Property Practice MCQS Flashcards

Question

**Which is the correct order of the three registers in the Official Copies?** A) 1) Proprietorship Register, 2) Property Register, 3) Charges Register. B) 1) Charges Register, 2) Property Register, 3) Proprietorship Register. C) 1) Property Register, 2) Proprietorship Register, 3) Charges Register. D) 1) Property Register, 2) Charges Register, 3) Proprietorship Register. E) 1) Charges Register, 2) Proprietorship Register, 3) Property Register.

Answer 1

C) 1) Property Register, 2) Proprietorship Register, 3) Charges Register.

Answer 2

D) Official copies of the register, title plan and copies of documents referred to in the official copies where the relevant rights have not been fully extracted. (Correct, you have understood which documents comprise the title to registered land)

Answer 3

B) The land has the benefit of a right of way contained in a conveyance dated 27 March 1970 (Correct. The buyer’s solicitor would need to see a copy of this conveyance to establish the details of the right of way eg which piece of land the right of way is over and any restrictions on its use)

Answer 4

A) The Property Register describes the property using the postal address and also by referring to the Title Plan.

Answer 5

C) Maintenance, Adoption, Registration of the burden and Adequacy. (Correct. You have understood the four issues to consider and discuss when the property has the benefit of a right of way)

Answer 6

C) The burden of the right of way should be registered in the charges register of the servient land. (Correct. If the servient land is unregistered you would put a caution against first registration over the land so that you can ensure the burden of the right of way is registered in the charges register once the servient land is registered)

Answer 7

A) Where the seller is the executor of a deceased person’s estate (This is correct. The seller is usually the registered proprietor. An exception would be where the seller is the executor of a deceased person’s estate)

Answer 8

B) Lucy Watson can sell on her own as she and Owain Hutchison held the property as beneficial joint tenants and on Owain’s death his beneficial interest passed to Lucy under the doctrine of survivorship so the buyer just needs to see an official copy of Owain’s death certificate (Correct. Lucy and Owain were beneficial joint tenants (because there was no tenant in common restriction in the Proprietorship Register) so on Owain's death, Lucy could sell on her own because Owain's beneficial interest had passed to Lucy under the doctrine of survivorship. The buyer just needs to see an official copy of Owain's death certificate)

Answer 9

A) RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court. (Correct. This is the tenant in common Restriction)

Answer 10

D) Because any such interests will be overreached. (Correct. You have understood the concept of overreaching)

Answer 11

A) If there is a mortgage / charge over the property, there will be two entries in the Charges Register and one entry in the Proprietorship Register regarding it (Correct. A mortgage / charge will have two entries in the Charges Register giving details of the mortgage / charge and also one entry in the Proprietorship Register – the lender’s Restriction)

Answer 12

D) Ensuring it transfers the buyer's purchase monies to the lender on completion so that the lender can redeem its mortgage loan before then transferring the balance to the seller (This is correct. The buyer's solicitor will not transfer the purchase monies to the seller's lender, it will sell them to the seller's solicitor. The other options are all something the buyer's solicitor should ensure it does to make sure the buyer takes the land free of the seller's mortgage)

Answer 13

E) A lease granted out of the property. (Correct. A lease granted out of the property burdens the property and appears in the Charges Register)

Answer 14

D) The buyer will be contractually bound by the positive covenant if an indemnity covenant note appears in the proprietorship register as the seller will require an indemnity covenant from the buyer. (Correct. Positive covenants do not run with the land but can be made contractually binding if there is a chain of indemnity covenants. An indemnity covenant note on the proprietorship register shows whether the seller gave an indemnity covenant and the standard conditions in the contract require the buyer to give an indemnity covenant if the seller did)

Answer 15

D) The past breach is not continuing and so no solution is needed unless the person owning the land with the benefit of the covenant has claimed they suffered loss. (Correct. As the buyer is removing the porch (the alteration which breached the restrictive covenant), the past breach will not be continuing and so a solution is not needed unless the person owning the land with the benefit of the covenant has complained about the breach or claimed for loss)

Answer 16

D) Contact the person owning the land with the benefit of the covenant to request their written consent for the proposed breach. (Correct. As the person owning the land with the benefit of the covenant has already been approached insurance is no longer available as an option (otherwise getting an insurance quote would have been the first solution to attempt). We are requesting permission to breach a covenant here so easements are not relevant. The Upper Tribunal (Lands Chamber) is a last resort as it is time consuming and expensive)

Answer 17

C) Insurance must be tried before approaching the person owning the land with the benefit of the covenant (Correct. Once the person owning the land with the benefit of the covenant (PWB) is approached insurance will be unavailable since the PWB has been alerted to the breach and is now much more likely to be aware they can make a claim for loss)

Answer 18

A) 1) Insurance against the PWB claiming loss caused by the breach, 2) Approaching the PWB for consent to breach the covenant. (Correct. As the breach is a future one to be carried out by the buyer, the seller will not remedy it. The PWB should not be approached prior to an insurance quote being obtained as once the PWB is approached insurance will not be available (it will be a condition of the insurance that the PWB has not been and will not be approached). The Upper Tribunal (Lands Chamber) is not available for positive covenants (s.84 LPA 1925))

Answer 19

B) An epitome is a set of copies of relevant title documents with a front sheet setting out details of the documents.

Answer 20

D) 1) 1 December 1990 and 2) 1 April 1998

Answer 21

C) The 1956 conveyance, the 1977 conveyance, and the seller’s mortgage (Correct. Whilst the 1956 conveyance is a pre-root document, it is cross-referred to in the root of title. The 1978 lease does not need to be included as it has expired)

Answer 22

E) - Conveyance dated 1988 between Acton (Millinery) Ltd and Susan Wolston. - Mortgage dated 1988 between Royal Bank of Scotland plc and Susan Wolston. (Correct. The 1988 conveyance is the root conveyance (the conveyance to the current seller) and must be included. The 1988 mortgage is the current seller's mortgage, entered into at the same time as the root conveyance. This must be included in the epitome, even though it will be redeemed at completion (and even if it has already been redeemed, as it post-dates the root of title))

Answer 23

C) The seller should have affixed their company seal in the presence of two directors or one director and the company secretary who have both signed the conveyance. The buyer should have executed the conveyance by signing with a witness, sealing and delivering it (Correct. These were correct execution methods for conveyances dated pre 31 July 1990)

Answer 24

A) Get the seller to arrange for the root conveyance to be stamped as soon as possible (This is correct. You would need to see evidence of this before exchange and completion)

Answer 25

A) The 1989 conveyance could be a good root of title provided it contains a certificate of value (Correct. The 1989 conveyance does not have an ad valorem stamp but provided it has a certificate of value (to go with the PD stamp) then it has been correctly stamped. The last date for compulsory first registration was 1 December 1990 and you have no information to tell you that the property was in an area that was subject to compulsory first registration before this date. Provided the 1977 conveyance (with plan) is included in the epitome, it does not matter that the description of the property in the 1989 conveyance is only by reference to the 1977 conveyance)

Answer 26

D) Restrictive covenants bind a purchaser if they are registered as a class d(ii) land charge (Correct. The registration of the restrictive covenant allows it to bind a purchaser)

Answer 27

D) The mortgage to B Bank PLC (Correct. This second mortgage is a puisne mortgage which is protected by a Class C(i) land charge)

