Purchase and Sale COPY Flashcards
(108 cards)
1
Q
Tell me about the four methods of sale.
A
- Formal Tender
- Informal Tender
- Private Treaty
- Auction
2
Q
Tell me about an advantage/disadvantage of sale by private treaty/formal tender/informal tender/auction.
A
Private treaty – a method of sale where parties are free to negotiate in their own time and without commitment in the open market Advantages - Flexibility - Parties control the process - Vendor not under any obligation to sell Disadvantages - Potential for gazumping/gazundering - Late decisions not to buy - Associated abortive costs
Informal Tender – Used when there is a good level of interest. Best bids procedure not legally binding. Agent invites in writing all interested parties to submit their best and final offer with details to include; (DNFCVV)
• Required date and time of receipt of the written offer
• Name and address of the applicant’s solicitor
• Confirmation of finance arrangements
• Details of any conditions attached to the offer
• Confirmation that offers of a variable nature (i.e. an escalator bid, offering an amount in
excess of the highest offer received) will not be considered.
• The vendor reserves the right not to accept the highest, or any, offer made. This is most
important. Without this statement, the informal best bids process could become a binding
tender
Advantages
- Less onerous than formal tender
- Can be used as a negotiating mechanism to invite all parties to bid
- Further negotiations can follow
- High level of accountability
Disadvantages
- Does not lead to direct contract for sale
- Risk of accepting offer on property which is then withdrawn and associated abortive costs
- Negotiation process can be drawn out
Formal Tender – often used by statutory bodies to provide high level of accountability. There is no opportunity to bid again.
Advantages
- It is possible for formal tender to lead direct to a contract for sale
- High level of accountability
Disadvantages
- Less flexibility over the process
- No opportunity for further negotiations
Auction
Advantages
- Achieving a relatively short timescale for the disposal of the property
- Certainty of sale (assuming reserve figure is achieved)
- Useful for unusual properties
Disadvantages
- Short intensive marketing period
- Lack of confidentiality over price achieved
- Vendor cannot choose purchaser
3
Q
Tell me about the legal processes to complete a purchase/sale.
A
- Negotiate the sale, draft heads of terms and instruct lawyers
- Liaise with the vendor’s lawyer in respect of Commercial I Residential Property Standard Enquiries (C/RPSEs)
- Assist with any queries during legal formalities
- Instruct exchange of contracts (take deposit money)
- Completion of sale after completion money has been paid
4
Q
How do exchange and completion work in an auction transaction?
A
- Exchange of contracts occurs on the fall of the gavel in line with the le (viewed beforehand).
- Completion occurs 20 working days later
5
Q
Tell me about your understanding of legislation relevant to your agency practice.
A
Estate Agents Act 1979
Promotes 7 points key points (choalk)
1. Clarity as to the terms of the agency (section 18)
2. Honesty and accuracy
3. Agreement for liability for costs
4. Openness regarding personal interests (section 21)
5. Absence of discrimination
6. Legal obligation to tell the client about offers received
7. Keep clients’ money separate
6
Q
What are the most important points of the estate agents Act 1979?
A
Most important points
- Specify all costs/fees in advance, in writing in terms of business (Section 18)
- Itemise all payments - no global budget allowed
- Disclosure of personal interests – you must reveal promptly and in writing a any personal interest you or a connected person have in a transaction ‘connected person’ (section 21) is someone who could benefit financially from the transaction such as a relation or business associate (colleague)
- Specify nature of agency and selling rights to be agreed
> Sole selling rights or sole agency rights
> Sole, joint sole agency or multiple agency
- Offers: report all offers promptly and in writing
- Misrepresentation of interest/offer - you can only tell truth regarding offers received.
7
Q
When do you need planning consent for a marketing board?
A
- A flat board larger than 2 sqm (commercial)
- A V board larger than 2.3 sqm (commercial)
- A flat board larger than 0.5 sqm (resi)
- A V board larger than 0.6 sqm (resi)
- Illuminated boards
- Boards erected on listed buildings and in conservation areas
8
Q
How far from the building are you allowed to place it?
