Property - Flashcards Full Deck
(188 cards)
1
Q
What is an easement?
A
A right allowing one party to use a portion of another party’s land for a specific purpose.
2
Q
What does “use as of right” mean?
A
It means using the benefit without seeking permission or making any payments.
3
Q
How can an easement be created by prescription?
A
A party must show unchallenged use for over 20 years and that the use was ‘as of right.’
4
Q
What is common law prescription?
A
If an easement has been used ‘from time immemorial,’ there is a rebuttable presumption of immemorial use after 20 years of unchallenged use.
5
Q
What is a lost modern grant?
A
The court will treat an easement as if there was once a grant if the claimant can show actual enjoyment for 20 years.
6
Q
What does the Prescription Act 1832 provide?
A
It provides a statutory means for acquiring an easement based on either 20 or 40 years of use, with specific provisions.
7
Q
What must happen for a legal easement over registered land?
A
It must be registered with the HM Land Registry (HMLR) to take effect.
8
Q
How is the benefit of an easement recorded?
A
It appears as a notice on the property register of the dominant tenement.
9
Q
Where is the burden of the easement recorded?
A
It appears as a notice on the charges register of the servient tenement.
10
Q
Why must easements created by prescription be registered?
A
They must be registered because they are considered a legal interest.
11
Q
What should a solicitor send to the client at the beginning?
A
A client care letter outlining services and costs.
12
Q
What identification must a solicitor obtain from the client?
A
Identification documentation and carry out due diligence.
13
Q
What should the buyer be advised to do regarding property inspection?
A
To have a surveyor conduct a physical inspection of the property.
14
Q
What tax advice should a seller receive?
A
Advice regarding capital gains tax.
15
Q
What must the seller provide to the buyer?
A
A valid energy performance certificate.
16
Q
What is the seller’s solicitor’s role in title investigation?
A
To investigate the seller’s title and resolve any defects in the title.
17
Q
What must the seller’s solicitor confirm with the seller?
A
The land being sold through a title map.
18
Q
What figure should the seller’s solicitor request from the lender?
A
An indicative redemption figure on the mortgage.
19
Q
What does the contract package include?
A
A draft contract, property information form, fitting and contents form, copy of the seller’s title, title map, guarantees or planning permissions, and any latent defects or burdens.
20
Q
What are the three parts of a residential contract?
A
(i) Particulars of Sale, (ii) Standard Conditions of Sale, (iii) Special Conditions of Sale.
21
Q
What does the deposit usually amount to upon exchange?
A
10% of the purchase price.
22
Q
What happens to risk and insurance at exchange?
A
Risk passes to the buyer on exchange; they should insure the property.
23
Q
What are the consequences if the property is damaged after exchange?
A
The buyer is still obliged to proceed with the transaction.
24
Q
What should the buyer’s solicitor do upon receipt of the contract package?
A
Investigate title and resolve any issues through pre-contract enquiries.
25
How can defects in title be resolved?
Through a deed of variation or deed of rectification; if not possible, indemnity insurance may be purchased.
26
What is the primary aim of the buyer’s solicitor when investigating a registered title?
To identify technical points, encumbrances, and the class of the seller’s title.
27
What are the three registers a solicitor examines at the Land Registry?
1. Property Register (address, type of estate, rights benefitting the land)
2. Proprietorship Register (class of title, who holds legal title)
3. Charges Register (records encumbrances and restrictions like mortgages).
28
What does the Proprietorship Register indicate?
The class of title (absolute, possessory) and who holds legal title (maximum of 4 trustees must hold legal title as joint tenants).
29
What is noted in the Charges Register?
Encumbrances and restrictions, such as mortgages and restrictive covenants. Not all registered titles will have a Charges Register, but most will.
30
What is the buyer’s solicitor looking for when investigating an unregistered title?
Whether there has been a triggering event (e.g., conveyance or grant of first legal mortgage) requiring registration and ensuring the seller registers the land before sale.
31
What does the epitome of title contain?
A chronological list of the documents of title with copies of the documents attached.
32
What defines a good root of title?
It must go back at least 15 years, cover the whole legal and equitable interest in the property, contain an adequate description, and cast no doubt on the title.
