The main tasks of the solicitors in the pre-completion stage
- Preparation of the transfer deed
- Pre-completion searches
- Making practical arrangements for completion
- Ensuring the finances are in order for completion
Individual executing transfer deed - requirements
Signature must be witnessed by an independent witness
Ways a company can execute a transfer deed
(i) using the company seal in accordance with the articles of association
(ii) signed by a director and the secretary, or by two directors of the company,
provided that the deed is expressed to be executed by the company
(iii) signed by a single director in the presence of a witness who then attests that signature
When is a deed presumed to be delivered?
How can you delay delivery?
Document makes it clear on the face of that it is intended to be a deed, presumed to be delivered on execution.
if the client has signed the transfer but does not intend it to come into force yet, their solicitor needs to expressly say so in the covering letter when sending the deed.
Which forms/ docs are used for transfer deeds? (reg & unreg)
Registered:
TR1: transfer deed
TP1: transfer of part
Unregistered:
Land Registry forms (as subjec to compulsory registration)
Conveyance also possible
Who prepares & executes the transfer deed?
Conventionally, the transfer deed is completed by the buyer’s solicitor and sent to the seller’s solicitor for agreement immediately after exchange of contracts,
In straightforward residential transactions the transfer deed may be prepared by the seller’s solicitor and sent to the buyer’s solicitor in the pre-exchange package.
Seller will always execute the transfer deed in order to transfer the land
Buyer will if entering into an obligation or making a declaration in the TR1 (indemnity covenant or beneficial interest under trust)
TR1: when is the transfer dated?
On completion
TR1: what details should be checked against the contract and the official copies
Panel 1: Title number
2: address
4 & 5: names of transferor & transforees
TR1, panels 4 & 5: how should a company or LLP be named as transferor/ee
Include registered number of company or limited liability partnership including any prefix
TR1, panels 4 & 5: overseas companies
(a) Territory of incorporation:
(b) Registered number in the United Kingdom including any prefix
Overseas co as transferee, must lodge:
* certificate in Form 7 in Schedule 3 to the Land Registration Rules 2003
* certified copy of the constitution in English or Welsh,
* other evidence permitted by rule 183 of the Land Registration Rules 2003.
TR1 panel 6: transferee’s addres
What for?
How many?
Types of address?
Transferee’s intended address(es) for service for entry in the register
Up to 3 addresses
Postal address (atleast 1)
UKDX box number
Electronic address
TR1 panel 9: title guarantee. What happens if there is a second trustee who is giving limited or no title guarantee?
Do not select either box, and add text that 1 owner (main seller) is giving full title guarantee & 2nd trustee is giving limited / no title guarantee
TR1 panel 10: declaration of trust - what happens if this is selected?
The registrar will enter a Form A restriction in the register unless:
— an ‘X’ is placed:
* in the first box, declaring that they are joint tenants
* in the third box and the details of the trust or of the trust instrument show that the transferees are to hold the property on trust for themselves alone as joint tenants, or
— it is clear from completion of a form JO lodged with this application that the transferees are to hold the property on trust for themselves alone as joint tenants.
If no boxes selected- default position is LR puts restriction on register
TRI - panels
Title number (blank if unregistered
Property
Date (on completion)
Transferor
Transferee (note co/LLP/overseas co)
Transferee’s address for service for entry (up to 3; post, UK DX, electronic)
‘The transferor transfers the property to the transferee’
Consideration (in figures & words)
Title guarantee
Declaration of trust
Additional provisions (required or permitted statement, certificate or application; any agreed covenants, declarations, etc)
Execution (all transferors & transferees)
Purposes of pre-completion searches
1 To make sure that the seller has not further encumbered the title since investigation of title
2 To check the financial circumstances of the borrower when acting for the lender
3 To gain priority for the buyer, and the lender, over anyone else making an application before registration of buyer
4 If seller is a company, to check that the company has not gone into liquidation before the balance of the purchase price is paid over on completion.