Answer 28

C) CLC searches against 1) Harold Branagh from 1926 – 1955, 2) Alison Sykes and Jonathan Sykes from 1955 – 1989, 3) Joanne Holmes from 1955 – 1989; and 4) Edouard Matignon 1989 - 2022. (Correct. Those are the estate owners with the correct spelling of their names and the search periods are correct)

Answer 29

B) CLC searches against: (1) Company A for the period 1926 – 1945; (2) Company B for the period 1945 – 2003; (3) Company C for the period 2003 – present date (Correct. CLC searches are carried out against previous owners of the property for their periods of ownership. You would need a CLC search against Company A. As you don't know when they bought the property, you would carry out the search from 1926, the year when the CLC register was started. However, you do know that Company A sold the property in 1945, so you only need search up to then. The CLC search against Company B will be for the period 1945 to 2003, as you know that this is the period that they owned it. The CLC search against Company C will be for the period of their ownership, being 2003 to the current year. Note that the searches against companies A and B can be relied upon whenever they are dated, so if the seller's solicitor provides them, the buyer's solicitor need not carry out fresh searches. However, the search against Company C will need to be carried out again just before completion to confer priority)

Answer 30

B) An entry referring to a restriction on dealings in the Proprietorship Register and an entry referring to X Bank’s charge in the Charges Register (This is correct. Charges such as mortgages are recorded in the Charges Register and any entries restricting the current proprietor's ability to deal with the property are recorded in the Proprietorship Register)

Answer 31

E) (1) is a restrictive covenant and (2) is a positive covenant and both would be registered on the Charges Register. (Correct. Both restrictive and positive covenants are registered on the Charges register at the Land Registry. The Proprietorship Register deals with restrictions on the owner of the land's ability to deal with it rather than restrictions over the land. Restrictive covenants are contracts entered into between the covenantor (the owner of the burdened land) and the covenantee (the owner of the land taking the benefit) which restrict the right of the covenantor and their successors in title to freely use the burdened land eg a restrictive covenant not to use the property for anything other than a dwelling house. The covenant could be worded positively but still be a restrictive covenant eg a covenant to use the property only as a residential dwelling. Positive covenants are contracts entered into between the covenantor (the owner of the burdened land) and the covenantee (the owner of the land taking the benefit) which require the covenantor to do something with / on / to the property e.g. to build and maintain a fence along the boundary of the property. The covenant could be worded restrictively but still be a positive covenant e.g. not to allow the boundary fence to fall into disrepair. An aid to working out whether a covenant is restrictive or positive (regardless of whether it is worded negatively or positively) is the ‘hand in the pocket test’. If you have to ‘put your hand in your pocket’ i.e. pay out money to comply with the covenant then it is a positive covenant (one obliging you to do something))

Answer 32

C) You need to ensure another trustee is appointed to pay the purchase money to so the restriction will not apply (This is correct. This restriction tells us Mark and Philip are beneficial tenants in common and prevents a sale by a sole owner. This means a sale by Mark alone is not permitted and would not be registered by the Land Registry. A second trustee needs to be appointed in order to comply with the restriction. This will overreach Philip's beneficial interest, which will have passed under his estate because the right of survivorship will not have applied on his death)

Answer 33

C) Restrictive covenants bind successors in title so the seller should obtain restrictive covenant insurance to cover liability for breach of covenant (Correct. The burden of restrictive covenants bind successors in title as long as they are correctly registered, which is likely, as the restrictive covenant referred to is in the Charges Register of the Official Copies. As restrictive covenants run with the land and bind successors in title, they do not require an indemnity covenant in the Proprietorship Register to make them binding unlike a positive covenant.The seller has breached this restrictive covenant, and as a past breach it is the seller who is responsible for obtaining restrictive covenant insurance. While the other answer options might sound plausible, they are each incorrect. Note also that a firm of solicitors cannot arrange an insurance policy under section 19(1) FSMA 2000 unless they are authorised or exempt)

Answer 34

D) No. It is neither legally sufficient nor physically adequate (Correct. Although the lane may be sufficient for the ultimate intended use of the property, it will not be sufficient for the construction of the office. Construction requires heavy vehicles such as dumper trucks and cement mixers. They will not be able to access the site due to both the physical and legal constraints of the right of way)

Answer 35

B) Before exchange of contracts (This is correct. It is a report setting out all the matters relating to a property that the purchaser must review and make their mind up whether to buy the property. A purchaser is committed to purchase the property at exchange of contracts therefore the report must be sent out in good time before this point. It is unlikely that as soon as a solicitor has been instructed by the client that they would have had the search results and carried out the title investigation. It usually takes a few weeks for a solicitor to carry out the title investigation and then compile the report)

Answer 36

D) Details of any rights benefiting the property. (This is correct. The rights benefitting the property will be evident in the conveyancer’s title investigation of the property. The conveyancer would not have inspected the property and indeed it would make it clear as a limitation in the report that such an inspection had not taken place. The conveyancer’s terms and conditions of business would have been sent to the client upon being instructed. The report will not advise on the value of the property and whether the property is being purchased for the right price. This is something a surveyor would be able to advise on, not a solicitor)

Answer 37

C) Giving the client all material information of which the solicitor has knowledge in a way that the client can understand (Correct. A well drafted report on title will help with these requirements)

Answer 38

D) A channel provider, such as SearchFlow (Correct. The searches themselves are provided by channel providers (who offer an 'ordering service'), such as SearchFlow, Thames Water Property Searches and GlobalX. Requesting searches via such channel providers is a typical trainee / paralegal job)

Answer 39

D) Highways search (Correct. This is a search with the Highways Authority, rather than the Local Authority. The Local Search are enquiries with the Local Authority of the property)

Answer 40

E) Drainage and Water (Correct. This search will always be carried out. The search checks matters such as whether foul and surface water from the property drain to a public sewer, and whether the property is connected to a mains water supply)

Answer 41

A) The Local Authority Search Result (CON29) (Correct. There is a question to the local authority at enquiry 2.2 asking if there are any public rights of way (which would include footpaths) that abut or cross the property. The Local Land Charges Search Result does not record details of footpaths, instead it records charges such as general and specific financial charges, planning charges, listed buildings charges. The Property Register of the Official Copy reveals rights benefitting the property such as private rights of way, not public footpaths. The Search of the Index Map Result reveals whether the area searched is registered or unregistered land, it does not provide any information on an any specific rights of way and indeed the Land Registry does not record public footpaths on its registers)

Answer 42

C) The Local Authority Search Result (CON29). (Correct. There is a question to the local authority at enquiry 1.1(f) asking if there are any building regulation approvals and completion certificates issued in respect of the property)

Answer 43

D) The LLC1 reveals planning permissions and restrictions against permitted development (known as an Article 4 Direction). (Correct. The LLC1 is always carried out and the result reveals among other matters planning permissions granted (not refused) and restrictions against permitted development (an Article 4 Direction). In every transaction the LLC1 is submitted to the local authority (usually via an online search platform such as Searchflow) together with the CON29. The solicitor may raise additional enquiries on CON29O but this is not required in every transaction. It is the CON29O that will reveal whether a property is registered as common land or town or village green, not the LLC1)