33
What is the purpose of the Local Search?
To identify local land charges, planning restrictions, tree preservation orders, and who is responsible for the upkeep of the road. It has two parts: (a) Search of Local Land Charges Register and (b) optional enquiries.
34
What does the optional Commons Registration Search reveal?
Whether the property abuts or is adjacent to a village green or common land, which is land designated for public use. Important for buyers due to restrictions on usage.
35
What is the aim of the Water and Drainage Search?
To establish whether the property is connected to the public water supply.
36
Why is an Environmental Search important?
To determine if the land is contaminated, which may impose cleanup obligations on the buyer.
37
What is the Search Index Map used for?
To reveal whether a title is fully or partially registered, particularly if the title is unregistered.
38
What does a Bankruptcy Search check?
It checks the buyer’s full name to ensure they will be able to obtain a mortgage.
39
What is the purpose of a Coal Mining Search?
To identify whether coal mining has taken place locally or formerly, which may affect the property.
40
When is a Company Search necessary?
If the seller is a company, to ensure the buyer is aware of any company-related issues.
41
Why is it important for the buyer to re-visit the property?
To look for any problems such as evidence of rights of way, any occupiers, and to check the physical condition of the property. If commercial, the buyer’s solicitor will send the seller a copy of the Commercial Property Standard Enquiries.
42
What is the purpose of planning law?
To restrict the development of land and ensure controlled building to prevent uncontrolled construction activities.
43
When is planning permission generally required?
For structural changes, mining operations, and any material change of use.
44
What is a Listed Building?
A building that requires planning permission for any kind of work, due to its historical or architectural significance.
45
What constitutes permitted development?
Minor internal works or specific projects that do not require planning permission because they are deemed to be automatically permitted under certain regulations.
46
What are the two types of express planning permission?
(i) Outline permission – for the general principles of development, and (ii) Detailed permission – for specific development proposals.
47
What is deemed planning permission?
Planning permission automatically granted under the 1990 Act for certain developments, such as small home extensions, unless the local authority disapplies these rights.
48
What happens if planning permission lapses?
Development must commence within 3 years of the date of permission; otherwise, the permission becomes invalid.
49
What actions can a local authority take for non-compliance with planning laws?
They can take enforcement action against the property owner, requiring compliance, which may include requiring demolition or reconstruction. Enforcement notices must be served within specific timeframes based on the type of breach.
50
What is the enforcement notice timeframe for unauthorized building works?
Must be served within 4 years of the breach.
51
What is the enforcement notice timeframe for material change of use?
Must be served within 10 years of the breach.
52
What can a local authority do to prevent unauthorized work?
They can apply for an injunction or issue a ‘stop notice’ to prevent ongoing work.
53
What is the enforcement period for Listed Buildings?
There is no enforcement cut-off period; breaches can be enforced at any time.
54
What are Building Regulations?
Separate from planning permission, these regulations ensure that buildings meet specific safety and construction standards. Compliance is required for all development work, even for minor work that may not require planning permission.
55
What is a Building Regulations completion certificate?
Issued by a building control officer upon satisfactory inspection of completed work, confirming compliance with building regulations.
56
What are use classes?
Classifications for commercial buildings that dictate what type of activities can occur within them; planning permission is typically required to change from one use class to another, but not for changes within the same class.
57
What are the two ways to fund a property purchase?
(1) Cash buyer: involves Anti-Money Laundering (AML) checks and establishing the source of funds and wealth. (2) Mortgage: involves borrowing from an institutional lender who takes a mortgage over the property as security for the loan.
58
What is required for a cash buyer in the conveyancing process?
AML checks and verification of the source of funds and wealth.
59
What happens when a mortgage is taken out by the buyer?
The lender takes a charge over the property, which appears on the Charges Register.
60
What is the typical deposit amount when purchasing a property?
Most buyers typically put down a 10% deposit.
61
Who usually acts for the lender in a mortgage transaction?
The buyer’s solicitor (BS) often also acts for the lender, which may create a conflict of interest. The BS can only provide generic advice regarding the mortgage.
62
Why is independent financial advice important for a mortgage?
