Summary LPC- FULL Real Estate revision notes part 1 (freehold) DISTINCTION Grade
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Course
LPC - Legal Practice Course
Institution
LPC - Legal Practice Course
This is a complete revision document that covers the first part of the PLP module on the LPC. This document is fully consolidated and ready to be used in an exam. It covers everything you need to know regarding freehold property, from title investigation through to completion.
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Table of Contents
Taking instructions WS1................................................................................................................2
Conduct issues that may arise in commercial property transactions.............................................4
Contract races...............................................................................................................................6
Money laundering.........................................................................................................................7
VAT AFFECTING PURCHASES.........................................................................................................9
Title Investigation- due diligence procedure WS2........................................................................11
Registers:....................................................................................................................................12
Title investigation- IDEA method.................................................................................................14
Overreaching:..............................................................................................................................19
Mortgage.....................................................................................................................................20
Searches & Enquiries- Planning permission.................................................................................21
Reporting to the lender- using certificate of Title........................................................................27
The Contract................................................................................................................................28
Completion..................................................................................................................................33
(applying to register the transfer of ownership and altering register) and existing mortgage to
remove. Also add the new charge of the new mortgage.............................................................36
,Taking instructions WS1
Outcomes
1. Analyse buyer client’s initial instructions, identify and follow up issues
arising at the instructions stage.
2. Identify and resolve issues of professional conduct when instructed on a
new commercial property transaction
Instructions template- PRECEDENT
Caveat Emptor- buyer beware, therefore when taking instructions follow details of
this list
1. Full names, addresses and contact details of the buyer and seller
2. Name, address and person to contact at the estate agents
3. Name and address of other party solicitor
4. Full address of the property to be bought/sold
5. Fixtures and fittings to be bought?
6. Tenure
7. Price- how will it be financed?
8. Does the transaction attract VAT?
9. Deposit
10. Has any preliminary deposit been paid?
11. Get and EPC- energy performance certificate
Obtained from seller as soon as marketing begins
12. Mortgage required? The buyer’s solicitor should ensure that the buyer has
the sufficient funds for the transaction, should be raised when taking
instructions and further checks just before the exchange of contract. K16
bankruptcy search
Be aware of regulated activities under FSMA 2000.
13. Anticipated completion date
14. The present and intended use of the property
15. Is anyone other than the seller in occupation of the property
,16. Synchronisation of a related sale?
17. Any terms other than the price been agreed?
18. Property survey
19. Situation of the property in relation to rivers, open land etc
20. Insurance on the property
21. Issues arising out of the sale of particulars
, Conduct issues that may arise in commercial property
transactions
Acting for joint buyers
Acceptable to act for joint buyer’s subject to there being no existing or likely
conflict of interest.
Note s6.2(b) competing for the same objective does not apply to conveyancing as they
are not competing for the same asset.
It may be necessary to advise the residential buyers about their rights in the
property when they are not married.
SCI under conduct not allowed in commercial setting due to the conflicting
relationship
Acting for borrower and lender
As soon as the buyer’s solicitor receives instructions to act for the lender,
he is effectively acting for both parties in one transaction (ie, for both lender
and borrower).
He has two clients and owes a duty to both (see Mortgage Express v
Bowerman & Partners (A Firm) [1996] 2 All ER 836). Acting for borrower
and lender is possible unless, under para 6.2 of the SRA Codes, the
solicitor or firm has a conflict of interest or a significant risk of a
conflict
Examples of a conflict of interest when acting for both a buyer and a lender
may include where:
a) the terms of the mortgage offer are unfair to the borrower (eg, an
extortionate rate of interest is being charged);
b) instructions reveal that the buyer would be in breach of one of the terms of
the offer (eg, by allowing tenants into possession of the property);
c) the buyer is unable to comply with the lender’s terms (eg, to provide the
balance of the purchase price from his own funds);
d) the mortgage documentation requires negotiation between the parties.
e) Examples (a)–(c) would preclude the firm or solicitor from acting for both
borrower and lender or continuing to act (if instructions had initially been
accepted from both). However, example (d) requires further analysis to
identify when such negotiation is likely to take place.
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