Answer 44

D) Yes, although he will not require planning permission for the internal works, he will require planning permission for the change of use (Correct. s. 55(2)(a) TCPA 1990 states that internal works do not constitute development. Classes E(g) (offices) and C3 (dwelling house) of TCP(UC)O 1987 were the relevant use classes. Changing from one use class to another is a ‘development’ because it is a material change in use’ unless the change is one that is permitted under Part 3, Schedule 2 GPDO 2015. Under the GPDO this is not a change of use that is ‘permitted development’. It would have been a change from B1 to C3 under the pre-1 September TCP(UC)O 1987 but was also not permitted under the GPDO 2015 so does not fall within the transitional provisions)

Answer 45

C) Any planning permission granted for development is likely to be subject to more onerous conditions than if the property was outside of the conservation area and the Local Planning Authority (LPA) may have made an Article 4 Direction. (Correct. Areas are designated conversation areas because they have a special character or appearance and hence it is likely that any planning conditions (e.g. bricks to be in keeping with the surrounding buildings) will be more onerous than in areas outside of such an area. Article 4 Directions are also very common in conservation areas)

Answer 46

A) Planning permission for the material change of use and building regulation consent for the internal works (Correct. The building works are internal works and therefore do not constitute development (s.55(2) TCPA 1990). Planning permission for the internal works is not required. The change of use of the property from a warehouse (Class B8) to a restaurant (Class E(b)) is a ‘material change of use’ which constitutes ‘development’ and hence planning permission is required for the change of use. This change does not fall within the GPDO 2015, nor would it fall within the transitional provisions (being a change in the pre-1 September TCP(UC)O 1987 from B8 to A3). As internal works are taking place, building regulation consent is required)

Answer 47

A) If planning permission had been needed, the time limit for the local authority to bring enforcement action for the seller not obtaining planning permission is 4 years from the date of substantial completion. (Correct. The correct time limit for enforcement of lack of planning permission is 4 years from the date of substantial completion (s. 171B TCPA 1990))

Answer 48

B) Non-compliance could result in a fine and the local authority carrying out the necessary work at the land owner's expense.

Answer 49

E) Request that the seller obtains a Regularisation Certificate before completion. (Correct. Building Regulations is concerned with how the works take place – so building materials, insulation, health and safety, fire escapes are all matters that building regulations covers. All works whether internal or external require Building Regulations. The seller should be asked to rectify the situation and obtaining a Regularisation Certificate is retrospective consent by the local planning authority that they are happy with the construction work. If you did not obtain a Regularisation Certificate, the local planning authority could apply for an injunction at any time requiring your client to alter or remove works. This would not be fair since it is the seller who should have obtained the consent and who should pay for any works that need to be carried out in order to obtain the correct approval)

Answer 50

B) The CPSEs will be requested by the buyer’s solicitor (Correct. The buyer will request the CPSE.1 and any relevant supplemental CPSE enquiries are raised usually by email. The seller’s solicitor will then ask their client to complete and when received back, will send on to the buyer’s solicitor)

Answer 51

B) Confirm and update where necessary replies to enquiries if completed more than two months earlier (Correct. This is from paragraph 15 of the Protocol)

Answer 52

D) No, the director should have spoken to the site manager. (Correct. The seller should make reasonable efforts to check records AND speak to appropriate people in the organisation)

Answer 53

A) The Protocol can be used in residential transactions of freehold and leasehold property.

Answer 54

B) Standard Conditions of Sale (incorporated into the contract), Property Forms, Formulae for exchange, Code for Completion by Post.

Answer 55

C) A buyer’s solicitor additional pre-contract enquiry as follows: “Has the property ever suffered from an infestation of rodents?’ (Correct. This is an enquiry of fact, not opinion and the seller should give a reply)

Answer 56

D) The Local Authority Search Result (Correct. There is a question to the local authority at enquiry 2.2 asking if there are any public right of ways (which would include footpaths) that abut or cross the property. While the other answer options might sound plausible, they are each incorrect. The Local Land Charges Search Result does not record details of footpaths, instead it records charges such as general and specific financial charges, planning charges, listed buildings charges, light obstruction notices. The Property Register of the Official Copy reveals rights benefiting the property such as private rights of way, not public footpaths. The Search of the Index Map Result reveals whether the area searched is registered or unregistered land, it does not detail any specific rights of way and indeed the Land Registry does not record public footpaths on its registers. The Commons Registration Search result (this is an optional enquiry in the Local Authority Search) will reveal whether the property is registered common land or town or village green under the Commons Registration Act 1965 or the Commons Act 2006)

Answer 57

C) The local authority has four years from the date of substantial completion of the patio and porch to take enforcement action against NHL.

Answer 58

D) The local authority is out of time to enforce against the landlord for the lack of planning permission for the building work but they are within the time limit to enforce for the unauthorised change of use (Correct. This answer reflects the enforcement periods for lack of planning permission for works (four years) compared to lack of planning permission for a material change of use (ten years))

Answer 59

D) LLC1 search; CON29 search; environmental desktop search and Commercial Property Standard Enquiries. (This is correct. Whether the property is listed will appear in the LLC1. Contaminated land notices and building regulations approval are only detailed in the CON29. Flooding risk appears in the environmental desktop search and the seller will confirm in the CPSEs whether the fence needs repairing)

Answer 60

D) Yes as there is no time limit for enforcement re: the lack of building regulations approval by the local authority (Correct. The local authority can apply to court to enforce the building regulations by injunction at any time. While the other answer options might sound plausible, they are each incorrect. Breach of conditions apply to planning permission only. The four year enforcement period related to planning permissions. The ten year enforcement period related to planning permissions. The liability for lack of building regulations approval will pass to the buyer on completion)

Answer 61

B) There is nothing he can do as the planning contravention is outside the enforcement period from the date of the change of use (Correct. This change of use of a building to a single residential property has a four year enforcement period which has now expired. While the other options appear plausible they are not. This change of use of a building to a single residential property has a four year enforcement period which has now expired. The enforcement period for change of use is not unlimited. An injunction applies mainly to lack of building regulations. This is not a permitted development)

Answer 62

D) It confirms to the recipient matters relating to the property through a series of statements of facts and disclosures

Answer 63

C) Before exchange of contracts (Correct. A buyer’s solicitor should not exchange contracts unless the source of funds is confirmed. Exchanging without confirmation means the lender could have issues with the property and then not want to lend, leaving the buyer contracted to buy without access to the main source of funds. There would be financial penalties under the contract if the buyer did not complete)

Answer 64

B) Contracts for the sale of land must be in writing and all the relevant terms must be incorporated into the contract (Correct. This is indeed two of the requirements for a valid land contract. The contract will also need to be signed by, or on half of the parties to the contract)

Answer 65

C) Standard Conditions (either the Standards Conditions of Sale or the Standard Commercial Property Conditions) (Correct. The standard conditions will always be incorporated into a contract for the sale of land. They contain conditions that are common to all transactions and it is far easier to incorporate these by reference rather than write them all out again in the contract)

Answer 66

D) A standard form contract for sale incorporating the standard conditions of sale and pre-printed special conditions. (Correct. It is usual for the solicitor to prepare the standard form contract for sale incorporating the standard conditions for sale for residential transactions and the pre-printed special conditions will be at the back page of the standard form contract. A tailor made contract is used mostly in commercial property transactions which this isn’t)

Answer 67

C) Special conditions may be used in both residential and commercial property contracts to add to or amend the standard conditions (This is correct. The Standard Conditions of Sale may be amended, excluded or supplemented by 'special conditions'. This applies in respect of both residential and commercial property transactions. Though, in respect of residential transactions, if the seller's solicitor is following the Law Society Conveyancing Protocol, special conditions may only be added if 'absolutely necessary for the purposes of the transaction')

