SQE PROPERTY PRACTICE > SQE Property Practice - Completion > Flashcards

SQE Property Practice - Completion Flashcards

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1
Q

what is the sellers role in completion

A

Draft/approve Transfer Deed (TR1) – Rely to Completion Information – Prepare for completion – COMPLETION

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2
Q

what is the buyer’s role

A

Draft/approve Transfer Deed (TR1) – Requestion Completion Information – Pre-Completion Searches – Prepare for Completion - COMPLETION

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3
Q

who drafts the transfer deed

A

Traditionally, the seller’s solicitor drafted the contract, and the buyer’s solicitor drafted the transfer deed.
This is still the default position taken in the Standard Conditions of Sale (SCS) and Standard Commercial Property Conditions (SCPC).

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4
Q

when is a TR1 used

A

the most common, this transfers the whole of a freehold or leasehold title

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5
Q

when is a TP1 used

A

this is used for the transfer of part only of a registered title

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6
Q

when is TR5 used

A

this is used for the transfer of a portfolio of registered titles (and may include unregistered titles

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7
Q

what form is used for unregistered land

A

In practice it is usual to use the Land Registry form TR1, which can be used for unregistered land as well.

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8
Q

what is title 1 on TR1 used for

A

title number

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9
Q

what is panel 2 on TR1 used for

A

property

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10
Q

what is panel 3 on TR1 used for

A

date

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11
Q

what is panel 4 on TR1 used for

A

the transferor

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12
Q

what is panel 5 on TR1 used for

A

the transferee

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13
Q

what is panel 6 on the TR1 used for

A

address for service: Insert the buyer’s address here. Unlike the contract, where the parties’ addresses are their addresses before completion, here a residential buyer will put the address of the property.
An email address can also be provided.
The Land Registry will use the address for service to direct any notices relating to the property.

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14
Q

what is panel 7 on the TR1 used for

A

the transfer wording: This panel contains the wording ‘The transferor transfers the property to the transferee’ which operates to transfer title.
It cannot be amended

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15
Q

what is panel 8 on the TR1 used for

A

There are three tick box options which are roughly in order of how often they are used (common first)
The transferee is paying a sum of money for the property – the figure is inserted
The transferee is giving no monetary consideration or anything that has a monetary value – for example, a gift, or from existing trustees to new trustees
Other receipts – less frequently used. Examples might be where parties swap properties (this used to have stamp duty saving advantages) or where the property is being transferred to pay off a debt.

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16
Q

what is panel 9 on the TR1 used for

A

There are tick boxes for full title guarantee and limited title guarantee.

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17
Q

what is panel 10 on the TR1 used for

A

declaration of trust: If both legal and beneficial title are being transferred to a sole transferee, then you can skip this panel.
There are tick boxes for the transferees to hold as beneficial joint tenants or tenants in common.
The third option covers all other possibilities, which may be tenants in common in unequal shares, or may be to hold the property on trust for a third party.

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18
Q

what is panel 11 on the TR1 used for

A

additional provisions: Anything that is not relevant to panels 1 to 10 but needs to be included in the transfer deed is included in this panel.

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19
Q

what is pnael 12 on the TR1 used for

A

Provides space for the attestation clauses that allow the parties to execute the TR1 as a deed.

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20
Q

who must always execute the TR1

A

Transferor

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21
Q

when must the transferee execute the TR1

A
  • there is more than one person buying the property (ie they will hold as beneficial joint tenants or tenants in common) or the transferee will hold the property on trust for someone else (as should be set out in Panel 10); or
  • they are providing an indemnity covenant, or any other obligation in Panel 11
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22
Q

how does an indiviual sign the transfer deed

A

in the presence of an independent witness who also signs and prints their full name and address (s1(3)(a)(i), Law of Property (Miscellaneous Provisions) Act 1989)

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23
Q

when is the transfer considered delivered

A

when it is dated, usually by the transferor’s solicitor.

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24
Q

how does a company execute the transfer deed

A

Options include:
- Company seal attached in accordance with the company’s articles of association, eg, a signature by one or two authorised signatories
- No company seal, but signed by two directors or one director and the company secretary
- Signed by one company director and witnessed by an independent witness
- Signed by a senior employee (not a director or the company secretary) who is authorised under a power of attorne