A
Must not project more than 1m from the building
9
Q
How long do you have to remove a board after a transaction?
A
14 days.
10
Q
How does Section 18 relate to your agency practice?
A
Terms of business - Specify all costs/fees in advance, in writing in terms of business (Section 18) – applicable when disposing of a property on behalf of the DoH.
11
Q
What are the Three agency bases?
A
- Sole Agency – fee only due if the agent introduced the purchaser.
- Joint Agency – two or more agents sharing a fee on a pre-agreed basis
- Multiple Agency – any number of agents but only the successful agent gets a fee.
12
Q
What are the two types of selling rights?
A
- Sole selling rights – remuneration will be payable if contracts are exchanged in a period when sole selling rights exist even if the purchaser who was introduced by the firm during the period of the sole selling rights contract.
- Sole agency rights - can be agreed which means a fee is only due if the agent introduced purchaser within term of instruction agreement
13
Q
Where are agency basis/selling rights defined?
A
Estate Agents Act 1979
14
Q
What is a ready, willing and able purchaser?
A
A prospective purchaser who is in a position to sign a binding contract; one who is prepared, legally capable and financially able to purchase a property.
Would need to be included in agency contract and then if a seller pulls out, would then be liable for;
- Abortive fee
- Marketing expenses
- Time spent measuring etc.
15
Q
How does Section 21 relate to your agency practice?
A
Section 21 – Disclosure of personal interests – a ‘connected person’ is someone who could benefit financially from the transaction such as a relation or business associate.
I undertook a conflicts of interest check for any DoH disposal.
16
Q
Explain to me what are Consumer Protection / Business Protection Regulations who and what do they relate to?
A
They relate to potential buyers and vendors and extend the duty owed to not just clients but to, potential clients, viewers, buyers and actual buyers, (all defined as consumers), to give accurate and/or necessary ‘material’ information and not to make any misdescriptions in the material.
Apply to lettings as well as sales and online agency
17
Q
Whats difference between Misrepresentation Act 1967 and Consumer Protection Regulations 2008?
A
Criminal offence (misrepresentation civil offence)
- CPR relates to all known info needing to be declared (misrep relates to misrep or false statement).
- Cannot use disclaimer for CPR (can for misrepresentation)
- CPR whole process (misrep pre-contractual enquiries)
18
Q
What does average consumer mean in relation to CPR?
A
Average consumer – a reasonably well informed person.
19
Q
What does material information mean in relation to CPR?
A
‘Material information’ means information that the consumer needs to make an informed transactional decision and generally any information required to be given by law.
20
Q
What are considered to be unfair practices under this legislation? (CPR)
A
- omit material information
- hide material information
- provide material information in a manner that is unclear, unintelligible, ambiguous or untimely
- fail to identify the commercial intent (unless this is apparent from the context)
21
Q
Tell me what you know about the Misrepresentation Act 1967
A
- Act relates to a misrepresentation or a false statement (a mis-statement) of fact made by a party during pre-contractual enquiries, which has the effect of inducing the party to purchase.
- The vendor and/or agent can be sued for damages and/or the contract rescinded
- Agent has a duty of care to check that the advice, information or opinion is reliable
22
Q
How does the Misrepresentation Act 1967 relate to your agency practice?
A
When marketing any of our disposal properties, for example in an auction sale.
23
Q
What does the Unfair Contract Terms Act 1977 say?
A
- A statute which imposes limits on the extent to which liability for breach of contract, negligence or other breaches of duty can be avoided by means of contractual provisions such as exclusion clauses.
24
Q
Do you need to inform your client if you offer a service to a prospective tenant?
A
Yes. Under Estate Agents (Undesirable Practices) (No 2) 1991
25
Tell me three key issues raised in the RICS Real Estate Agency and Brokerage Standards / RICS Commercial Real Estate Agency (Purple Book).
