolute (both freehold or leasehold) - no issues
Qualified title (both freehold or leasehold) - specific defect in the title (like deed known to contain covenants or easements was missing on first registration)
Possessory title (both freehold or leasehold) - physical possession but no title deeds or claimed through adverse possession (squatters rights) (this means the seller might not have full legal title and the buyer should consider obtaining title indemnity insurance)
Good leasehold title (only leasehold) - leaseholder cannot provide evidence of the landlord’s title to the land

Question 5

what to do if you know the seller has breached a covenant?

Answer 5

seller should provide indemnity policy at their expense

Question 6

what if you want yo buy a property with a covenant you want to breach in the future?

Answer 6

does it affect value or the buyer’s proposed use ?
If so -> insurance -> no -> consent from person with benefit -> no -> consider Lands Tribunal application to discharge the covenant, reduction in price or withdrawal from purchase

Question 7

Chain of indemnity for covenants

Answer 7

Example
The original owner sells the property to B. B gives the original owner an indemnity covenant. If the covenant is broken, then the original owner can sue B.
B sells the property to C. C gives B an indemnity covenant. If the covenant is broken, then the original owner sues B, who, in turn, sues C
If C sold to D but D didn’t give indemnity covenant then you can sue B who sues C, but C cannot sue D (so only B and C will be liable for the breach)
If at any point, the land has been transferred, and the seller has neglected to obtain an indemnity covenant, the chain of indemnity has been broken.
If there is a breach of covenant, then the original owner can still be sued, but the chain will only go as far as the last person to give an indemnity covenant.

Question 8

surviving beneficial joint tenant sells the property

Answer 8

If a surviving beneficial joint tenant is selling the property, then they should be asked to sign the contract and execute the transfer deed.
They should also provide a certified copy of the deceased joint tenant’s death certificate.

Question 9

surviving tenant in common sells the property

Answer 9

If a surviving beneficial tenant in common is selling the property, then they will need to appoint a second trustee (often their solicitor) to sign the contract and execute the transfer deed with them.

The buyer can take the property free from any beneficial interests provided:
* the property is transferred by at least two trustees
* the purchase price is paid in good faith
The buyer then overreaches the beneficial interests

Question 10

Root of title - what is it? what does it need to have?

Answer 10

Root of title - the particular conveyance that is used to show a good title to the property (usually the most recent deed that meets the requirements)
Dated more than 15 years ago
Deals with both legal and beneficial title
Adequately describes the land being conveyed (like has a scale plan)
Does not cast doubt on the seller’s title
Its used for unregistered land

Question 11

chain of title - what additional documents you should and shouldn’t include?

Answer 11

Included
Power to sign (power of attorney under which the root of title or any deed in the chain of title has been executed)
Death certificate of deceased co-owner (for transfers of ownership by death)
Mortgage deed created after the root of title, even if discharged (and vacating receipt - confirms that the lender has been repaid in full)

Excluded
Documents only affecting beneficial interest
Declarations of trust
Expired leases
Old Land Charges searches
Miscellaneous documents

Question 12

requirements of a validly executed deed

Answer 12

Clear that it is a deed (so must include a statement stating that in the deed)
Signed as a deed (and witnessed)
Delivered (by dating it)

Question 13

does covenants bind unregistered land?

Answer 13

Positive covenants only bind unregistered land if there is a chain of indemnity covenants

Positive covenants are not registerable as land charges

Restrictive covenants will only bind unregistered land if the burden is registered as a d(ii) land charge

Question 14

compulsory first registration ? - dates and what triggers it?

Answer 14

Compulsory first registration for sale - 1 December 1990

Compulsory first registration for gifts - 1998

On sale of gift of unregistered land since then the land needs to be registered (the buyer should insist the seller does it at its one expense)

Mortgaging a property triggers compulsory first registration if after 1990

Question 15

Classes of land charges - unregistered land

Answer 15

C(i) – puisne mortgage
C(iv) – estate contract
D(ii) – restrictive covenant
D(iii) – equitable easement
F – home right

Question 16

what is in LLC1 - local land charges search?