Pre-completion search of the title: registered land
Where?
Application form?
Search against?
Fee?
Result form?
What does this reveal?
Priority period?
Land Registry
Form: OS1 (or OS2 for sale of part)
Search against: title number
Fee: standard fee for each search fee
Result form: OSR1 (or OSR2)
Reveals: any new entries made since the ‘search from’ date
Priority period: 30 working days (by 12 noon on final day)
What needs to be included on application for OS1 & OS2
- title number
- address of the property
- Local authority (where council tax/ business rates usually paid)
- names of the registered proprietors (more than 2, first 2 only)
- name of the applicant
- ‘Seach from date’
- reason for the search
- Signed by conveyancer, or if none, applicant
OS2:
A plan will ordinarily need to accompany OS2
unless a layout plan has been approved by the Land Registry, which is often the case in new housing developments
If buyer purchasing with aid of mortgage, whose name is OS1/2 made in?
Search should be in the name of the lender and not the buyer.
That way the results will confer priority upon both the buyer and the lender since the mortgage is deemed to take place slightly after the purchase by the buyer.
A search made on behalf of the buyer will not protect the lender.
Pre-completion search of the title: unregistered land
Where?
Application form?
Search against?
Fee?
Result form?
What does this reveal?
Priority period?
Land Charges Department
K15
current seller’s name
fee for each name searched
K18
Adverse entries made against seller’s name since pre-contract search.
15 working days
Company search against a company seller
Reveals whether:
* seller is still in existence,
* solvent
* created any fixed or floating charges
NO priority period: carried out as close as possible to the day of completion
Telephone search at the Registry of Winding Up Petitions at the Companies Court
On day of completion
* transaction is particularly high value
* reason to be concerned about the solvency of seller /borrower
Bankruptcy search against an individual seller
Necessary (reg/ unreg)?
Unregistered: revealed on K15
Registered land: usually not considered necessary
86(5) LRA 2002: if no notice / restriction relating to bankruptcy, a buyer for value acting in good faith without notice of the bankruptcy petition or adjudication will take good title from the bankrupt seller, even though legal title to the land has vested in the trustee in bankruptcy
May be necessary if transaction is particularly
high value or there is reason to be concerned about the solvency of the individual seller.
Practical arrangements for completion
Form TA13 Completion information and undertakings
- arrangements for handing over keys
- place and method of completion
- documents to be handed over at completion
- exact amount payable by the buyer on completion
- Bank account for payment
- Undertaking from seller’s solicitor to redeem the mortgage out of the completion money on completion
TA13: asks seller’s solicitor lists mortgages & charges secured on the property and whether they ‘undertake to redeem or discharge the [listed mortgages and charges] on completion and to send to us Form DS1, DS3, the receipted charge(s) or confirmation that notice of release or discharge in electronic form has been given to the Land Registry as soon as you receive them?’. The reply ‘Yes’ is treated as an undertaking.
Ensuring the finances are in order for completion: what does lender expect to recieve before releasing mortgage advance?
- Certificate of title
- Solvency search against borrowers
- Clear OS1R in the name of lender
- executed but not completed mortgage deed
Ensuring the finances are in order for completion:
Steps for buyer’s solicitor
- Buyer’s solicitor sends a Financial Statement to buyer advising of funds needed to complete.
Statment = amount to be forwarded by the buyer to its solicitor:
balance of the purchase price
SDLT/LTT due
registration fee
amount outstanding for other disbursements (eg, solicitor’s fees) - Buyer’s solicitor ensures they have received mortgage advance from lender and balance of the purchase price from the buyer client.
- balance of the purchase price sent to seller’s solicitor (bank account specified in the replies to the Completion information form)
- Buyer’s solicitor notifies seller’s solicitor that the money is on its way.
- Once money received, seller’s solicitor contacts buyer’s solicitor and completion will take place.
