Property Practice

Question 1

what should be done before accepting instructions related to property transaction?

Answer 1

AML- reg

verify that the firm can act for this client

Question 2

can an solicitor work for two parties involved in the same property transaction?

Answer 2

generally no - unless one of the below exceptions applies

1 - acting for lender and buyer (only in cases of standard mortgages - not for complex commercial transactions)

2 - acting in intra group transactions or intra-family transactions

in all cases - there needs to be a substantially common interest + informed consent of both parties + the solicitor must be satisfied that it is reasonable to act for both clients

Question 3

what should be done in cases where a solicitor is acting for joint borrowers?

Answer 3

must apply the steps in Etridge when there are tow joint owners placing a charge over a joint owned asset - but only one benefits from the loan

specific steps should be taken to ensure that there is no undue influence from one of the borrowers to the other.

Question 4

what are the steps in Etridge?

Answer 4

1 - lender should provide all the information to the solicitor

2 - the solicitor should

a) explain to the spouse the purpose for which they have become involved

b) explain that the lender will rely on the solicitor’s involvement to counter any suggestion that the spouse has been unduly influenced or has not fully understood the nature of the transaction

c) obtain confirmation from the spouse that they wish the solicitor to act for them in the transaction and to advise them on the legal and practical implications of the transaction

d) solicitor should check if the spouse wishes to proceed and for the solicitor to write a letter to the lender explaining that the spouse has had all the information put to them

• The solicitor should not go forward or confirm until they have received relevant documentation + discussion with the spouse
• If they think the transaction is not in the spouse’s best interest - they should give advice to that effect
• If the undue influence is glaring - they should refuse to act on the matter

Question 5

what are the potential conduct issues raised in property transactions?

Answer 5

1 - contract races

must not mislead the potential buyers

2 - undertakings at completion stage (or at any point really)

Question 6

what are the potential VAT treatment of property transaction?

Answer 6

• The sale of a greenfield site is exempt, subject to the option to tax.
• The supply of construction services is standard rated.
• Professional services, provided by an architect or surveyor for example, are standard rated.
• New built residential - opt to tax - but zero rate VAT
• The sale of a new freehold building is standard rated.
• Only compulsory VAT - commercial properties (would include selling a building of flat aimed at renting income)
• The sale of an old freehold building is exempt, subject to the option to tax.
• Completed three years or more before the sale

The grant of a lease is exempt, subject to the option to tax.

Question 7

what is the purpose of investigating a property tittle?

Answer 7

discover any restrictions on the title preventing its sale

discover any third party rights which may impact the use of thee property by the buyer

Question 8

in registered land - how is the title investigated?

Answer 8

official copies - which must be less than 6 months old - and produced at the expense of the seller.

Question 9

what is included in the official copies?

Answer 9

property register
proprietorship register
charges register

Question 10

what is included in the property register

Answer 10

type of estate
description to the land
title plan

• easements or rights benefiting the land (and obligations with reference to charges reg)
• if anything is excluded from the land

Question 11

what is included in the proprietorship register

Answer 11

class of title
price paid by previous owner if post 2000
indemnity covenants

if the seller is subject to any restrictions of sale

• co-ownership
• lender restriction
• court order restriction

Question 12

what does the charge register include?

Answer 12

covenants affecting the property

easements affecting the land

charges over the land

leases granted

notices registered by third parties claiming an interest in the property

Question 13

when should unregistered land have been registered - and what to do when faced with property that should have been registered

Answer 13

sales past 1990
gifts past 1998

• in those cases - the buyer should require the seller to register the land prior to sale if it has not been done

Question 14

how is the title of an unregistered property investigated? through an epitome of title

Answer 14

seller - produces title deeds

entire - copy of the title deeds, originals on completion

part - copy upon inspection; certified copy upon completion and keep the originals at completion

Question 15

how is good root title determined

Answer 15

conveyance (mortgage / sale) - dated prior to 1990 which

• casts no doubt as to seller’s right to the land
• deals with the entire legal and beneficial interest
• includes an adequate description of the land.

Question 16

upon the analysis of the epitome of title - what should be clear

Answer 16

the chain of ownership - must be uninterrupted

the description of the land must remain unchanged and consistent

Question 17

what are the potential issues around co-owneship regarding unregistered land

Answer 17

TiC -retaining a beneficial interest in the property

Question 18

when there is co-ownership and the epitome of title is silent, what should be presumed?

Answer 18

that it was a joint tenancy (presumed)

presumption holds if

• no memorandum of severance in the epitome of title
• neither of the JT were made BR at any point (PaB // WO(B)) in K15 result
• property sold - after death of one of the JT - by remaining JT as “beneficial owner / sole and beneficiary entitled.

Question 19

what is an important step when considering the epitome of title?

Answer 19

ensuring that all documents have been executed properly

Question 20

how is a deed validly executed - for the purpose of UrL land title investigation?

Answer 20

• in writing
• clear on the face of it that it is a deed
• be signed by the person granting the interest in the presence of a witness who attests the signature
• be delivered as a deed

Question 21

what is the speciality of deeds execution prior to 1990?

Answer 21

a deed had to be signed and sealed by its maker and delivered as a deed.

seal - red circular piece of paper - on the doc - before maker signed

if no deed seal - not a deed - no conveyance of legal estate

Question 22

how to search for land charges in URL?

Answer 22

Central land Charges - form K16 - will reveal any third party rights over the property against an owner of unregistered land

CLC - full name of each owner during the period which they owned the property

Question 23

in URL CLC /investigation of title - what search should be done and on which names?

Answer 23

form K15 CLC search - should be done for the following

• all owners included in the epitome of title
• all other names mentioned since 1926
• all shortened names / different spellings

Question 24

what are the class of charges at the CLC for URL?

Answer 24

C(i) - puisne mortgage
C(iv) - estate contract
D(ii) restrictive covenant
S(iii) an equitable easement

PA(b) - pending action in bankruptcy

WO(B) - person in question is bankrupt