CAMPSHIRT DVC
1) Do the utmost to avoid conflicts of interests and where they do arise, deal with them openly and fairly
2) All advertising and marketing material is honest and truthful
3) Any client money is held separately and is covered by adequate insurance
4) Hold appropriate PII/errors or omissions insurance to ensure a customer does not suffer a loss because of a negligent act
5) Carry out work with due skill, care and diligence and ensure all staff employed have the necessary skills to carry out their tasks
6) Act in an honest, fair, transparent and professional manner
7) Make it clear the identity of your client and ensure all parties are clear of your obligations to each party.
8) Give realistic assessments of selling prices/rents/financial costs having regard to market evidence and using best professional judgement
9) Ensure that clients are provided with terms of business that are fair and clear, with details of the firm’s complaints handling procedure
DVC
10) Not to discriminate unfairly in any dealings
11) Ensure all meetings, inspections and viewings are carried out in accordance with the client’s wishes having due regard to security and personal safety
12) All communications with clients are fair, decent clear, timely and transparent
26
Tell me about a factor which drives property markets.
Economy, politics, interest rates
27
Tell me about supply and demand in a property market you are familiar with.
Redbridge – demand exceeds supply. Particularly for larger (3 bed+) homes. Emphasis from the LPA to push through schemes with larger homes rather than the 1/2beds which developers prefer.
28
Tell me about government incentives which impact demand in relation to your purchase & sale work.
Help to buy – e.g. 5% deposit on new-builds for first time buyers. Increases the demand for small new build properties.
29
What are current SDLT levels for commercial property?
Up to £150,000 - 0%
Between £150,001 and £250,000 - 2%
Over £250,000 - 5%
30
What are current SDLT levels for residential property?
```
Up to £125,000 – 0%
£125,001 - £250,000 – 2%
£250,001 - £925,000 – 5%
£925,001 - £1,500,000 – 10%
Over £1,500,000 – 12%
```
31
What are the different types of interest in land?
Freehold, leasehold, concurrent and equitable estates
32
What is the difference between freehold and leasehold?
Freehold – the building and the land is owned exclusively
| Leasehold – have a lease from the freeholder
33
Why would you use online marketing for a purchase/sale transaction?
Cheap, wide target audience, easy to update/amend.
34
Why would you use a marketing board for a purchase/sale transaction?
To reach a wider target audience, i.e. a local audience
35
Tell me about an information pack you have prepared for a purchase/sale transaction.
Nelson Road – Auction property. Prepared various DD surveys, including arbo, EPC, title documents
36
Tell me about CPSEs and the sale process.
Commercial Property Enquiry Forms – it is a thorough set of enquiries used with the intention that a through set of replies can facilitate a speedy conclusion to a deal. If not answered may hold up the sale.
37
What is a Memorandum of Sale?
The memorandum of sale is an important document, it confirms the point at which a property sale has been agreed by both the buyer and the seller (vendor). The memorandum of sale should be issued by the estate agent as soon as the property offer is formally agreed.
38
Talk me through a survey you instructed and why.
| Arboricultural
The site was well covered by trees – an arboricultural survey would help de-risk the site for a potential purchaser because it would remove some of the doubt about the potential impact these trees could have on the development. LPA would often request this with planning application.
39
What are the EPC requirements for commercial property in relation to MEES?
- New leases F and G no longer able to be leased from April 2018.
- Existing leases from 2023
40
Explain a factor which impacts upon sale value/sale terms.
Location, covenant strength, lease terms, condition
41
Explain an example of when you have provided marketing/sale strategy to a client.
If we take the example from my case study I worked alongside the marketing agent to develop the marketing strategy which involved a marketing V board, listing on Rightmove and Zoopla, advertising in the agents shop window. Furthermore, I suggested advertising on local property websites as the property hadn’t appealed to the typical buyer of a national auction firm, possibly with a national audience.