Answer 68

C) By the seller’s solicitor as agent for the seller (Correct. Holding the deposit as agent for the seller means the money belongs to the seller and the seller is free to use it from exchange of contracts. If the deposit was held as stakeholder this means that the seller’s solicitor is custodian of the deposit for both parties: the deposit may not be released to the seller until completion)

Answer 69

B) False (Correct. Both SCS and SCPC state that 'time is NOT of the essence until a notice to complete is served'. This means that if a party fails to complete, the non-defaulting party cannot not yet walk away from the transaction)

Answer 70

A) A seller who is a trustee (Correct. A trustee would usually give only a limited title guarantee)

Answer 71

B) The man is to transfer the property with full title guarantee and agrees to appoint a second trustee who will give limited title guarantee in the transfer deed (Correct. A buyer from a sole surviving tenant in common would be expecting a title guarantee from both the surviving tenant in common AND from the second trustee appointed to overreach any beneficial interest in the property. However, the second trustee is often not appointed until completion. The sole surviving tenant in common will be named as the ‘Seller’ in the contract and will agree (by way of a special condition) to appoint the second trustee on completion. A trustee will usually agree only to give limited title guarantee as it has limited knowledge of the property)

Answer 72

D) Occupier consent's - the adult son should sign the contract to confirm they will vacate on or before completion (This is correct. The seller's solicitor would need to obtain the signature of the adult child, who would need to be advised to seek independent legal advice)

Answer 73

A) The buyer should ensure pre-written special condition 3(a) is included and attach a list of any other fittings/chattels that are agreed the buyer will purchase (Correct. The washing machine and dryer are not fixtures and will not therefore pass automatically to the buyer on a purchase. Fittings / chattels that the buyer would like including need to be expressly included in the contract. In a residential contract there is a pre-written special condition that allows the parties to specify any fittings / chattels (also called contents) that are to be included in the sale and any fixtures which are to be excluded)

Answer 74

A) VAT is chargeable on the sale of the property. The property is either a new (up to 3 years old) commercial property or an old (more than 3 years old) commercial property with an option to tax (Correct. SCPC 2 is the default position which is that VAT is chargeable on the sale of the property. The purchase price should state it is exclusive of VAT. The possible reasons why the sale of a commercial property would be chargeable to VAT are that it is a new commercial property or an old commercial property where the seller has made an option to tax)

Answer 75

B) A new (up to 3 years old) commercial property is being sold (Correct. VAT is chargeable on the sale of a new (up to 3 years old) commercial property but the default position is that the purchase price is deemed to be VAT inclusive unless the contract states otherwise. If the purchase price was not expressly stated to be exclusive of VAT it will be deemed to be VAT inclusive. The seller will have to account for the VAT element out of the purchase price to HMRC and will be left only with the remainder)

Answer 76

C) SCPC special condition A1 should be expressly incorporated because VAT is not chargeable on the sale (Correct. The sale of an old commercial property where the seller has not opted to tax is not chargeable to VAT. SCPC special condition A1 is the relevant provision to incorporate to reflect the position that VAT is not payable in the contract)

Answer 77

A) Draft a certificate of title and send it to the lender (Correct. If the purchase is being funded with the aid of a mortgage the solicitor must draft a certificate of title and send it to the lender. If the lender is satisfied with the content of the certificate then the loan will be available to the buyer on the day of completion. There are different certificates of title for commercial and residential transactions. However in both cases it will set out the same type of information about the property as a report on title (ie that the title to the property is good and marketable and acceptable security for the lender))

Answer 78

B) By telephone, whereby each solicitor has their client’s part of the contract and they agree to exchange during a telephone call (Correct. This is the most common method of exchanging contracts)

Answer 79

C) To send the seller’s part of the contract to the buyer’s solicitor on that day (Correct. You spotted the deposit is sent by the buyer’s solicitor to the seller’s solicitor and not the other way round)

Answer 80

D) Selling with limited title guarantee means the seller covenants that the seller is not aware of any rights having been granted over the property during the period of the seller's ownership, but the seller doesn't make any covenant about rights before that (Correct. The key difference of limited title guarantee from full title guarantee is that the seller is only guaranteeing what has occurred at the property during the seller's ownership. Note that if the seller inherited or was given the property, then this period extends to the last transaction for value (ie, sale))

Answer 81

A) The buyer’s solicitor should draft a special condition for insertion in the contract specifying that on or before the completion date the seller must repair the roof of the property to the reasonable satisfaction of the buyer. (This is correct. Special conditions are required to deal with specific matters agreed between the parties. Caveat emptor would mean that in the absence of a special condition, the responsibility for the repairs would fall to the buyer. s2 Law of Property (Miscellaneous Provisions) Act 1989 states that all the terms agreed between the parties must be incorporated in the contract, so the seller’s promise to repair the roof would not be binding without being in the contract)

Answer 82

B) The seller is under no obligation to insure the property; the common law position prevails, meaning that the buyer bears the risk at exchange (This is correct. Since there is no variation to the SCPCs in the contract, under condition 8.1 of the SCPC, risk in the property passes to the buyer on exchange of contracts under common law (even without an express provision). The buyer should therefore be able to claim on its insurance for the damage. If for some reason the buyer does not have insurance cover, it will have to bear its own loss for the damage resulting from the fire and it will be obliged to complete the purchase on the contractual completion date)

Answer 83

D) To forward the seller’s part of the contract to you by DX this evening (Correct. As you are acting for a buyer client, in accordance with Formula B you would have received an undertaking confirming that the seller’s solicitor would send the seller’s part of the contract to you by DX this evening. The outstanding mortgage will be dealt with at completion)

Answer 84

E) A contract incorporating the Standard Commercial Property Conditions, but not incorporating any of the Part 2 VAT provisions as it is a standard-rated supply. (Correct. Newly constructed commercial property is standard rated, and the Standard Commercial Property Conditions will be most appropriate for this)

Answer 85

B) TR1 executed by deed (Correct. Section 52 of the Law of Property Act 1925 states that to transfer the legal estate in land a transfer must be by deed. Although the land is unregistered, purchase will trigger compulsory first registration of the land and so the Land Registry’s Form TR1 will be used as the Transfer Deed. A TP1 is used when only part of a registered title is being purchased. As s 52 of the Law of Property Act 1925 states that to transfer the legal estate in land a transfer must be by deed, it cannot be signed under hand but needs the formality of being executed as a deed)

Answer 86

A) Transferor: Executed as a deed by [name of company] acting by [a director and its secretary] [two directors] Signature of Director: …………… Signature of [Director] [Secretary]: …… Transferee: Signed as a deed by [full name of individual] [signature] In the presence of:…………[signature of witness] [print in block capitals the full name and address of the witness] Transferee: Signed as a deed by [full name of individual] [signature] In the presence of:…………[signature of witness] [print in block capitals the full name and address of the witness] (Correct. Both the transferor (seller) and both of the transferees (buyers) must execute the TR1. The transferor must always execute the TR1 and the transferees must execute if panels 10 (a declaration of trust to be completed if there is more than one transferee) and/or 11 (additional provisions eg an indemnity covenant) of the TR1 have been completed. Here panel 10 would have been completed as there is more than one transferee. The execution clauses set out are the appropriate ones for a company transferor and individual transferees)

Answer 87

C) Nothing. Panel 3 should be left blank until completion. (Correct. The date in panel 3 is the date the TR1 is completed. It will be filled in by hand when the solicitors complete the purchase. Panel 3 is only filled in by hand when the solicitors actually complete the purchase (when the completion monies are received). This should be on the completion date which was specified in the contract however may not be eg if completion is delayed. The date in panel 3 is the date the TR1 is completed and not the date of the contract, which is the date of exchange)

Answer 88

A) Mr Smith’s death certificate (There is no separate deed of appointment to send as the second trustee was appointed in the TR1. The buyer’s change of name certificate does not need to be sent as the Land Registry only need evidence if the name of the seller is different from the name of the registered proprietor they have on the register of title)

Answer 89

B) 30 working days from the OS1 search result (It is a common mistake to say the priority period of an OS1 is 30 days. It is actually 30 working days. 15 working days is the protection period given by a K15 Central Land Charges search. 2 months is the time period for first registration at the Land Registry (post completion of the purchase of unregistered land).)