A mortgage is a financial product, and clients need to understand their options and obligations before proceeding.
63
What are the four types of mortgages?
(i) Repayment Mortgage, (ii) Interest Only, (iii) Endowment, (iv) Sharia-compliant.
64
What is a Repayment Mortgage?
The borrower makes monthly repayments that include both capital and interest, ensuring the entire loan is paid off by the end of the term.
65
What is an Interest Only Mortgage?
The borrower only pays the interest on the loan during the term, with the capital due at the end, requiring alternative arrangements to pay off the principal.
66
What is an Endowment Mortgage?
A mortgage linked to a life insurance policy intended to pay off the mortgage balance when the policy matures, but has fallen out of favor due to insufficient payouts.
67
What is a Sharia-compliant mortgage?
A financing arrangement that adheres to Islamic law principles.
68
How must a mortgage be created?
A mortgage must be created by deed.
69
What is a Certificate of Title?
A document submitted to the lender confirming that the title is good and marketable, typically submitted 5-7 days before funds are required to release the mortgage advance.
70
What is the role of an occupier’s consent form in a mortgage transaction?
It confirms that non-owning occupiers (e.g., adult children living with the buyer) will vacate the property if the lender needs to repossess. They should seek independent legal advice.
71
What must be done post-completion regarding the mortgage?
The mortgage must be registered in the Charges Register within 30 days for registered titles and within 2 months for unregistered titles. If the buyer is a company, registration must also occur at Companies House within 21 days.
72
What happens if the registration deadline for a mortgage is missed?
If the registration deadline is missed, a court order must be obtained to register the charge.
73
What happens during the exchange of contracts?
The transaction becomes legally binding; neither party can back out without penalty, and the buyer risks losing their deposit if they fail to exchange.
74
When does the risk pass to the buyer?
The risk passes to the buyer upon exchange of contracts.
75
Can exchange and completion occur on the same day?
Yes, exchange and completion can take place on the same day, but this is often not the case.
76
What are the pre-exchange tasks for the seller’s solicitor?
Obtain the redemption figure for any existing mortgage, agree on the form of the contract with the buyer's solicitor, arrange for the seller to sign the contract, and send it to the buyer’s solicitor for signing.
77
What are the pre-exchange tasks for the buyer’s solicitor?
Report to the buyer, confirm the buyer wishes to proceed, confirm financing, arrange for the buyer to sign the contract, and obtain express authority to exchange.
78
What are the methods of exchanging contracts?
(1) Person, (2) Post, (3) Phone.
79
Describe the "Person" method of exchange.
Solicitors exchange contracts in person; this method is impractical and rare.
80
Describe the "Post" method of exchange.
Involves each solicitor posting their signed parts of the contract to one another; this method is no longer used due to lack of certainty.
81
What is "Formula A" for exchange by phone?
One solicitor holds both signed parts of the contract, usually the seller’s solicitor. Suitable if one solicitor will be out of the office.
82
What is "Formula B" for exchange by phone?
Each solicitor holds their client’s signed part of the contract, with the buyer's solicitor holding the deposit as cleared funds. Each solicitor confirms the contents and dates their part before sending it to the other side.
83
What is "Formula C" for exchange by phone?
Used for chains of transactions, involving a two-part telephone process to ensure certainty.
84
What should be done if completion is scheduled weeks after exchange?
The buyer's solicitor should register the estate contract on the Charges Register (for registered land) or register a C(iv) land charge against the seller’s name (for unregistered land) to protect the buyer’s position.
85
How should parties vary a contract post-exchange?
They should re-execute new contracts that include the new terms.
86
What is the first task for the seller's solicitor in pre-completion?
Apply to the lender for an up-to-date redemption figure calculated to the completion date (amount needed to pay off the mortgage).
87
What is a completion statement?
A document prepared by the seller's solicitor that shows all sums required from the buyer to complete the transaction.
88
What is the Completion Information and Undertakings Form?
A form completed by the seller's solicitor containing administrative information about the property, such as where to find the keys, sent to the buyer's solicitor.
89
What deed is typically used to transfer the whole land?
A TR1 form is used to transfer the whole land.
90
What deed is used to transfer part of the land?