42
Talk me through an example of when you have purchased/sold a commercial property.
1. I inspected and measured
2. I instructed and reviewed due diligence (Arbo)
3. Reviewed local market and spoke to agents of similar sites.
4. Recommended sale by private treaty (knowing I could use informal tender to bring negotiations to a close if I decided so)
5. Approved marketing particulars
6. Set the asking price in line with external valuation
7. 2 offers
8. I recommended accepting cash offer for quicker sale
9. Completed legal enquiries
10. Oversaw exchange and completion of sale
43
Talk me through your long LH disposal at Durham.
1. Desktop Inspection
2. Reviewed legal due diligence including RoT
3. Oversaw tender process
4. Selected successful agent
5. Approved marketing particulars agreed marketing channels.
6. Informal tender - invited bids.
7. Proceeded to best and final
8. Recommended accepted higher offer.
9. Negotiated HoTs
10. Progressed deal to completion
44
How did the lease terms affect value and marketability? (Durham)
The lease terms were generally consummate with a leasehold office property.
45
Why did you think the property had not sold at auction? (Durham)
I felt the marketing period was not long enough, nor did the property appeal to a national audience
46
Why did you recommend pursuing informal tender? (Durham)
I believed with a longer, targeted marketing period this would generate a sufficient level of interest in the property to create competitive tension. I felt the office market in Durham for a property in a retail park was quite niche, and may not have appealed to Allsop’s typical buyer.
47
Who was the likely purchaser? (Durham)
Owner/Occupier
48
How did you market the property?
Marketing on rightmove/zoopla and the agent’s website. Agent also send a marketing shot out to potential purchasers which they had already established a relationship with. I also recommended marketing on local property websites/blogs (businessdurham.co.uk)
49
What is best price defined as?
The best price should take account of all the factors (market conditions, planning position, legal constraints etc.), especially holding costs and other costs required to achieve the sale.
50
Where is this defined? (Best price)
The efficient management of healthcare estates and facilities (HBN 00-08)
51
What did you request with bids? (Durham)
Submit their best bid;
- Required date and time of the receipt of the written offer
- Name and address of the applicant’s solicitor
- Confirmation of finance arrangements
- Details of any conditions attached to the offer
- Confirmation that offers of a variable nature will not be considered
- The vendor reserves the right to not accept the highest, or any, offer made.
52
What key factors affected marketability? (Durham)
Any title restrictions/previous marketing success/lease terms
53
Talk me through your assessment of bids and selection of a preferred bidder? (Durham)
There was 2 unconditional offers in the best and finals stage, one was £15,000 higher than the other. The higher offer was also a cash offer whereas the lower offer required finance. I recommended accepting the higher cash offer.
54
How did best and final bids work? (Durham)
After receiving two bids which were close in terms of price I recommended going to best and final in order to achieve best price for my client.
55
How did you respond to legal enquiries - what issues were raised? (Durham)
Legal enquiries were generally made in the form of a CPSE form, this included information on physical condition of the property, asbestos report etc as well at utilities information.
56
What was the outcome of your disposal?
The property successfully exchanged and completed within my client’s desired timeframe.
57
Talk me through your Kent disposal.
1. I inspected and measured
2. I instructed and reviewed due diligence (Arbo)
3. Reviewed local market and spoke to agents of similar sites.
4. Recommended sale by private treaty (knowing I could use informal tender to bring negotiations to a close if I decided so)
5. Approved marketing particulars
6. Set the asking price in line with external valuation
7. 2 offers
8. I recommended accepting cash offer for quicker sale
9. Completed legal enquiries
10. Oversaw exchange and completion of sale
58
What advice did you provide on marketing, quoting terms and sale method? (Kent)
- After gathering comparable evidence I advised on the method of sale, private treaty.
- After analysis of my comparable evidence I advised on quoting price in line with my client’s external valuation as per internal governance.
