Stage 8: Pre-Completion

Question 1

deere: preparation of transfer deed

who prepares this and when is it sent?

Answer 1

• Typically prepared by the buyer’s solicitor and sent straight after exchange (if it is a straightforward conveyance seller may send with pre-exchange pack)

Question 2

how must a transfer of land take place?

Answer 2

• Transfer of legal estate must be done by valid deed, i.e.: clear on the face of it it is a deed, signed and delivered (seal no longer compulsory)

Question 3

re: preparation of transfer deed

how is the transfer deed executed by an individual?

Answer 3

must be in the presence of an independent witness

Question 4

re: preparation of transfer deed

how is the transfer deed executed by a company?

Answer 4

always in the name of the company:
1. Company seal in accordance with articles  “executed as a deed by affixing the common seal of [company name] in the presence of […]”
2. A D and CS or 2 Ds  “executed as a deed by [name of company] acting by [D & CS / 2 Ds]
3. 1 D in the presence of a witness who attests the signature  “executed as a deed by [name of company] acting by a D in the presence of […]

Question 5

re: preparation of transfer deed

who always executes the deed?

Answer 5

The seller will always execute the deed (as they need to transfer the land)

Question 6

re: preparation of transfer deed

when does the buyer execute the deed?

Answer 6

the buyer will only execute the deed if they are entering into an obligation or making a declaration in TR1 (i.e. giving an IC or declaring a BI)

Question 7

who prepares the mortgage deed?

Answer 7

If also acting for the lender, the buyer’s solicitor will also prepare the mortgage deed

Question 8

re: preparation of transfer deed

what rebuttable presumption applies?

Answer 8

documents that are a deed on the face of it have been delivered on execution (i.e. if the solicitor does not want the transfer to take place immediately on signing, they must say so in the cover letter)

Question 9

re: preparation of transfer deed

what transfer deed is used with reg. land?

Answer 9

TR1 deed form to transfer whole title & TP1 for part transfers

Question 10

re: preparation of transfer deed

what transfer deed is used with unreg. land?

Answer 10

compulsory 1st registration, but could use a conveyance

Question 11

re: preparation of transfer deed

what must the deed reflect?

Answer 11

Deed must reflect terms of contract & title deeds.

Question 12

what are the key points from TR1?

Answer 12

o Pt 1 & 2  ensure names, addresses, info from official copy is all correct;
o Pt 3  TR1 dated on completion day
o Pt 7  ‘transferor transfers property to transferee’ do not amend
o Pt 10  ‘declaration of trust’ completed if there are co-owners
o Pt 11  ‘additional provisions’ i.e. ICs

Question 13

when should pre-completion searches be undertaken?

Answer 13

as close to completion as possible

Question 14

what pre-completion searches should be undertaken?

Answer 14

• Search of Title
• Checking the Buyer’s Solvency

Question 15

re: search of title (reg land)

what information do the forms require?

Answer 15

• OS1/OS2 requires: title number, address, name of registered proprietors and applications, reason for search

Question 16

re: search of title (reg land)

how is this done?

Answer 16

• Title number searched with LR on Form OS1 (whole) or OS2 (part sale. Plan to be inc. with OS2 unless there is already an LR-approved plan)
• Search from ‘search from’ date (i.e. date official copy was produced)

a fee is payable

Question 17

re: search of title (reg land)

how are the results recorded?

Answer 17

Form OSR1/OSR2

Question 18

re: search of title (reg land)

what do the results show/do?

Answer 18

• Search shows any new entries since the ‘search from’ date and gives the applicant a ‘priority period’ of 30 working days from the search date.

Question 19

re: search of title (reg land)

explain the search is there is a lender involved

Answer 19

• If the purchase is funded by the lender, OS1/OS2 should be in the name of the lender & tick ‘take a registered charge’ box. This is because the charge is registered after the buyer is registered as the owner. Therefore, if the OS1 is in the buyer’s name only, it would not protect the lender. The OS1 in the lender’s name protects the buyer and lender.

Question 20

what is the effect of a priority period?

Answer 20

o They will not be bound by any entries lodged in the priority period so long as they register the transfer by noon on the last day of the priority period

Question 21

re: search of title (unreg land)

how is this done?

Answer 21

Land charges search on Form K15 against current owners only

There is a fee for this

o NB: bankruptcy check of buyer also done on this form at the same time

Question 22

re: search of title (unreg land)

how are results returned?

Answer 22

results on Form K18

Question 23

re: search of title (unreg land)

what is the effect of this search?

Answer 23

• Confers a 15 working day priority period

Question 24

re: search of title (unreg land)

when is this search not needed?

Answer 24

• This search is completed as part of the pre-exchange enquiries. If completion happens within 15 working days of the 1st search, this need not be repeated

Question 25

re: buyer's solvency how is an individual checked?

Answer 25

o Reg land.  ‘Bankruptcy only’ land charge search on Form K16 o Unreg. land  Form K15 (added to title search)

Question 26

re: buyer's / seller's solvency how is a company checked?

Answer 26

company search

Question 27

what does a company search reveal?

Answer 27

This will reveal whether the company is still in existence; it is solvent and any fixed or floating charges

Question 28

what does a company search not do?

Answer 28

o No priority period so the search must be as close to completion as possible

Question 29

what should be done if there are concerns as to the company's solvency?

Answer 29

o If the transaction is of high value or there are concerns as to solvency, a telephone search at the Registry of Winding Up Petitions at the Companies Court should be done on the day of completion

Question 30

re: seller's solvency how is an individual checked?

Answer 30

o Reg. land  searches considered unnecessary because if there is nothing on the title regarding bankruptcy and the buyer is acting in good faith without notice, they will take good title from the bankrupt seller (even though title is vested in the trustee in bankruptcy) o Unreg. land  will be uncovered as part of land charges searches

Question 31

who completes the completion information form?

Answer 31

* Buyer’s solicitor completes this form and send it to the seller’s solicitor.

Question 32

re: completion information form what information is included on this?

Answer 32

* Most common form is TA13 which includes: arrangements for key handover; place and method of completion; documents to be handed over; amount payable on completion; provision for discharge of mortgage,

Question 33

re: completion information form what is relevant to 'provision of discharge of mortgage'?

Answer 33

Buyer’s solicitor requests an undertaking from the seller’s solicitor to pay the mortgage out of the completion money and send evidence once received  If seller’s solicitor replies ‘yes’, this is an undertaking.  Undertaking is very important. It should be agreed before completion. Seller’s solicitor might ask the buyer to send the money to redeem the mortgage direct to the lender, and the rest to the solicitor

Question 34

what must the solicitor do in terms of finances?

Answer 34

* Solicitor must send a Financial Statement to the buyer setting out the funds they must send to the solicitor to complete i.e.: balance of PP, SDLT / LTT, registration fee, solicitor & disbursement fees, other amounts i.e. insurance * The buyer’s solicitor will also need to obtain the mortgage advance.

Question 35

what is included in the financial statement?

Answer 35

the funds they must send to the solicitor to complete i.e.: balance of PP, SDLT / LTT, registration fee, solicitor & disbursement fees, other amounts i.e. insurance

Question 36

what will the lender want before giving a mortgage advance?

Answer 36

Before giving the advance, the lender will want: o COT, solvency search against the borrowers, OS1R in the name of the lender, executed mortgage deed