A TP1 form is used to transfer a part of the land.
91
What is the first task for the buyer's solicitor in pre-completion?
Check the Completion Information and Undertakings Form received from the seller's solicitor.
92
What is submitted to the lender by the buyer's solicitor?
A Certificate of Title is submitted to the lender requesting the drawdown of the mortgage funds.
93
What is the Official Search with Priority (OS1 Form)?
A pre-completion search for registered title that updates the register for any new interests, preventing new interests from being registered after the search if the transaction is completed within the 30-working day priority period.
94
What is required for unregistered titles before completion?
A full land charges search against the full name of the seller, which must be completed within a 15-working day priority period; first registration must occur within 2 months of a triggering event.
95
What additional searches might the buyer's solicitor conduct?
A Bankruptcy Search (if the buyer is getting a mortgage), Company Search (if the seller is a company), and a physical re-inspection of the property.
96
What is the final task for the buyer's solicitor before completion?
Draft the Purchase Deed (TR1/TP1) and send it to the seller's solicitor for review and signature.
97
What happens on the day of completion?
The buyer's solicitor sends the balance of the purchase money to the seller's solicitor, and the seller moves out while the buyer moves in.
98
What is the deadline for completion under the Standard Conditions of Sale?
Completion must take place by 2 PM; otherwise, some rights to remedies may arise.
99
What is one method of completion that is considered rare?
Personal attendance, where the buyer's solicitor goes to the seller's solicitor's office in person to hand over the cheque and take possession of the deeds.
100
What is an agent method of completion?
Similar to personal attendance, but an agent from a different firm attends on behalf of the buyer's solicitor if the buyer's solicitor is based far away.
101
What is the most common method of completion?
Completion by post, where the seller's solicitor acts as an agent for the buyer's solicitor, and completion monies are sent by bank transfer.
102
When does legal title pass on completion for unregistered titles?
Legal title passes immediately on completion.
103
When does legal title pass on completion for registered titles?
Title passes when the buyer becomes registered at the Land Registry.
104
What happens to the contract upon completion?
The contract merges with the purchase, meaning the purchaser can no longer sue on the contract terms, resulting in fewer remedies available for breach.
105
What is the first task of the seller's solicitor after completion?
Report completion to their client.
106
What does the seller's solicitor do regarding the seller's mortgage?
Pay off the seller’s mortgage.
107
What financial responsibility does the seller's solicitor handle?
Pay the estate agent’s bill.
108
What must the seller's solicitor send to their client?
Send a bill for their own legal fees.
109
What is the final step for the seller's solicitor?
Close the file.
110
What is one of the first tasks for the buyer's solicitor post-completion?
Report completion to their client.
111
What must the buyer's solicitor send to the buyer?
Send a bill for their own legal fees to their client.
112
What must be registered if the buyer is a company that took out a mortgage?
Register the company charge with Companies House within 21 days.
113
What tax must the buyer's solicitor handle post-completion?
Stamp Duty Land Tax—submit the return to HMRC and ensure any tax is paid within 14 days of completion (threshold £125K).
114
What happens if the Stamp Duty Land Tax deadline is missed?
A penalty is payable, which increases the longer the tax remains outstanding.
115
What is required if the property is registered?
Register the title within 30 days of the date of the official search with priority.
116
What is the timeframe for registering title if it’s unregistered?
Register within 2 months if unregistered/first registration is required.
117
What is the first step in the leasehold conveyancing process?
Access identified by the solicitor.
118
What types of searches are conducted in leasehold conveyancing?
Pre-contract and pre-completion searches.
119
What is the purpose of pre-contract searches?
To uncover any potential issues affecting the property before the contract is finalized.
120
What is included in pre-completion searches?
Final checks to ensure no new encumbrances or issues have arisen since the pre-contract stage.
121
What must be reviewed in title documentation?
Issues in title documentation for both registered and unregistered leases must be assessed.
122
What distinguishes registered title from unregistered title?
Registered title is recorded at the Land Registry, while unregistered title relies on the documents of title that may require further examination.
123
Why is it important to identify issues in title documentation?
To resolve any defects or restrictions that could affect the buyer's rights or ability to occupy the property.