Answer 16

Local land charges
Debts against the property for work that the local authority has carried out (example: repair or demolish dangerous buildings at risk of public health)
Planning permissions granted
Planning enforcement or stop notices
Article 4 direction (restricting General Permitted Development Order)
Tree preservation order
Smoke control orders
Financial charges such as road-making charges
Conservation area
Listed building status
Historical buildings

Question 17

What’s in CON29

Answer 17

Planning consents granted + applications pending and refused (more info on this here than LLC1)
Building regulations approvals
Adopted roads and pavements
Public right of way
Environmental notices (such as contaminated land notice)
Whether roads are adopted highways (maintained by local authority at its expense)

Question 18

Desktop environmental search

Answer 18

Info on potentially contaminated land uses, likelihood of flooding, susceptibility to natural subsidence, industrial land use within 250 meters of the property
Based on historical records
Only gives into whether notices were served

Question 19

Chancel repair

Answer 19

risk of paying for repairing a church that’s nearby

Question 20

index map land charges

Answer 20

for unregistered title or where there’s multiple titles; checks all registered titles within the boundaries of the land or land subject to mineral rights

Question 21

Drainage and water enquiries (with relevant service company in the area)

Answer 21

Examples: foul and surface water from the property drain to a public sewer or whether the property is connected to a mains water supply

Question 22

coal mining search

Answer 22

Whether the property is in the area subject to coal mining
Risk of subsidence of coal mining

Question 23

Cheshire salt search

Answer 23

Area subject to brine subsidence

Question 24

Tin, clay and limestone search

Answer 24

specific for minerals

Question 25

waterways search

Answer 25

River or canal passing through or next to the property Obligations to maintain banks of river or waterway, liability for flooding, drainage and fishing rights NO info on flooding here

Question 26

Flood search - optional

Answer 26

Where property is known to have flooded in the past. Desktop flooding search goes into more detail than desktop environmental search

Question 27

phase 1 and 2 survey

Answer 27

Phase 1 survey - optional Site inspection Phase 2 survey - optional If phase 1 indicate possible contamination -> carry out phase 2 Taking soil and water samples

Question 28

utility searches

Answer 28

Electrocity, gas, telecommunication Do when property is a new development or a site for development

Question 29

When do you need a planning permission + exceptions

Answer 29

Planning permission Planning permissions required for ‘development’ Development includes certain building works on land or material change of use - change of one class of use to a different one Exceptions building works that only affect the interior of the building; or building works that do not materially affect the external appearance of the building; or changes of use that are within the same use class Class of use sui generis - doesn’t belong to any class so need permission always (like theatre, fuel station, amusement arcades, laundrette, pubs and nightclubs)

Question 30

General Permitted Development Order + article 4 - what do they mean

Answer 30

Permitted development within the General Permitted Development Order - then NO planning permission needed Local authorities can disapply parts of the GPDO by making an Article 4 direction -> then you need planning permission Conservation area (usually) -> Article 4 direction -> onerous planning conditions and planning permissions granted

Question 31

listed building consent and planning permission in conservation areas

Answer 31

Listed buildings - special architectural or historic interest -> listed building consent is needed to alter, extend or demolish those Conservation areas are areas of special historic or architectural interest, the character or appearance of which it is desirable to preserve or enhance restricted GDPO so changes to external appearance may require planning permission any alterations to a listed building, including replacing windows, require listed building consent

Question 32

When do you need a building regulation approval?

Answer 32

External or internal works Erection or extension of a building Installation or extension of a service or fitting that is controlled until building regs (like windows, boilers) Work required where there is a material change of use for the whole building Structural integrity of the building, fire escape, water supplies, stairways Building regulation approval and certificate of compliance

Question 33

where to check if planning consents have been obtained?