- I advised on the marketing channels to use for example Rightmove/Zoopla and local property websites/newspapers.
59
How did you report offers in line with the Purple Book? (Kent)
I detailed the offers as soon as was reasonably possible in writing to my client.
60
How did you carry out AML checks?
I didn’t personally undertake the checks the agent did, but I have familiarity with smartsearch platform which was used and I reviewed the smartsearch check to ensure the purchaser had passed.
61
Which offer did you recommend accepting and why?
I recommended accepting the cash offer over the one which required finance, as they offers were at the same level I advised my client that there would be less risk and the possibility of quicker completion of sale accepting the cash offer as the loan process may have delayed proceedings.
62
Why did you pursue informal tender if little interest? (Durham)
I felt that with a longer marketing period and more targeted marketing that we could generate sufficient interest for a successful sale by informal tender.
63
What did you include in the marketing particulars? (Durham)
- Address
- Size
- Use class
- Description
- Tenure
- EPC
- Agent contact details
64
What legal enquiries were raised? (Durham)
CPSE form – included enquiries about utilities, insurance, lease etc.
65
What DD did you instruct for Kent?
Arboricultural - The site was well covered by trees – an arboricultural survey would help de-risk the site for a potential purchaser because it would remove some of the doubt about the potential impact these trees could have on the development. LPA would often request this with planning application.
66
Why did you recommend accepting the cash offer over finance?
Speed – the offers were the same level and due to one of the client’s aims being to reduce holding costs I advised that accepting the cash offer would likely mean to sale could complete quicker, as the finance offer also required waiting until the potential purchaser had sold their house in Manchester.
67
Talk me through your advice to maximise value at Southwark.
1. I inspected site but didn’t measure buildings – Desktop inspection highlighted asbestos present.
2. Instructed topographical, arboricultural and ecology surveys.
3. I advised on the market and the most likely purchaser
4. I advised Pre-app feedback should be sought
5. Marketed the site (informal tender)
6. I analysed bids (NPV)
7. I advised that the unconditional offer should be accepted as this represented best price.
68
What surveys did you recommend and why? (Southwark)
Topographical survey – to de-risk the site for a purchaser in order to maximise the value. Topographical survey can reveal information about the topography of the land which may be hidden from plain sight. Knowing the topography is important to ensure a durable construction and reduces the risk of costly downstream mistakes caused by unforeseen issues.
Arboricultural - The site was well covered by trees – an arboricultural survey would help de-risk the site for a potential purchaser because it would remove some of the doubt about the potential impact these trees could have on the development. LPA would often request this with planning application.
Ecology Survey – LPA would likely request it due to the amount of trees and hedging on site. An ecology survey can assess an area for valuable plants, habitats and animals so that the local planning authority has enough information to make a proper decision on whether the development would have an adverse effect on wildlife in the area.
69
How did you assess market value (challenge external valuation)? (Southwark)
The three-bed comparable evidence was in my opinion not robust enough (only from one scheme). I requested that more comparable evidence was gained for new build 3 beds to ensure the assumption was accurate.
70
What was included within the Heads of Terms? (Southwark)
* Seller
* Buyer
* Property
* Purchase Price
* Exchange and completion (February 16th, 2018 – after board approval on 30th January).
* Japanese Knotweed – seller suspects knotweed present, buyer acknowledges this and accepts this. Does not entitle the buyer to refuse to complete nor any reduction in the purchaser price.
* Costs
* Solicitors
71
How did you advise on the planning position? (Southwark)
The current planning use class was D1 (healthcare). I advised that any purchaser would need to provide evidence for the loss of D1 use and that there was no longer a health requirement for the property, a letter from the clinical commissioning group would likely suffice.
72
Why was pre-application advice sought? (Southwark)
To crystallise value – establishing principles such as a residential development being acceptable as well as establishing heights and massing of the development will provide any purchaser with comfort and hence increase the level of offer received.