124
What must solicitors ensure regarding lease terms?
Solicitors must ensure that lease terms are clear, including duration, ground rent, and any obligations of the tenant or landlord.
125
What can complicate the leasehold process?
Issues such as sub-letting restrictions, service charge disputes, and compliance with lease conditions can complicate the leasehold conveyancing process.
126
What is a key consideration for buyers of leasehold properties?
Understanding the implications of leasehold ownership, including the rights and responsibilities outlined in the lease agreement.
127
Can a solicitor act for both buyer and seller?
No, it creates a conflict of interest.
128
Can a solicitor act for both buyer and lender?
Yes, if the lender is an institutional lender and the solicitor maintains client confidentiality.
129
What is required regarding deeds for unregistered land with a mortgage?
The seller's solicitor must not release the deeds until they can redeem the seller's mortgage on completion.
130
What happens if contracts are exchanged via telephone?
Both solicitors must send their own client's signed part of the contract to the other; the buyer's solicitor sends the buyer's 10% deposit to the seller's solicitor.
131
What undertaking must the seller's solicitor provide if there’s a mortgage?
They must undertake to redeem the seller's mortgage out of the sale proceeds on completion.
132
Why is client confidentiality important when acting for a buyer and lender?
It ensures that the interests of both the buyer and the lender are protected and that sensitive information is not disclosed between the parties.
133
What is the standard certificate of title?
A document provided by the solicitor to the lender, confirming that the title is good and marketable, usually in the context of a mortgage transaction.
134
What is the buyer entitled to if the seller's plan or statement is misleading?
Damages sufficient to put the buyer in the position they would have been in had the error not occurred.
135
Under what conditions can the buyer rescind the contract?
If there was a fraudulent or reckless error, or if the property differs substantially in quality, quantity, or tenure from what was expected.
136
What time is completion required under the Standard Conditions of Sale?
Completion must occur no later than 2pm on the specified day.
137
What happens if completion is delayed beyond 2pm?
It constitutes a technical breach, allowing the innocent party to claim interest at the contract rate.
138
When can the innocent party rescind the contract for a delay in completion?
Only if the contract specifies that time is of the essence or if they serve a notice to complete.
139
What does a notice to complete do?
It makes time of the essence, giving the defaulting party 10 working days to complete.
140
What happens if the buyer defaults and fails to complete within 10 days?
The seller may rescind the contract, keep the buyer's deposit, resell the property, and claim damages for losses.
141
What can the buyer do if the seller defaults?
The buyer may rescind the contract, reclaim the deposit with interest, and claim damages sufficient to restore them to their expected position.
142
What is "specific performance"?
An order requiring the breaching party to complete the contract, sought because land is considered unique.
143
What are potential remedies for breach after completion?
Misrepresentation can lead to rescission; misdescription can lead to rescission and damages; breach of title guarantee covenants leads to rare claims.
144
What does Security of Tenure (SoT) provide for commercial tenants?
It gives tenants the right to stay in leased premises for an additional term unless the landlord terminates the lease using statutory methods.
145
Which act confers Security of Tenure?
The Landlord and Tenant Act 1954.
146
How can a business tenancy be automatically terminated?
Through forfeiture, surrender, a landlord’s s25 notice, or a tenant’s s26 notice.
147
Are commercial leases under 6 months exempt from SoT?
Yes, commercial leases of less than 6 months and contracted out leases are exempt from SoT provisions.
148
What must a landlord do to contract out of SoT?
Serve a health warning notice at least 14 days before the lease completion; the tenant must sign a declaration in front of a solicitor.
149
What is a landlord's s25 notice?
It informs the tenant that the landlord requires the premises back or wishes to negotiate a new lease, served 6-12 months before the desired end date.
150
What grounds must a s25 notice specify?
One of five statutory grounds for reclaiming possession (e.g., tenant's breach, landlord intends to occupy, etc.).
151
What is a tenant's s26 notice?
A notice of desire for a new lease that must be served 6-12 months before the new tenancy starts, allowing the landlord 2 months to respond.
152
What happens if the landlord opposes a tenant’s s26 request?