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25
what happens when the transfer deed has been agreed
the solicitor sends the engrossment transfer deed to the seller for execution
26
what is the purpose for pre-completion searches
mainly to check and protect the buyer’s (and lender’s if appropriate) ability to obtain title to the property as per the contract.
27
what are pre completion searches concerned with
the property the parties
28
what search did the buyers solicitor carry out
search with priority - OS1 or OS2
29
What is the priority period
30 working days
30
what searches does the buyer carry out in unregistered land
land charges search Form K15
31
What is the priority period in unregistered land
15 working days
32
what searches need to be carried out when acting for the buyer and lender
form K16 - Solvency search
33
what are the requistions on title
Requisitions on title are similar to pre-exchange enquiries, and again, they are much simpler and just cover the information necessary for completion.
34
what are requisitions on title usually in the form of
TA13
35
what are the contents of TA13
Vacant possession: Asks about arrangements for collecting the keys; for example, whether they are left with the agents.If there is a rent-paying tenant, then asks for an authority for the tenant to pay the rent to the buyer following completion. Deeds and documents: For unregistered property, asks for a list of deeds and documents to be sent on completion Completion: Asks for confirmation that completion will take place according to the Law Society’s Code for Completion by Post. Similar to Law Society Formula B for exchange, the Code for Completion by Post sets out expectations and undertakings of the solicitors on completion. Money: Asks for the seller’s solicitor’s client account details (to send the money), and for the exact amount payable on completion. Mortgages and charges: Asks the seller’s solicitor to list any mortgages secured on the property and confirm their undertaking to redeem them on completion.
36
When a loan is redeemed what happens
the lender should either discharge the charge at the Land Registry electronically (most common) or provide a form DS1 which can be produced to the Land Registry to discharge the charge.
37
how does completion usually happen
Completion now almost always happens by post, which is facilitated by the Law Society Code for Completion by Post
38
when does most residential transactions occur
on Friday
39
what does the law society code for completion by post do
avoids the need for the solicitors to physically attend each other’s office by treating the seller’s solicitor as an agent for the buyer’s solicitor.
40
what happens after completion - what documents do each solicitors hold
the seller’s solicitor holds the transfer deed and other deeds and documents to the buyer’s solicitor’s order. This means that the buyer’s solicitor can direct what happens to them.
41
what should the seller's solicitor do on the day of completion
As soon as possible, and no later than the end of the working day after completion, the seller’s solicitor undertakes to send the transfer deed and other deeds and documents to the buyer’s solicitor.
42
what is a seller's failure to complete
A seller’s failure to complete means that the seller’s solicitor is unable to date an executed transfer. For example: - the seller has not returned the executed transfer - the seller has returned the executed transfer but instructs the solicitor not to date it
43
what is a buyer's failure to complete
A buyer’s failure to complete means that the seller’s solicitor has: - not received the money needed to complete from the buyer’s solicitor or - has received the money, but the buyer instructs the buyer’s solicitor not to release it to the seller’s solicitor (for example, if the buyer changes their mind at the last moment)
44
failure to complete and SCS
- If either party fails to complete by the time and date specified in the contract, then they are obliged to pay contractual compensation for each day’s delay under SCS. - This is calculated at the interest rate specified in the contract. If none is specified, then SCS 1.1.1(e) provides that the Law Society interest rate (the current rate is published on their website) applies. - If the buyer is late in completing, the buyer pays interest on the purchase price less any deposit paid. (This also applies under SCPC.) - If the seller is late in completing, the seller pays interest on the full purchase price. (This only applies under SCS, not SCPC.)
45
what is recession
is a remedy where the contract is set aside and the parties are put back in the position in which they were before the contract was made. this is not automatically available to the non-defualting party
46
what does servicing notice to complete mean
If completion has not taken place by the date and time stated in the contract (2pm under the standard conditions if not amended), then either party if they are ready, able and willing to complete, may give the other notice to complete
47
what does the effect of notice to completion mean
- The parties must complete within ten working days, the first day being the day after the notice to complete has been served. - The party serving the notice to complete is bound by the notice as well, so they must make sure that they will continue to be ready to complete within the ten working day period. - Once served, the notice to complete cannot be withdrawn unless both parties agree. - If either party fails to complete within the ten working day period, the remedies available depend on whether the non-defaulting party is the seller or the buyer.
48
what are the seller's remedies
The seller may rescind the contract, and on doing so, may also: - forfeit the deposit and any interest accrued on it - resell the property and any contents included in it - claim common law damages
49
what are the buyer's remedies
The buyer may rescind the contract, and on doing so, may also: - demand return of the deposit with any interest accrued on it - claim common law damages or even specific performance (an equitable remedy forcing the seller to complete the sale)
50
how long should SDLT be paid in
14 days of completion
51
how long should LTT be paid in
30 days of completion
52
registrations of charge at companies house
It is very important to register a charge given by a company at Companies House within 21 days of the creation of the charge. If this is not done, then the charge is void against any liquidator or administrator, and the lender is not protected. * This deadline is strict, and Companies House have no discretion to extend the deadline.
53
what is the last step in post completion
land registry application
54
if the title is registered - what form is used
then Land Registry form AP1 is used to set out the details of the application and the documents provided.
55
what is the application on the land registry for unregistered land
a form FR1 is used, which contains additional boxes relevant to unregistered title. Unlike the AP1, the FR1 does not have a box where the enclosures are listed. Instead they are listed on a separate form DL.
56
what is overriding interests
For both registered and unregistered land, the buyer’s conveyancer should either tick the AP1 or FR1 to state that there are no overriding interests, or if there are, complete a Form DI.
57
57
how long should a land registry application be logged in
30 working days for priority under OS1 search
58
assessment tip on VAT
Where VAT is payable on the purchase price, the SDLT calculation is based on the purchase price including VAT.
59
When does CGT arise
* there is a chargeable disposal * of a chargeable asset * by a chargeable person * which gives rise to a chargeable gain
60
what are two examples of chargeable disposals
sale of an asset lifetime gift of an asset
61
what is a chargeable asset
Chargeable assets include certain valuable personal possessions (but not cars) and certain non-physical assets, such as shares.
62
who doesnt pay CGT
companies do not pay CGT charities are usually exempt from CGT
63
what is a private residence relief
Private Residence Relief applies so that a person does not pay Capital Gains Tax if they sell or dispose of their home, provided the following conditions are met: * it has been the person’s main home for all the time that they lived in it * they have not let it out (other than taking a lodger) * it has not been used for business purposes (using a room as a temporary office is ok) * the grounds including all buildings are less than 5,000 square metres * it was not bought just to make a gain
SQE PROPERTY PRACTICE
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