Answer 33

Planning permission obtained? - LLC1 (or Con29) Building regulation approval and completion certificate obtained? - CON29

Question 34

solutions for breaches of planning controls

Answer 34

Planning permission (make seller do it) Indemnity insurance Retrospective planning permission Comply with the condition Building regulation (make seller do it) Indemnity insurance Regularisation certificate - retrospective approval of the works Remedial work if necessary

Question 35

Law Society Conveyancing Protocol

Answer 35

Aims to make the conveyancing process more efficient and transparent observance of the Protocol is voluntary except for conveyancers who have the Conveyancing Quality Scheme accreditation Breaches of the Protocol can lead to removal from the Conveyancing Quality Scheme Buyer’s solicitor should only make enquiries that are essential to act in their client’s best interests (if not then ​he Law Society may require an explanation and potentially monitor or remove the solicitor from the Conveyancing Quality Scheme) A solicitor may breach the Protocol if they: * use non-Protocol ‘standard’ enquiries indiscriminately * raise enquiries that seek the seller’s opinion rather than fact The seller’s solicitor does not have to deal with any enquiries that do not comply with the Protocol (example: if they get a lot of unnecessary questions they should inform the buyer’s solicitor that the enquiry does not comply with the Protocol and that they will not respond)

Question 36

Does covenants bind registered land?

Answer 36

Restrictive - binds and passes with the land Positive - its personal so does not bind the land (it only binds the person making the agreement), unless there is an indemnity covenant chain then they can recover from the next person in the chain who also gave them an indemnity covenant

Question 37

CPSE 1 enquiries from buyer to the seller - contents

Answer 37

responsibility for boundaries, and their extent rights benefiting and burdening the property access to the property physical condition contents utilities and services planning and building regulations occupiers and employees notices and disputes Value Added Tax (VAT) treatment

Question 38

Title guarantees + what they mean

Answer 38

Limited title guarantee - little knowledge of the property, no incumbrances have been created over the property during the seller’s period of ownership Full title guarantee - property is free of all incumbrances other than those disclose in the contract, and those which it didn’t and couldn’t reasonably have known about No title guarantee - the seller does not guarantee the seller’s right to sell the property or that the property is free of incumbrances

Question 39

VAT - when do you need to pay it and when you don't

Answer 39

Residential - usually exempt Commercial - more complicated The default position under SCPC is that the property is a standard rated supply, meaning that VAT is payable at the normal rate (currently 20%) on top of the purchase price. 3+ yo + no option to tax chosen -> exempt option to tax or 3yo or younger -> pay 20% tax rate If they have occupational tenants they need to charge them VAT on their rent as well if the commercial property needs to pay VAT Note: rental income is VAT exempt so no VAT payable either from the buyer or the seller Note: newly developed residential buildings are zero-rated supplies for VAT purposes. Zero-rated means that no VAT is payable by the buyer, but the developer can recover any VAT they have incurred in the development process. Since the purchase price is inclusive of VAT, the buyer does not need to pay any additional VAT beyond the agreed £500,000

Question 40

time of completion by default

Answer 40

2 pm by default 20 working days after the contract date

Question 41

when does the risk for the property passes from the seller to the buyer?

Answer 41

Risk passes to the buyer at the exchange of contracts so the buyer should insure the property form the moment of exchange

Question 42

‘time is not of the essence until a notice to complete is served’. - effect of this on completion

Answer 42

if its not included then you can get damages but not walk away if this is included and completion does not happen within the specified date than the party can walk away and get damages

Question 43

what happens to the deposit if completion does not happen on time?

Answer 43

If the parties agree a lower deposit, but the buyer doesn’t complete on time and the seller serves notice to complete, the buyer must immediately pay the balance of the 10% deposit (unless this provision is also amended by special condition).

Question 44

holding the deposit as a stakeholder vs agent

Answer 44

Stakeholder - it means that the seller’s solicitor must keep the deposit safe and not pay it to the seller until completion. Agent - the seller may demand the deposit immediately after exchange. Both SCS and SCPC therefore provide for the deposit to be held as stakeholder.

Question 45

why drafts the transfer deed?

Answer 45

buyer

Question 46

who executes the transfer deed?

Answer 46

Who executes ? seller (always) (in the presence of an independent witness who also signs) Buyer only executes as well if there is an indemnity covenant or other obligations on part of the buyer Buyer also executes if they are tenants in common or agree to hold the property on trust

Question 47

forms for deeds for transfer of land

Answer 47

TR1 - transfer of the whole of a freehold + unregistered land TP1 - transfer of part only of a registered title

Question 48

when is the transfer/deed considered delivered?