Answer 90

A) OS1 search only (As this is a registered property and your client is purchasing the whole of the title, a Form OS1 search will always be required. A bankruptcy search is not required to be undertaken against any individual seller of registered land (any bankruptcy would appear on the register of title and therefore on the OS1 search result). As this is not unregistered land, no Central Land Charges search (K15) is required either. Central Land Charges searches K15 are only relevant for unregistered land and would be carried out against the seller not the buyer to check for adverse entries and to give a protection period. As no buyer’s lender is involved, there are no solvency searches needed against the buyer)

Answer 91

D) You need to carry out a Form K16 bankruptcy search in respect of the buyer. (The lender’s solicitors carry out solvency searches against the buyer. On this scenario, you act for the buyer’s lender so you must carry the appropriate solvency search against the buyer pre-completion. As the buyer is an individual, the appropriate solvency search is a K16 bankruptcy search. If the seller is bankrupt it will appear on the OS1 search result and so no bankruptcy search is required in respect of the seller. Companies House searches (in respect of companies) are carried out at Companies House to check solvency pre-completion. K16 bankruptcy searches or K15 CLC searches which include bankruptcy are both carried out at the Central Land Charges Department. None of the solvency searches are carried out at the Land Registry.)

Answer 92

C) To undertake forthwith to pay the lender the money required to redeem the mortgage and to forward Form DS1 to the buyer’s solicitor as soon as the seller’s solicitor receives it from the lender. (Correct. This is the Law Society’s recommended form of seller’s solicitor’s undertaking re: the seller’s mortgage / charge. The seller’s solicitor is not able to discharge the mortgage as only the seller’s lender can do that. The seller’s solicitor will need to pay the money required to redeem the mortgage to the seller’s lender. This is likely to be paid out of the completion monies but it is the redemption amount and not the amount of the completion monies that must be paid over. In registered land the seller’s solicitor will receive a Form DS1 from the lender discharging the mortgage, a receipted mortgage is used in unregistered land to show a mortgage has been discharged. The seller’s solicitor cannot forward the receipted mortgage or DS1 until they receive it from the seller’s solicitor so they cannot undertake to send it immediately)

Answer 93

A) The Completion Information and Undertakings Form asks for details of the bank account to send the completion monies to (The Completion Information and Undertakings Form is sent by the buyer’s solicitor to the seller’s solicitor to obtain information about completion. Form TA13 is one example of the Completion Information and Undertakings Form. Firms can use their own in house version. The Completion Information and Undertakings Form is completed by the seller’s solicitor and signed by the seller’s solicitor. This is important as only a solicitor can give an enforceable undertaking and the Completion Information and Undertakings Form requests an undertaking in respect of the seller’s mortgage / charge)

Answer 94

C) They ask for key information regarding completion and deal with relevant undertakings required from the seller’s solicitor (Questions on the registers of title are asked pre-exchange in the title investigation stage. Whilst the pre-completion requisitions on title deal with undertakings they also ask for practical information regarding completion. Requisitions on title are questions asked of the seller’s solicitor regarding practical information for completion and dealing with relevant undertakings required from the seller’s solicitor.)

Answer 95

B) The Code contains professional undertakings (The Code is a voluntary procedure for postal completion. The Code can be used for the completion of both residential and commercial property purchases. The Code enables the seller’s solicitors to act as agent for the buyer’s solicitors. Completion occurs at the seller’s solicitor’s office as they hold the executed TR1 and receive the completion monies)

Answer 96

E) The transfer and mortgage deed only. (Correct. The buyer will need to execute the transfer as they are giving an indemnity covenant, and the mortgage deed because they are buying with a mortgage)

Answer 97

C) Written confirmation of completion must be sent to the buyer’s solicitor as soon as possible after completion and in any event by the end of the working day following completion (Correct. The Code says that the TR1 must be sent to the buyer’s solicitor as soon as possible after completion and in any event by the end of the working day following completion. The Code also says that as soon as possible after completion the seller’s key holder is to be notified and authorised to make the keys available to the buyer immediately and the seller’s solicitor is to confirm the date and time completion took place to the buyer’s solicitor. The Code does not put a requirement on the seller’s solicitor to notify their client as it governs the process of completion between the two solicitors. The seller’s solicitor will of course let their client know completion has occurred as soon as possible as best practice. The Code does not place a requirement re: the DS1 on the seller’s solicitor. The seller’s solicitor will fulfil the terms of their undertaking regarding any seller’s mortgage / charge but the usual form of undertaking will be to send the DS1 to the buyer’s solicitor. It will then be the buyer’s solicitor’s post-completion task to arrange for the mortgage to be removed at the Land Registry)

Answer 98

B) If the seller serves a notice to complete, the buyer fails to complete in accordance with the notice and the seller rescinds the contract, the seller is no longer entitled to contractual compensation under the SCS (The SCS compensation is for delayed completion. Completion has to actually occur for the compensation to be payable. If the contract is rescinded, completion cannot occur and there is no entitlement to contractual compensation although common law damages could be claimed for any loss suffered from the breach of contract. Time is not of the essence under the SCS until a notice to complete is served. The notice needs to expire before the seller can rescind the contract and keep the buyer’s deposit. The seller is not entitled to rescind the contract or keep the buyer’s deposit under the SCS until a notice to complete has been served and the notice period has expired. The seller can rescind the contract once the notice to complete has expired but rescission is not automatically triggered by the expiry of the 10 working day notice period in the notice to complete.)

Answer 99

C) Provided the buyer completes by 2pm on Monday your client is entitled to three days of compensation under the SCS (You correctly identified that the seller, who is not in default, would be able to claim compensation under the SCS for three days (Friday, Saturday and Sunday - the days of default). The compensation is payable for each day that the buyer does not complete by 2pm (the latest time for completion under the SCS), including the weekend. Under the SCS, time is not of the essence until a notice to complete has been served. The seller would not be entitled to take the buyer's deposit until the expiry of the notice to complete and rescission by the seller. There is no need to serve a notice to complete in order to trigger the right to compensation, although it is common in practice for a non-defaulting party's solicitor to serve the notice to complete to protect their client's right to keep the deposit and rescind the contract after ten working days following the service of the notice (excluding the day the notice was given).)

Answer 100

A) The hotel and storage costs of £750.

