After exchange of contracts, the transfer deed needs to be drafted and sent to seller’s solicitor for approval. What is the form called that is used?
TR1
In event that a second trustee needs to be appointed what wording needs to be included in panel 11?
For the purpose of giving a valid receipt for the purchase price, [NAME OF SOLE PROPRIETOR] (‘Current Trustee’) in exercise of the power under section 36(6) of the Trustee Act 1925 appoints [NAME OF ADDITIONAL TRUSTEE] to be a trustee of the Property with the Current Trustee.’
What form needs to be sent next/ with the TR1?
TA13 which buyer sends to seller’s sol to confirm undertakings and practical information:
- Undertaking that seller’s sol will forward sufficient monies for the discharge of the mortgage immediately on completion taking place.
- Seller’s completion statement setting out balance of funds required for completion.
- Bank details of seller’s sol.
- Where keys are to be collected from.
What are the steps in regards to finance that both sides must take post exchange of contracts?
- Seller’s sol completion statement - usually in TA13.
- Buyer’s financial statement to buyer - total cost of transaction for buyer including legal fees, SDLT, registration fees etc
- Paramount that the sources of funding for buyer are all cleared prior to completion - in house accounting, cheque clearances, notice to bank if on deposit…
(Large commercial transactions may come from merchant lender (pension fund or insurance co) - time for clearing again needs to be considered) - Certificate of title - the draft form was sent prior to exchange, (the final signed form sent at completion) - buyer’s sol chases up to ensure funds will be available on completion date
What part of the SRA code should you bare in mind regarding the potential to act for lender and borrower? Dealt with in detail in SGS 5.
O(3.5) - not permitted to act for more than one party where there is a significant risk of client conflict.
Why is it essential that you carry out an OS1 post exchange and pre-completion?
- To check whether any adverse entries have been made on the register since the buyer’s first search/ search from date of the OCs. e.g. new mortgages, easements, covenants, or deed of variation on an easement.
- Provides a priority period of 30 working days within which the buyer can register the sale and take free of any other entries made in that period.
Why should a solvency search be made against a company on the morning of completion?
Whilst you will have already conducted a solvency search, as this does not confer a priority period it is best practice to update this on morning of completion.
It is prudent to discover if company’s assets have any floating charges pending insolvency and if liquidator has been appointed!
What are the three steps the seller’s sol must do pre-completion?
- Reply to buyer’s sol TA13.
- Which also involves preparing a completion statement for buyer’s sol re final amount required for completion.
- Request redemption statement from seller’s lender if there is a mortgage which needs to be discharged.
- Agree the TR1 and arrange for it to be executed by the seller.
Once the TR1 is agreed by both seller and buyer what will the buyer’s solicitor send to the seller’s sol?
- An ‘engrossment’ of the TR1 i.e. the final form of the TR1 for execution by the seller.
What requirements for proper execution of a deed are set out in s.1(3) of the LP(MP)A 1989?
An instrument is validly executed as a deed by an individual if, and only if -
- Signed, in presence of a witness who attests the signature (signature of witness plus name, address, occupation)
OR
- signed at their direction in their presence and the presence of TWO witnesses
AND
- is delivered as a DEED (it must state it is a deed on its face) by them or person authorised to do so - also will say ‘signed as a deed’ or ‘Executed as a Deed’
What wording would you expect in a valid execution clause of an individual?
Signed as a deed and delivered by [name] …………
In the presence of:
Signature of Witness: …………..
Name:
Address:
Occupation:
What act and which sections governs execution clauses for companies?
Companies Act 2006 ss. 44(1) and (2).
Can execute by 2 authorised signatories or by one director in presence of independent witness.
What does a correct execution clause executed by 2 authorised signatories look like for companies?
Executed as a Deed by [X Limited] acting by [a director and its secretary] / [two directors]
Signature [director] ………
Signature [director / secretary] ……….
What does a correct execution clause of one director and independent witness look like?
Executed as a Deed by [X Ltd] acting by a director in the presence of:
[Signature of director] ………………
Signature of a Witness: ………………………
Name:
Address:
Occupation:
If there is a delay of completion how do you calculate compensation?
Contract rate of purchase price minus any deposit paid for the period between agreed completion and actual. This is all days of the week!
Remember if using SCPC default position is by 2pm. So if completion is after then this effectively means an extra day!
What formula is required for completion over the phone?
Law Society’s ‘Formula B’
What is the DS1 and who has to send it to who?
It is the official form upon which confirmation of discharge of mortgage is recorded. i.e. proof that the lender no longer holds a charge over the property as security.
The seller will send to buyer post completion.
What steps must the buyer’s sol take post completion?
- Ensure all original documents received - planning consents, building regs approvals, insurance policies.
Especially important are the TR1 and DS1 (if relevant).
- Registration of security - ONLY relevant if COMPANY that bought with aid of MORTGAGE - which will mean a
Certificate of Registration
of Charge is obtained which is required to register title at Land Registry!
AP1:
Whether a company or an individual a charge by way of legal mortgage must be perfected by registration at the LR.
- Pay SDLT. Receive SDLT 5.
- Register at Land Registry!
What is form MR01 for and within what time limit must it be used?
What should then be received on successful registration?
The MR01 is the form required for the registration of a legal charge by a company. It must be completed and sent to Companies House with fee within 21 days, beginning with date after creation of charge, in order that it is valid against 3rd parties and has priority over other creditors.
Companies House will send a Certificate of Registration of Charge - which is needed to register title at Land Registry.
What is form AP1 for? What should it be accompanied by if a company?
The AP1 is the form required to apply for registration of a legal mortgage at the Land Registry.
If a company this needs to be sent along with the Cert of Reg of Charge.
What is SDLT payable on and what must you obtain to be able to register transfer of the property?
SDLT is payable on properties above a certain value.
Can be submitted online or via SDLT1. HMRC will send back SDLT 5.
What is the deadline for payment of SDLT, what must you be aware of re the ‘effective date’?
The deadline is 14 days from the effective date, which is usually completion, but if there is early occupation of the property then the ED is when early occupation started.
What documents must be sent in order to register a transfer of property at LR?
Form AP1, fee and certified copies of the following:
- TR1
- DS1 if SELLER had mortgage
- Legal Charge or Debenture relating to BUYER’s mortgage
- Reg Cert of Charge from Co’s House if relevant
- SDLT5
What sections of the LRA 2002 deal with requirement to register a sale (transfer) of land?
ss.4(1) and (2) and 27(2)(a)
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Registered property: title investigation54
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Planning and pre-contract searches and enquiries31
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Drafting the contract and exchange of contracts31
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Pre-completion, completion and post (registered land)31
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PCR, FSMA and MLR8
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Chapter 10 revision tips15
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Unregistered land sgs 634
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Notes from chapter 126
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Lecture 2 notes37
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Drafting45
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Lecture 4 - Pre-completion steps14
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Lecture 4 - completion, post completion and remedies15
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FSMA and RAO lecture4
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Security of tenure32
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Contents of a lease35
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Contents of a lease part 217
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Rent review, alienation and LL licences29
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Crim lit lecture 112
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Crim Lit Lecture 226
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Crim lecture 312
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Civ Lit 1,2,322
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Civil Lit SGS 13