73
How would this reduce risk? (Pre-app Southwark)
Having formal feedback from the LPA in regard to heights/massing and the change of use would provide comfort to the developer that their development would be acceptable.
74
Talk me through your advice to sell by informal tender (Southwark)
I knew the property would attract a high level of interest, Southwark being an inner London Borough, with high values offers a lot of potential to a developer. I thought the bidding process would create a high level of competitive tension.
75
What did you include in the marketing particulars?(Southwark)
Address, Site area, PTAL, Transport, Picture of the site, contact information for the agents
76
What did you request with the Bids? (Southwark)
1. Purchaser(s) Identity
2. Solicitor’s Details and Professional Advisors
3. Purchase Price
4. Conditions
5. Funding
6. Approvals
7. Overage / Clawback
8. Planning Proposals
9. Timescale
10. Data room
11. Inspection
12. Additional Information
77
How did you advise on the preferred offer? (Southwark)
Analysed on conditionality, price and deliverability. I.e. conditional/unconditional, whether and board approvals are needed, funding source. If subject to planning – deliverability of the scheme i.e. 90 units and 7 storeys based on pre-app feedback would be unlikely.
78
How did you advise on the Hayes Disposal?
1. I inspected and measured
2. I instructed and reviewed legal due diligence
3. Restriction on title – preventing the registering of the title, sought legal advice > applied to LR for removal. The reason that we were able to easily remove the restriction in this instance appears to be because the restriction did not apply to the Department of Health as it is not a charity (RX3 form not required)
4. I researched comparable evidence
5. I advised the client my opinion of value
6. I recommended a sale via auction due to the timeframe objective which the client had
7. Property sold in excess of the reserve and I oversaw exchange and completion
79
Where did you source the ROT from for Hayes?
Via the inhouse legal team and subsequently our external legal firm.
80
What issue did this raise and how did you overcome it?
Restriction preventing the title being registered without the charity commission’s consent. If a potential purchaser had concerns that they would be unable to register the title after purchasing the property was then unlikely to achieve best price.
81
How can a title restriction be removed?
An application to the land registry only
82
How can a restrictive covenant be removed?
Express Release – you may be able to negotiate an express release of the restrictive covenants from the owner of the benefiting land however, the owner will most likely require a cash payment for this release; or
Land Registry Application – in some cases the restrictive covenants will have a time limit on their effect or were not registered as land charges (if unregistered) so are ineffective. In which case you can apply to the land registry to remove the entry from the register of the property; or
Indemnity Insurance – if the restrictive covenants are very old then it is more than likely that you will be able to pay a one off premium for legal indemnity insurance to cover the risk of building on the property and then subsequently receiving a notice of breach; or
Upper Tribunal (Lands Chamber) – if you cannot obtain an express release or insurance cover for the risk of breach, then you can make an application to the Upper Tribunal (Lands Chamber) for the modification or discharge of the restrictive covenant in question. The Upper Tribunal can order payment of compensation to those who benefit from the restrictive covenants, or make up for any reduction in the price received for the land due to the imposition of the covenant.
83
How do positive and restrictive covenants differ?
A negative obligation is often referred to as a restrictive covenant. Restrictive covenants are rules preventing certain things from being done on the land, such as keeping animals or using the property for business purposes.
Positive covenants - are obligations to do something, such as keep contribute to a maintenance fund or maintain a wall.
84
How did the title restriction on Hayes affect value?
It didn’t affect value as it was removed before marketing the property. Extra holding costs were incurred whilst awaiting for the outcome of our application to the LR however.
85
What was the outcome of your advice? (Hayes)
The client accepted my advice and we awaited the outcome of the application from the land registry before marketing the property, with the restriction removed. We were able to apply to the land registry to remove it as we felt it was no longer relevant because the DoH are not a charity
86
Talk me through the process of an acquisition
1. Instruction
2. Conflicts of interest
3. Competence
4. Money laundering
5. Terms of engagement
6. Understand clients objectives and agree search parameters
7. Search for property
8. Undertake DD – anything that might impact on value (flood risk, contamination, restrictive covenant, tenant covenant strength, any rental arrears, any service charge arrears
9. Provide client with valuation
10. Negotiate HoTs
11. Instruct solicitors to draft contract for sale
12. Monitor legal process to completion
13. Issue invoice.
87
Why did you recommend the DD which you did for Southwark?