Answer 101

A) 30 working days from the date of the OS1 priority search result (It is 30 working days rather than 30 days. This is the priority period of the OS1 priority search and the application to the Land Registry must be made before the priority period ends. The deadline runs from the date of the OS1 priority search result rather than completion as it is the OS1 search result which provides the priority period within which the Land Registry application must be made. The deadline runs from the date of the OS1 priority search result made pre-completion rather than the date contracts are exchanged as it is the OS1 search result which provides the priority period within which the Land Registry application must be made)

Answer 102

C) TR1, SDLT5, Buyer’s mortgage/charge and the Certificate of Registration of the Charge. (The SDLT1 is the form sent to HMRC when SDLT is paid. HMRC will send back the SDLT5 acknowledgement of receipt which then needs to be sent with the Land Registry application. The Land Registry do not need the contract of sale, they need the purchase deed (the transfer – TR1) to register the change in registered proprietor (owner) of the land. The Land Registry do not need a plan of the property as it is already registered so they have a title plan already. As the buyer is a company, their mortgage/charge needs to be registered at Companies House post-completion. Companies House will return a Certificate of Registration of Charge and this needs to be sent to the Land Registry as well as the buyer’s mortgage/charge so that it is registered against the title)

Answer 103

D) 1) Register the buyer’s mortgage at Companies House, 2) send the LTT Return and pay LTT at WRA and 3) apply to the Land Registry using Form AP1 (As the property is in Wales LTT is payable to the WRA rather than SDLT to HMRC. The buyer’s mortgage must also be registered at Companies House (or it will be void as against liquidators, administrators and any other creditors) as the buyer is a company. The Land Registry application is necessary as the transfer and the buyer’s mortgage need to be registered on the title to the property)

Answer 104

B) 1) Payment of SDLT at HMRC within 14 days of completion and 2) application to the Land Registry to register the transfer and the buyer’s mortgage within 30 working days of the OS1 priority search result. (SDLT rather than LTT is relevant as the property is in England and, as there was no early occupation by the buyer, the effective date which the 14 day deadline runs from is completion. The buyer’s mortgage does not need to be registered at Companies House because the buyer is an individual not a company. The deadline for the Land Registry application is 30 working days from the OS1 priority search result and, as well as registering the transfer, the application to the Land Registry would include applying to register the buyer’s mortgage at the Land Registry)

Answer 105

D) The consequences of failing to pay SDLT/LTT within the relevant deadline are penalties and interest (The consequences of failing to register a buyer’s mortgage at Companies House within the relevant deadline are that 1) the mortgage/charge is void against liquidators, administrators and other creditors; 2) the loan is repayable on demand; and 3) it could be construed as negligence on the part of the solicitor. The consequences of failing to apply to the Land Registry to register the transfer and the buyer’s mortgage within the relevant deadline are that 1) the buyer would take the property subject to any third party interests that may have been registered subsequent to its OS1 search; and 2) the buyer will only have beneficial title (not legal title) to the property until they are registered as the registered proprietor of the title at the Land Registry.)

Answer 106

B) 41,250 (Correct. There is no SDLT on the first £250,000, 5% of the next slice £250,000 up to £925,000 = £33,750, and 10% of the final slice £925,000 to £1 million = £7,500. £33,750 + £7,500 = £41,250)

Answer 107

A) £29,500 (Correct. There is no SDLT on the first £150,000, 2% on the next £100,000 up to £250,000 = £2,000, and 5% on the remaining £550,000 = £27,500. £2,000 + £27,500 = £29,500.)

Answer 108

A) £3,750 (Correct. The value allocated to contents (provided it is an honest and reasonable valuation) can be excluded from the calculation. The SDLT is calculated on £500,000 and first time buyer rates apply, so it is 0% on the first £425,000 and 5% of the remaining £75,000 = £3,750)

Answer 109

D) £3,000

Answer 110

B) They can only claim Private Residence Relief on one of the houses (Correct. For a married couple or civil partnership, only one of the houses will be eligible for PPR)

Answer 111

A) The amount of CGT depends on the rate of income tax an individual pays (Correct. If CGT is payable the rate depends whether the individual paying is a basic rate or higher rate taxpayer. SDLT/LTT are the taxes payable by a purchaser (ie, the transferee) on the transfer of property to them. CGT is a tax imposed on an individual who disposes an asset (the transferor) and makes a chargeable gain. CGT is payable on the chargeable gain made when an asset is disposed of. The chargeable gain is calculated by taking the sale price and subtracting the purchase price, any allowable expenses and the annual exemption.)

Answer 112

C) A sale at a profit on an individual's UK holiday home used by them for two months of the year and let out for the rest of the year. (Correct. This would not fall under Private Residence Relief (for detail refer back to the element) and CGT would be payable)

Answer 113

A) They can only claim Private Residence Relief on one of the houses. (Correct. For a married couple or civil partnership, only one of the houses will be eligible for PPR)

Answer 114

D) Sainsways Plc - a UK supermarket chain established 80 years ago. Correct. A chain of companies that has been trading for 80 years is more desirable than the other options shown.

Answer 115

B) It offers income, the potential for capital growth and is seen as reasonably secure (Correct. Commercial property offers all of these advantages)

Answer 116

A) A tenant's covenant to pay annual rent but no further sums (Correct. An FRI lease would expect a tenant to pay the cost of insuring the property and, if appropriate, service charge)

Answer 117

E) It is a one year oral tenancy. Correct. A tenancy of 3 years or under may be created orally

Answer 118

A) A licence to occupy (Correct. The nature of the agreement is that the key cutter may be required to move, and therefore does not have exclusive possession of any part of the premises. It is a licence)

Answer 119

C) As the lease term is over 3 years, it will need to be executed as a deed (Correct. A legal tenancy of over 3 years must be created by deed)

Answer 120

E) The term commencement date can be earlier, the same day, or later than the date of the lease. Correct. The term commencement date can be any of these.

Answer 121

C) The rent will remain the same because it is an upwards only rent review Correct. The hypothetical lease would take into account the landlord's neglect of the common areas, but the rent will not drop because the rent review is upwards only.

Answer 122

D) £14,000 (Correct. The rent will be increased to the open market rent. The increase due to the tenant's business (goodwill) would normally be disregarded)

Answer 123

A) A 10 year lease of office premises negotiated by an RICS regulated agent (Correct. The agent would be bound by the provisions of the Code)

Answer 124

A) When the Code applies, RICS members and regulated firms must follow mandatory requirements. They must follow good practice unless there are exceptional reasons for not doing so.

Answer 125

B) The solicitor should advise the landlord of the provision that does not comply (Correct. Although the landlord is an RICS member and should be aware of the Code, having spotted the provision, the solicitor should advise the landlord)

Answer 126

E) They should usually be carried out, but the client may decide not to bother in some instances (eg, a short tenancy). Correct. The starting point is that searches should be carried out. If the client decides not to bother, then the solicitor should ensure that they are advised on possible consequences.

Answer 127

B) An OS3 search Correct. As the lease is not registrable, priority is not needed, and an OS3 search is appropriate.

Answer 128

D) The landlord's solicitor dates the original lease. The tenant's solicitor sends the completion monies and dates the counterpart lease Correct. The original lease is that signed by the landlord; the counterpart by the tenant. The completion monies are paid by the tenant to the landlord through their solicitors.

