Property Practice - Pre-Completion

Question 1

Seller’s Solicitor

Answer 1

• Applies to lender for up to date redemption figure (actual figure) for existing mortgage calculated up to completion date (earlier in process seller applies to lender for an indicative figure)
• Prepare completion statement: tells solicitor how much money they will net from the sale (sale price - any outgoings)
• If no related purchase the net sale proceeds must be sent to the seller on completion
• If there is a related purchase the net sale proceeds will probably be transferred to the purchase file ledger to use towards purchase proce
• Completes Completion Information and Undertakings form: gives details of client account where purchase money must be sent on completion, confirms amount due on completion and where keys will be left
• Seller’s solicitor also gives undertaking to redeem mortgage out of sale proceeds
• Must arrange for purchase deed to be executed on or before completion

Question 2

Buyer’s solicitor

Answer 2

• Check Completion Information and Undertakings form
• Submit Certificate of Title to lender
• Conduct pre-completion searches
• Prepare purchase deed
• Completion Statement

Question 3

Pre-Completion Searches

Answer 3

Registered Title

Official Search with Priority: done using an OS1 or OS2 form depending on whether the buyer is acquiring the whole or part (e.g. purchasing a new build from a developer) of the registered title

• Due to there often being a few weeks between completion of the transaction and registration the buyer, lessee or mortgagee is not vested with a legal interest (only an equitable interest which requires registration of a notice in the Charges Register)
• Search updates register of title to see if any new interests in the subject property have been added (buyer’s solicitor can then require seller’s solicitor to remove any adverse entries on/before completion)
• Gives buyer’s solicitor a 30 working day priority period within which the transaction must complete and be registered (no new interests can be registered within this period)

Unregistered Title

Land charges search against seller’s name(s): gives a 15 day working priority period within which the transaction must complete

Registration must take place within 2 months of completion

Question 4

Priority Periods

Answer 4

Registered Title: 30 working days to complete and register

Unregistered Title: 15 working days to complete and 2 months to register

Question 5

Purchase Deed

Answer 5

Buyer’s solicitor should draft transfer (most common form of transfer is TR1 form - used where all of the land in a title is being transferred)

Transfers legal estate in property to the buyer

Types of purchase deed:

• Conveyance (only for unregistered land)
• Transfer: can be used to convey all registered and unregistered land (TR1 form - where the whole of the land in the title is being transferred; TP1 form - used where part of land in a title is being transferred)
• Assignment: used for unregistered leasehold land (rare in practice as a TR1 form would be used instead)
• Assent: when personal representatives transfer land to beneficiary (applies to both freehold and leasehold, registered or unregistered land). Does not need to be by deed (does need to be in writing) unless it contains a covenant by the assentee

Question 6

Completion Statement

Answer 6

Details of all of the money required to complete the purchase (e.g. purchase price, legal fees and VAT, search fees, land registry fees and stamp duty land tax)

Any funds due to the firm must be cleared funds by the time of completion to comply with the SRA Account Rules

Question 7

Licence to Assign

Answer 7

If landlord’s consent is required to transfer a lease