Topographical survey – to de-risk the site for a purchaser in order to maximise the value. Topographical survey can reveal information about the topography of the land which may be hidden from plain sight. Knowing the topography is important to ensure a durable construction and reduces the risk of costly downstream mistakes caused by unforeseen issues.
Arboricultural - The site was well covered by trees – an arboricultural survey would help de-risk the site for a potential purchaser because it would remove some of the doubt about the potential impact these trees could have on the development. LPA would often request this with planning application.
Ecology Survey – LPA would likely request it due to the amount of trees and hedging on site. An ecology survey can assess an area for valuable plants, habitats and animals so that the local planning authority has enough information to make a proper decision on whether the development would have an adverse effect on wildlife in the area.
88
Did you consider other methods other than informal tender? (Southwark)
All other methods were considered but we thought due to the nature of the property and the high level of interest pre-marketing that informal tender, likely with a best bids would offer the best chance of securing best price.
89
How much was the accepted cash bid? (Southwark)
£8.3m
90
How did you assess deliverability? (planning consultant?)
I assessed deliverability with the planning consultants. I consulted planning policy, the pre-app feedback and then formed any opinion about how likely the scheme was to be delivered.
91
What is the difference between a restriction on title and a restrictive covenant?
This basically prevents the owner of the property from registering a disposal of the property at the Land Registry without complying with the terms of the restriction. Such restriction on title is often used to protect overage and claw back provisions, for example. In the Stanwell Road matter, the restriction on title was a standard restriction put on title when the property was owned by a charity (hence the reason for the ease of its removal)
the restrictive covenant it may not be possible to get title indemnity insurance so bear this in mind if you choose to go down this route.
- A restrictive covenant is an agreement to restrict the use of land in some way for the benefit of other land
- They are usually enforceable by successors as they run with the land
- To remove a restrictive covenant an application has to be made to the Upper Tribunal (Lands Chamber) but the grounds for discharge are very strict. In some instances, title indemnity insurance can be procured
92
When can you apply to the land registry to have a restriction removed?
* If a restriction is no longer required – rule 97 of the Land Registry Rules 2003, anyone can apply to cancel a restriction
* As mentioned earlier the Land registry can remove a restriction if they feel it be superfluous
93
Why did you think that marketing with the restriction would mean the highest value was not achieved? (Hayes)
If potential purchasers had concern that they would not be able to register the title after purchasing this would likely mean less people would bid in the room and as a result the highest value would not be obtained.
94
Could you have not declared the restriction and hoped it went unnoticed?
No, in line with UK commercial real estate agency, 2016 (1st edition) - if you are aware of legal matters restricting the use of land, you should declare their existence (e.g. ‘subject to restrictive covenants’) and/or make copies available for inspection at your office. Where the situation is complex or where there is doubt, you should arrange for the seller to explain matters directly to the potential buyer.
CPR 2008 states agents must declare everything known about a property good and bad.
- CPR also prevents omitting material information.
95
Can you run me through the structure of a report on title?
1. INTERPRETATION
2. SCOPE OF THE REVIEW AND LIMITATION OF LIABILITY
3. EXECUTIVE SUMMARY
4. THE PROPERTY
5. MATTERS BENEFITING THE PROPERTY (Rights, easements or covenants over other property)
6. MATTERS BURDENING THE PROPERTY (Covenants positive or restrictive)
7. SEARCH RESULTS
8. CONCLUSION
96
What are the penalties under the Estate Agents Act 1979?