Answer 129

A) The landlord insures the warehouse and recovers the whole of the premium from the single tenant (Correct. The landlord will normally insure, recovering the premium from the tenant)

Answer 130

E) Because the tenant will be responsible for putting right any items that are in disrepair (save where arising from poor design or construction). Correct. In an FRI lease, the tenant gives a full repairing obligation and will have to put the premises in good repair.

Answer 131

E) The tenant's repairing covenant and the definition of the premises. Correct. The tenant's repairing covenant is read in conjunction with the definition of the premises.

Answer 132

E) A TR1 will be executed as a deed by (1) the woman selling and a second trustee and (2) the buyer. Correct. A TR1 is the correct form of purchase deed for a registered freehold property. When there is a sole surviving tenant in common selling, a second trustee must be appointed and execute the purchase deed with the sole surviving tenant in common for the deceased tenant in common’s beneficial interest to be overreached. The buyer must execute as they are giving an indemnity covenant.

Answer 133

A) Claim three days' interest from the buyer in accordance with the contract Correct. When the contractual completion time is missed, completion is deemed to take place the next working day. This interest should compensate the seller for the additional interest that the seller will have to pay on the mortgage over the weekend.

Answer 134

D) You will provide a final form certificate of title and undertakings relating to the mortgage money to the lender's solicitor. Correct. The final form of certificate of title will be in the form of a draft which should have been approved by the lender/their solicitor before exchange. The lender's solicitor will require undertakings to ensure that you can only use the mortgage money for the appropriate purpose.

Answer 135

C) The buyer’s solicitor should have sent Form SDLT1 to HM Revenue and Customs within 14 days of the date of completion together with the sum of £3,250 in respect of the SDLT payable Correct. The SDLT1 needed to be sent to HMRC within 14 days of the completion date together with the correct SDLT payable. Applying the rates that were given: · 0% on the first £150,000 = £0 · 2% on the next £100,000 = £2,000 · 5% on the remaining amount (the portion above £250,000) i.e. the final £25,000 = £1,250 · Total SDLT = £3,250

Answer 136

C) An OS1 against the property, a K16 against the buyer and a company search against the seller. Correct. An OS1 is the relevant priority search for the whole of registered land (OS2 is for sale of part but this is a sale of whole). A K16 needs to be carried out against the buyer because this is the relevant solvency search against the buyer when the buyer is an individual and the buyer’s solicitor should carry it out as they are acting for the buyer’s lender. A company search needs to be carried out against the seller as this is the relevant solvency search when the seller is a company. As this search does not give a priority period it must be carried out at the pre-completion stage even if it was also carried out earlier in the transaction.

Answer 137

B) Letting agents and other property professionals who are RICS members or in a RICS regulated firm must comply with mandatory provisions, and non-compliance may be taken into account in regulatory or disciplinary proceedings. Correct. RICS members are bound by the Code's mandatory provisions. (The Code also contains statements of good practice, which RICS members should follow unless there is a good reason not to.)

Answer 138

B) Request completion monies from the tenant Correct. You will need to be in funds for all completion monies due, which usually will be the first quarter’s rent, service charge and insurance rent so this can be sent to the landlord’s solicitor at completion.

Answer 139

C) The parties to the lease are ready to proceed to completion as soon as the form of the lease has been agreed.

Answer 140

E) Letting agents and other property professionals who are RICS members or in a RICS regulated firm must comply with mandatory provisions, and non-compliance may be taken into account in regulatory or disciplinary proceedings. Correct. RICS members are bound by the Code's mandatory provisions. (The Code also contains statements of good practice, which RICS members should follow unless there is a good reason not to.)

Answer 141

A) A lease to run as long as the tenant firm is employed as the landlord's accountants Correct. This is not a valid lease term. The lease term must be certain and may not continue indefinitely.

Answer 142

E) Although the tenant can get out of the lease at 5 years, exercising a break is not straightforward, and there may be more Stamp Duty Land Tax payable on the longer term. Correct. Break clauses are generally strictly drafted, and if the tenant does not comply exactly with their requirements, the break notice will be invalid. As the length of the lease is relevant to SDLT calculations, there may be a greater amount of SLDT to pay.

Answer 143

£0 Correct. There is no SDLT on this Net Present Value.

Answer 144

£2,000 Correct. The LTT is calculated as 1% of the £200,000 by which the NPV exceeds £225,000.

Answer 145

E) The lease is not registrable but can be noted against the landlord's title. Correct. The lease is more than 3 years but not more than 7 years. This is the correct answer.

Answer 146

C) It is likely that the landlord cannot unreasonably withhold consent if the alterations are considered an improvement from the tenant's point of view Correct. As the alteration improves the premises from the tenant's perspective it would class as a tenant's improvement.

Answer 147

A) A copy of the lease Correct. It is not usually necessary to include a copy of the lease.

Answer 148

D) The tenant must ask for consent, but the landlord may unreasonably withhold it Correct. As it is not a fully qualified covenant, the landlord has no obligation to give consent.

Answer 149

A) The landlord cannot unreasonably withhold its consent to the works because the covenant is fully qualified This is correct. The covenant against the internal alterations is fully qualified. This means the landlord cannot unreasonably withhold its consent to the works. S. 19(2) of the Landlord and Tenant Act 1927 does not apply to alterations covenants that are already fully qualified. Leases will normally allow the tenant to make some alterations to the premises. Unless the lease stipulates otherwise, the tenant is free to carry out any alterations to the premises, subject to the legal doctrine of ‘waste’ which prevents alterations which would devalue the premises. However, the landlord will usually wish to control what alterations the tenant can undertake, especially in shorter leases. You need to be able to distinguish between absolute, qualified and fully qualified covenants in a lease and understand the effect of statute on certain covenants. S.19 (2) Landlord and Tenant Act 1927 applies to certain alterations covenants. It is important you understand when it will / will not apply

Answer 150

E) The Landlord will be able to withhold consent to the request to change the use of the property. This is correct. S.19(3) of the Landlord and Tenant Act 1927 does not upgrade the qualified covenant into a fully qualified covenant so the Landlord does not need to act reasonably. This section does prohibit a landlord for charging a lump sum or an increase in the rent unless there are structural alterations taking place. The section also allows a landlord to require the payment of its legal fees as a condition of consent so there is no need for this obligation to be in the lease itself.

Answer 151

B) The alterations provision in the lease is a qualified covenant and, as the tenant’s proposed works are likely to constitute improvements, the landlord cannot unreasonably withhold its consent. Correct. The requirement for landlord’s consent means that the alterations covenant is a qualified covenant. Section 19(2) of the 1927 Act upgrades this to a fully qualified covenant where the works constitute tenant's improvements meaning the landlord cannot unreasonably withhold consent. As the tenant is presumably proposing the alterations to make the premises more suitable for its use, they would be likely to qualify as tenant's improvements.

Answer 152

A) You would advise the tenant that the landlord will likely be liable for repairing damage to the premises caused by flooding Correct. Flooding is an insured risk, and these are excluded from the tenant's repairing obligation. It is likely (but you should check) that the landlord's obligations are to apply the money received from the insurers on repairing the damage.

Answer 153

E) The tenant is responsible for repairing the interior of the unit. The landlord is responsible for insuring the shopping centre and providing the services, recovering a proportionate part of the cost of doing so from the tenant. Correct. Note that the landlord does undertake obligations in an FRI lease, but the cost falls upon the tenants.

