Completion and Post-completion steps

Question 1

What happens when contracts are exchanged?

Answer 1

Both parties are bound to complete the transaction on the agreed terms.

Question 2

Is there a binding agreement before exchange?

Answer 2

No, either party can withdraw before exchange without penalty.

Question 3

What actions must solicitors take after exchange?

Answer 3

Notify clients that exchange has occurred.

Fulfill any undertakings made during exchange (e.g., sending signed contracts with completion date).

Question 4

How long does completion typically take after exchange?

Answer 4

Usually 2 weeks, but traditionally 4 weeks. It can also happen on the same day as exchange.

Question 5

What are the main tasks of solicitors before completion?

Answer 5

Prepare Transfer Deed.

Conduct pre-completion searches.

Organize practical arrangements (e.g., keys, completion funds).

Ensure finances are in order (e.g., mortgage, deposit).

Question 6

How must the transfer deed be executed?

Answer 6

Individual: Signed and witnessed by an independent person.

Company: Executed by one of these methods:

Company seal.

Signed by 2 directors or 1 director + secretary.

Single director with witness.

Question 7

What form is used for the transfer of land?

Answer 7

Registered Land: TR1 form (TP1 for transfers of part).

Unregistered Land: Typically a Conveyance or TR1.

Question 8

When is the Transfer Deed considered delivered?

Answer 8

Presumed delivered on execution unless stated otherwise by the client.

Question 9

Why are pre-completion searches necessary?

Answer 9

To check for any encumbrances, ensure no new charges have been registered, and verify the buyer’s finances.

Question 10

What types of pre-completion searches are common?

Answer 10

Land Registry Search: Ensures no new entries on registered land.

Land Charges Search: For unregistered land, checks solvency of the seller (K15 form for bankruptcy).

Question 11

What is the purpose of a Land Registry search?

Answer 11

To gain priority over anyone else who may register an interest in the property.

Question 12

What does the Completion Information Form (TA13) ensure?

Answer 12

It ensures that both parties agree on practical details like keys, completion location, and documents to be exchanged.

Question 13

What must the seller’s solicitor confirm on the TA13?

Answer 13

That they will redeem any mortgage.

The details for handing over keys and documents.

Question 14

What documents are required before completion?

Answer 14

Certificate of Title: Given to the lender by the buyer’s solicitor.

Financial Statement: Confirms the balance due at completion.

Mortgage Advance: Ensure mortgage funds are ready to pay the seller.

Question 15

How is completion typically carried out?

Answer 15

In-person Completion: Solicitors meet to exchange documents and funds.

Completion by Post: One solicitor acts as agent for the other, and undertakings are given.

Question 16

When does legal title transfer in registered land?

Answer 16

Legal title passes when the buyer is registered at the Land Registry.

Question 17

When does legal title transfer in unregistered land?

Answer 17

Legal title passes on completion when the documents are exchanged and payment is made.

Question 18

What happens after completion?

Answer 18

Ensure mortgage discharge (if applicable).

Pay SDLT (Stamp Duty Land Tax) or LTT (Land Transaction Tax) within the required timeframe.

Apply for Land Registry registration of the buyer as the new owner and any mortgage.

Question 19

How is the Land Registry notified?

Answer 19

Form AP1 is used to register the buyer as the new owner and any charges (e.g., mortgages).

Question 20

What is the usual completion date after exchange?

Answer 20

Typically 20 working days, though this can be shortened or extended by mutual agreement.

Question 21

What happens if the buyer or seller is late completing?

Answer 21

Compensation: Interest may be charged for delays.

Common Law Damages: The non-defaulting party may claim damages for losses (e.g., storage costs).

Question 22

What is a Notice to Complete?

Answer 22

The non-defaulting party can issue this notice, demanding completion within 10 working days.

Question 23

What is rescission in the context of delayed completion?

Answer 23

The contract can be rescinded if not completed after a notice to complete.