They must specify one of the five statutory grounds for opposition. If the landlord's grounds include occupation or demolition, the tenant is entitled to compensation.
153
How is compensation calculated based on the length of occupancy?
If occupied for less than 14 years, compensation is the rateable value; if more than 14 years, it's twice the rateable value.
154
What should the Seller's Solicitor (SS) obtain before completion?
The redemption figure up to the date of completion.
155
What must the SS do regarding the seller’s lender on completion?
Advise the seller’s lender of the completion date.
156
What is the SS responsible for transferring on completion?
The required redemption monies to the seller’s lender.
157
What document does the SS deal with to discharge the mortgage?
The discharge (DS1) of the mortgage registered against the property.
158
What is the first step for the Buyer’s Solicitor (BS)?
Verify the buyer’s identity.
159
What must the BS investigate in relation to the property?
Title to the property and raise searches and enquiries.
160
What should the BS advise the buyer on regarding the mortgage?
The contents and effect of the mortgage deed.
161
What does the BS arrange for the buyer and lender?
To sign the mortgage deed.
162
What must the BS submit to the lender?
A clear certificate of title.
163
What is the BS's responsibility post-completion regarding the mortgage?
Attend to registration of the mortgage.
164
What is a key covenant in a lease?
Covenant to pay rent.
165
What does the covenant of quiet enjoyment entail?
Prohibits the landlord from interfering with the tenant’s enjoyment of the property.
166
What duties might a lease covenant outline?
Duties of both landlord and tenant to repair the premises.
167
What can a covenant specify regarding the use of premises?
The uses to which the tenant may put the premises (e.g., residential, commercial, or both).
168
What does a covenant restricting alterations entail?
It limits how the tenant can modify the premises.
169
What is a qualified alterations covenant?
Prohibits a tenant from making non-structural alterations without the landlord's consent.
170
What does an absolute bar on alterations mean?
It prohibits a tenant from making any non-structural alterations to the leased premises.
171
What remedy can a landlord use if a commercial tenant fails to pay rent?
The landlord can use Commercial Rent Arrears Recovery to take control of the tenant’s goods and sell them.
172
What is forfeiture in the context of leasehold covenants?
Forfeiture is the landlord's right to end the lease early and re-enter the premises.
173
Is forfeiture automatically available for non-payment of rent?
No, forfeiture is only available if expressly included in the lease terms.
174
What must a landlord do to forfeit a lease?
Serve a notice on the tenant specifying the breach, requiring it to be remedied within a reasonable time, and stating any compensation payable.
175
How can a landlord waive the right to forfeit?
By accepting or demanding payment after becoming aware of the breach.
176
What can a party do if the other fails to fulfill repair obligations?
They may claim damages or seek specific performance.
177
What is a "self-help" clause?
A clause allowing the landlord to enter the premises and make repairs if the tenant breaches the covenant of repair, provided they give notice first.
178
What can a landlord recover if they resort to self-help?
The costs of the repair can be recovered as a debt from the tenant.
179
How can a lease come to an end?
1. Expiry of lease 2. Termination by notice 3. Forfeiture 4. Frustration 5. Surrender and merger
180
What happens when a lease expires?
The lease ends when the fixed period is completed.
181
How is a periodic tenancy terminated?
By either party serving written notice of the requisite length (usually at least one full period).
182
What is forfeiture in lease termination?
The landlord may reclaim possession if the tenant is in breach of covenant.
183
What is "frustration" in lease context?
It ends a party's obligations due to an unforeseen event that makes the contract impossible to perform (rarely applies to leases).
184
What is surrender in lease termination?
When both parties mutually agree to terminate the lease early, with the tenant giving up possession to the landlord.
185
What is merger in lease termination?
When the landlord transfers the reversion to the tenant, resulting in a termination of the lease.
186
What happens to a sublease if the head lease is ended by expiry, notice, or forfeiture?
The sublease typically ends as well.
187
What happens to a sublease if the head lease ends by surrender?
The subtenant becomes the tenant of the head landlord on the terms of the sublease.
188
What happens to a sublease if the head lease ends by merger?
The new owner holds the estate subject to the sublease, and the subtenant's position will be similar to that of a surrender.