Answer 154

E) For an old lease, the outgoing tenant remains liable, but the incoming tenant only becomes liable if it gives a direct covenant to the landlord. For a new lease, the outgoing tenant is released from liability unless it enters into an authorised guarantee agreement. The incoming tenant automatically becomes liable. Correct. This states the liabilities of each party after assignment correctly.

Answer 155

The tenant does not need the premises at the moment, but may do in future Correct. Assignment would not be appropriate here, as the tenant would be giving up control of the premises.

Answer 156

C) The proposed assignee sells similar products to the shop next to the tenant's. Correct. In a shopping centre, the landlord will usually be able to impose a policy to mix the retail uses.

Answer 157

D) The landlord's solicitor will require an undertaking for costs from the tenant's solicitor.

Answer 158

C) Apply to the landlord for consent to the assignment Correct. It is not usual for long residential leases to require landlord's consent to assignment.

Answer 159

An OS1 search should be carried out for the assignee of a 10 year lease Correct. A 10 year lease would be registered, and so an OS1 search should be carried out against the assignor's leasehold title.

Answer 160

C) The tenant will remain liable and the undertenant will be liable if the undertenant gives a direct covenant to the landlord Correct. The tenant remains in a landlord/tenant relationship with the landlord. The undertenant will only be liable to the landlord if it gives a direct covenant (but it will be liable to the tenant as its immediate landlord).

Answer 161

The remainder of the term of the tenant's lease less three days. Correct. This is a certain term, and is less than the tenant's term.

Answer 162

The tenant wishes to be released from its repairing obligation. Correct. Underletting does not release the tenant from its repairing obligation (although it can in turn require the undertenant to comply with it).

Answer 163

The landlord's solicitor drafts the licence to underlet and the tenant's solicitor drafts the underlease. Correct. The landlord's solicitor will draft the licence to underlet, and it is for the tenant's solicitor to draft the underlease.

Answer 164

The parties are ready to complete the licence to underlet and underlease. Correct. If the parties are ready to complete, there is no need for the agreement for underlease.

Answer 165

An OS2 search against the tenant's leasehold title Correct. As the underlease is of part of the premises, an OS2 search of part should be carried out against the tenant's leasehold title.

Answer 166

To set out the credit checks and references that will be required of a prospective tenant. Correct. These will be carried out as part of the consent application, but as they will be done before the licence to assign is completed, they would not usually be referred to in the licence itself.

Answer 167

A detailed specification of work to be carried out. Correct. You would expect to find this in a licence for alterations.

Answer 168

Because most long leases do not require landlord's consent to an assignment.

Answer 169

C) The landlord is required to act reasonably if withholding consent, and personal feelings are not a reasonable ground for withholding consent. The landlord will likely have to give consent within a reasonable time This is a qualified covenant against underletting (the landlord’s consent is required), which is automatically upgraded to a fully qualified covenant (s19(1)(a) Landlord and Tenant Act 1927). Furthermore, the landlord must make a decision within a reasonable time (s1, Landlord and Tenant Act 1988). As the prospective underlessee has good covenant strength, and the landlord's only objection is their personal relationship, it is likely that the landlord will have to give consent within a reasonable time.

Answer 170

D) The bookstore and the dry cleaners The dry cleaners are the current tenant and are liable to pay the rent. The bookstore gave an AGA to the landlord in respect of the dry cleaners when they assigned to the dry cleaners. The landlord can therefore claim from the bookstore under the AGA. The original tenant (the clothes shop) will not have any original tenant liability as this is a new lease. The clothes shop’s AGA only covered the bookstore whilst they were the tenant.

Answer 171

B) The outgoing tenant if they entered into an authorised guarantee agreement, and the incoming tenant automatically on taking the assignment Correct. This is a new lease, and therefore liability shifts automatically from the assignor to the assignee on assignment. The outgoing tenant will only be liable if they have given an authorised guarantee agreement, but the incoming tenant will become automatically liable on assignment.

Answer 172

E) Licence to assign and TR1. A licence to assign is needed to document the landlord’s consent. As the lease is registered, the assignment will need to be documented by way of Land Registry's standard transfer deed TR1. An assignment is the sale of an existing lease, not the creation of a new lease. There will be no new lease granted to the assignee.

Answer 173

An OS1 search of the tenant's leasehold title. Correct. As the original lease was over 7 years, it would have been registered. It is the tenant's title that the assignee is interested in.

Answer 174

Security of tenure provides the landlord with greater flexibility over its own property. Correct. This is not a benefit - the landlord is more restricted in its use of the property.

Answer 175

A monthly tenancy for a shop with a flat above it. Correct. A periodic tenancy can qualify for security of tenancy. The flat does not prevent the premises from qualifying as it is a subsidiary residential use.

Answer 176

The tenancy does not have security of tenure under the Landlord and Tenant Act 1954 because it is an agricultural tenancy. Correct. As an agricultural tenancy it would not qualify for security of tenure under the Landlord and Tenant Act 1954. It may qualify for a different type of security of tenure under the agricultural tenancy regime, but that is beyond the scope of this course.

Answer 177

A statutory declaration and reference to both the notice and statutory declaration in the lease itself. Correct. As 14 days have not elapsed since the landlord's notice, a statutory declaration is required. It is also necessary to refer to both notice and statutory declaration in the lease itself.

Answer 178

The tenant can leave the premises on the last day of the contractual term, or it can remain in occupation beyond the last day. Correct. The tenant is free to treat the contractual expiry as the end of its occupation, or to remain in occupation and hold over.

Answer 179

The landlord may forfeit the lease. Correct. The landlord may forfeit the lease even if it is protected.

Answer 180

They may serve notice to quit on the landlord. Correct. This is the correct procedure (more on this in the materials on termination).

Answer 181

Because if the rival supermarket becomes the landlord, then after five years of holding the reversion, they may oppose renewal on the basis of occupying the premises for their own use. Correct. This has happened in practice, and therefore this is why supermarkets may want to include a clause of this type

Answer 182

The tenant wants to take advantage of a falling rental market. Correct. This is a good reason, as the tenant will otherwise be stuck on the rent last fixed by the previous lease.

Answer 183

The tenant serves a s27 notice to leave the week before the end of the contractual term. Correct. The tenant cannot use the section 27 notice to bring the lease to an end before the expiry of the contractual term.

Answer 184

A section 26 notice allows the tenant to initiate the lease renewal process if the landlord does not. Correct. The section 26 notice gives the tenant a mechanism to initiate lease renewal rather than relying on the landlord.

Answer 185

At any time after service of a section 25 notice, or two months after service of a section 26 notice (or if earlier, the landlord's service of a counter notice), up until the day before the proposed commencement date of the new lease. Correct. This states the correct window for the parties to make an application.

Answer 186

10 July Correct. The interim rent will become payable from the earliest date that could be specified in the section 26 notice as the proposed commencement date, ie, 6 months from service of notice.

Answer 187

A lease term of 20 years, where the previous lease was 20 years. Correct. The court can only order a term up to 15 years.

Answer 188

28 February or 29 February if it is a leap year. Correct. Under the corresponding date rule, as there are not 31 days in February, the latest day of February is taken instead.

Answer 189

On L2 as it is the first in the chain of landlords who is a competent landlord. Correct. L2's interest will not come to an end in 14 months' time, and therefore L2 qualifies.

Answer 190

The landlord may wish to serve a hostile s25 notice. The tenant may wish to serve a section 27 notice that can bring the tenancy to an end at the end of the contractual term, or may just leave on the last day of the contractual term.