- Act policed by Trading Standards Office of the local authority
- Negative Licensing - the right to be an estate agent taken away and not granted
- Act allows for prohibition or warning order to be made against an agent
- Prohibition order stops an agent practising
- Warning order less punitive it just gives written warning not to undertake an action again
- Can be against individual or a practice and costs can be awarded
97
What was your rental/yield evidence for Durham?
Rental evidence: £9-12psf
| Yield 9%
98
What were some of the key lease terms for Durham?
User Class: Restricts use to B1 or A2 - financial and professional services and businesses
- No structural alterations other than repairing of defects
- Repair and keep in good condition at all times
May assign or underlet is new lease imposes same restrictions
- No mention of LTA 24-28
- Landlord insures the property and plant - tenant pays 25%
- SC usual quarter days (circa £100pm)
99
What are some of the things included in the HoTs for Durham?
1) Vendor
2) Vendors solicitor
3) Purchaser
4) Purchaser’s solicitor
5) Vendors agent
6) Purchaser’s agent
7) Demise
8) Tenure
9) Purchase price
10) Deposit
11) Timing
12) VAT
13) Funding
14) Costs
15) Conditions
These terms are subject to the following conditions:
Subject to contract
Subject to final Vendor Board approval
Survey
100
Can you talk me through the Background for Hayes?
- Owner occupiers may be dissuaded given the level of up front capital and mortgage requirements to facilitate purchase of the asset, Accordingly a property of this stature would be suited to a local investor or developer
- Can only be used for residential
- Predominantly residential area comprising a mix of semi-detached and terraced 2 storey houses.
- Hayes and Harlington train station 0.9 miles
- Hayes and Harlington will also benefit from upcoming Crossrail
- Site area 0.2Ha
- Average condition
- Comparables around £450,000 (£450-£550psf)
101
What do you mean to ensure that the disposal process was open and transparent? (Southwark)
NHS PS are require to ensure not sales are made off market, and so as part of the open market transaction I recommended placing on the market via informal tender.
102
What is the purpose of an ecology survey?
To inform the potential ecological constraints of proposed future development
- to identify the major habitats present;
- to identify the potential for any legally protected species to be present; and
- to recommend any additional ecological surveys, if required.
103
What does an ecology survey consist of?
The desktop study involved conducting database search of legally protected species and features of interest within a 1km radius of the site.
The field survey comprised a walkover inspection of the land and habitats present. The survey followed standard Phase 1 survey methodology and covered all accessible parts of the site, including boundary features. Habitats were described and mapped =. A list of plant species was compiled.
This assessment provides information on the habitats in the survey area and identifies actual or potential presence of legally protected or otherwise notable
species/habitats in or immediately adjacent to the site.
104
What was the outcome of the ecology survey?
Habitats within the site were assessed as being of value to wildlife within the local and immediate vicinity only.
In order to avoid any potential impact on breeding birds, clearance should avoid the main bird nesting
season which runs from March to August. Where this is not possible, an ecologist would need to check the vegetation for active nests and signs of bird breeding activity.
105
What was the outcome of the arbocultural survey?
The trees that will be required to be removed from the development were considered to be of low quality and replacement planting with suitable species in
an appropriate location during the soft landscaping phase of construction is considered to be sufficient mitigation to compensate for the loss of these trees.
The root protection area of the off-site tree (T10) is likely to extend into the site and consideration should be given to design proposals to avoid impacting the root
protection area of this tree.
106
What would happen in the event a bird nest is found?
In the event that a nest is found, an exclusion zone around the nest would be established. Works would have to cease within this buffer area until the young
birds have fledged.
107
How might you assess a buyers 'track record' in relation to their likelihood to complete on a sale.
- Request evidence of previous transactions, e.g. a reference from a vendor.
- Have they stuck to what they said on previous transactions.
- Profit and loss account (for leases)
108
What is Transfer of going concern?
If a property is VAT elected you would normally have to charge VAT on the purchase price.
By transferring as a going concern you can avoid this.