Answer 48

when its dated

Question 49

ways in which a company can execute a deed

Answer 49

Company seal attached in accordance with the company’s articles of association, eg, a signature by one or two authorised signatories No company seal, but signed by two directors or one director and the company secretary Signed by one company director and witnessed by an independent witness Signed by a senior employee (not a director or the company secretary) who is authorised under a power of attorney

Question 50

pre-completion searches

Answer 50

Search with priority (OS1 search) Search against title number at Land Registry From date of official copies priority period of 30 working days (priority over any applications even if they predate this one) from application Need to apply for the priority within 30 days, if not u can apply again but it will not take priority over applications made before Land charges search (K15) Against full name of seller Priority period of 15 working days from completing the transaction within that time Solvency search (K16) If you act both for lender and buyer Against full name of client Priority period of 15 working days Company search If the seller is a company Against company name of seller No priority period

Question 51

requisitions on title + examples

Answer 51

Requisitions on title - questions that the buyer’s solicitor needs answering before completion examples - collecting keys, mortgages confirmation that completion will be according for Formula B, account details for transfer of money

Question 52

Delay or failure to complete - consequences

Answer 52

Interest is payable for each day of delay Buyer pays interest on the purchase price less any deposit paid Seller pays interest on full purchase price Example of delay Completion time 2 pm Friday Actually completes at 3:30 om It is then treated as being completed on a Monday So 3 days of interest payable (Saturday, Sunday, Monday) Non-defaulting party can claim for reasonable expenses (like if there were to be homeless because of the delay and then they get a hostel they can claim reasonable expenses for the hostel) Defaulting party fails to complete on time -> notice to complete served on completion day -> makes time of the essence -> 10 working days to complete from the day after the notice is served (binding on both parties) Interest calculation includes non-working days Buyer’s failure to comply with notice to complete -> then seller may Forfeit and keep deposit and accrued interest Resell the property and contents Claim damages Seller’s failure to comply with notice to complete -? then buyer may Rescind the contract (put parties back in a position in which they were before the contract was made) Require the return of the deposit with accrued interest Claim damages

Question 53

what do you need to do post-completion?

Answer 53

SDLT or LTT 14 for SDLT from completion (to avoid penalty) 30 days for LTT from completion (to avoid penalty) Registration of charge at Companies House 21 calendar days of the creation of the charge - strict deadline -> if not the charge is void and the lender is not protected Application for registration at the Land Registry AP1 form - the title is already registered FR1 form - unregistered land 30 days from OS1 search Unregistered application must be made within 2 months or the transaction is void

Question 54

when must a solicitor send the transfer deed to the buyer?

Answer 54

The solicitor must send the transfer deed and other documents to the buyer's solicitor as soon as possible, and no later than the end of the next working day after completion

Question 55

What must the solicitor do to comply with the obligations under the Code regarding the seller's mortgage?

Answer 55

under the Law Society Code for Completion by Post, the seller's solicitor is obligated to redeem the mortgage and provide the discharge documentation (such as Form DS1 or electronic discharge) to the buyer's solicitor promptly (no need to wait for the lender to confirm receipt)

Question 56

what is the interest rate under SCPC for delayed completion?

Answer 56

The buyer must pay the contract rate which is the Law Society's interest rate from time to time.

Question 57

OS1 - What are the implications of the solicitor failing to register the transfer within the priority period?

Answer 57

The buyer’s transfer may lose priority to any other interest or charge registered after the priority period expire

Question 58

what is OS 1 registration period?

Answer 58

30 days

Question 59

what is SDLT pay period + consequences

Answer 59

14 days from completion fine

Question 60

registration of a charge - time limit + consequences

Answer 60

21 days form creation of the charge charge being void against administrator or liquidator

Question 61

search for registered title of part?

Answer 61

OS2

Question 62

what to do if you failed to register a charge within the specified period?

Answer 62

Apply to the court for an order to extend the registration period; if granted, the charge will be valid against the administrator and other creditors