Class notes PLP M1 - LPC Notes
PLP WS1
Two main systems of conveyancing registered and unregistered. The main differentiating point between them is the way in which the seller proves the ownership of the property.
Under the unregistered system the seller proving possession of the land for a...
Two main systems of conveyancing registered and unregistered. The main differentiating point
between them is the way in which the seller proves the ownership of the property.
Under the unregistered system the seller proving possession of the land for a long time. [nb
adverse possession 12 yr plus]. This is shown my document deeds that can show undisputed
ownership for a period of at least 15 years.
For the Registered system they simply check the land registry.
1990 mad it compulsory to register all freehold land and then on 1 st April 1998, changes of
ownership and gifts become compulsory register able. He aim is to have all land registered by
2012. National land information service available online.
Who they cannot act for (if both parties)
Transactions not at arm’s length
Under r 3.08, a solicitor may act for seller and buyer if the transaction is not at arm’s length,
provided that there is no conflict or significant risk of conflict. Whether a transaction is at arm’s
length will depend on the circumstances of the case and, in particular, the relationship between the
parties. A transaction will not usually be at arm’s length if the parties are:
(a)related by blood, adoption or marriage, or living together;
(b)the settlor of a trust and the trustees;
(c)the trustees of a trust and its beneficiary or the beneficiary’s relative;
(d)personal representatives and a beneficiary;
(e) the trustees of separate trusts for the same family;
(f) a sole trader or partners and a limited company set up to enable the business to be incorporated;
(g)associated companies (ie, where one is a holding company and the other is its subsidiary within
the meaning of the Companies Act 1985, or both are subsidiaries of the same holding company); or
(h)a local authority and a company of which the local authority is a shareholder or guarantor, or to
which it has the power to appoint officers. However, even though the rule does not apply in these
situations, the general rules of conduct must still be followed. Thus, it would not be possible to act
if there was a conflict of interest, or a significant risk of a conflict arising.
Exceptions
A solicitor may act for seller and buyer only in one of the following circumstances:
(a)both parties are established clients; or
(b)the consideration is £10,000 or less and the transaction is not the grant of a lease; or
(c)seller and buyer are represented by two separate offices in different localities,
and:
(i) different solicitors who normally work at each office conduct or supervise the transaction, and
(ii)no office of the practice (or an associated practice) referred either client to the office acting
for
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PLP M1 - LPC Notes
that client; or
(d) the only way in which the solicitor is acting for the buyer is in providing mortgage-related
services; or
(e) the only way in which the solicitor is acting for the seller is in providing property selling
services through a SEAL
However, even if one of the above circumstances exists, a solicitor still cannot act for buyer and
seller:
(a)without the written consent of both parties; or
(b)if a conflict of interest exists or arises; or
(c)the seller is selling or leasing as a builder or developer.
Outline of a simple transaction
Has three main stages;
a) pre-contract stage [about 4-6 weeks]
b) post-contract / pre completion stage [about 2 weeks]
c) post-completion stage.
Gazumping: just before exchange seller says up the price, Gazundering; Buyer says lower the price.
The housing act 2004 (Assented nov 2004) introduces HIP’s (home information packs). This was
criticised due to the fact a Home condition report on the structure of the house. This amounted to
about £500. Though The HIP without the HCR as detailed in The Home information Pack Regulation
2007 (SI 2007/992). Costs only £300.
Required HIP documents
The HIP must include the following:
(a) an index;
(b) an EPC (or a predicted energy assessment if the property is not physically complete). To
emphasise its importance, the EPC must be the first document in the HIP following the index.
Details of the grading of the house must also be included in the estate agent’s particulars describing
the house;
(c) the sale statement setting out the basic terms of the
sale; (d)official copies and title plan or an epitome of title;
(e) in the case of leasehold land
— (i)a copy of the lease;
(ii) any regulations or rules made for the purposes of managing the property;
(iii) statements or summaries of service charges relating to the 36 months preceding the first point
of marketing;
(iv) the most recent requests for payment with regard to services, insurance and ground rent made
in respect of the property, relating to the 12 months preceding the first point of marketing;
(v) the names and addresses of the current or proposed landlord and managing agents;
(vi)any proposed amendments to the lease or regulations;
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PLP M1 - LPC Notes
(vii)a summary of such works as are being undertaken or proposed, affecting the property or the
building in which the property is situated;
(f) In the case of Commonhold land, specified information and documents about the scheme (eg
the Commonhold Community Statement). See 34.7 as to Commonhold;
(g) a local search;
(h) enquiries of the local authority; and
(i)a drainage and water enquiries
report.
Authorised HIP documents
The HIP may include any of the following:
(a) a Home Condition Report (HCR);
(b) an accurate translation in any language of any HIP document (under reg8(3), HIP documents
must be in English or, where the property is in Wales, English, Welsh or a combination of both);
(c) an additional version of any HIP document in another format, such as Braille or large print;
(d)any warranty, policy or guarantee covering defects in the design, building, or completion of
the property, or its conversion for residential purposes (eg an NHBC policy – see 41.2.3).
(e) a summary or explanation of any HIP document;
(f) information identifying the property including a description, photograph, map, plan or drawing
of the property;
(g) information about a HIP document or about the HIP, relating to its source or supply, or
any complaints or redress procedures arising from it;
(h) official copies of any documents referred to in the register of title;
(i) if the property is leasehold, various other details about the leasehold arrangements which
would be of interest to potential buyers of the property. These include details of any head lease or
management company, details of any breaches of covenant, etc;
(j) documentary evidence of any work carried out to the property since the date of the
HCR; (k)any guarantees relating to work carried out to the property;
(l) various further searches, including commons registration, environmental, chancel repairs
and additional enquiries of the local authority;
(m) any documents referred to in a search report;
(n) further specified information which would be of interest to potential buyers of the property
interest, including the property’s contents, fixtures or fittings, and information about access to
the property, disputes with neighbours, building works carried out on the property and the utility
services connected to the property.
Time-sensitive documents contained in a HIP (eg searches and official copies) must be dated no more
than three months prior to the date of first marketing.
The HIP is required for all houses of vacant possession being sold on the open market from 14 dec
2007. [not intended for private sales].
Pre-Pre-Contract stage
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PLP M1 - LPC Notes
Instructions are taken from the client; normally in writing and includes information about costs.
This is also when your clients identity must be verified to come in accordance with anti-money
maundering laws.
Pre contract Stage
The sellers solicitor:
> Must prepare the pre-contract package. -
- the draft contract showing what land the seller is selling and what cost.
- evidence to the sellers legal title. [Title – must be verified before any formalisation].
- sometimes results of the pre-contract searches. [searches are made to LR etc to see if
any obligations are on the property such as floating-charges etc.]
- verify buyer financial situation [i.e. be able to fund at least the [10% deposit]
The buyers solicitor must
-conduct own searches, [NB caveat emptor – buyer beware.]
- verify title
- approve draft contract.
Once this is complete an exchange of contract occurs and formalises the procedure and creates a
contract.
Post-contract
First step is for the buyer to raise an requisitions (queries) which are raised on a standard form which
is sent to the sellers solicitor for replies.
At the same time the buyers solicitor sends the draft purchase deed to the sellers solicitors. This
takes the form of a transfer as defined by the land registry rules.
Post-completion
The sellers solicitor sends the lender the amount of money required to pay off the mortgage, obtain
a recipe and send this to the buyers S who will need it to prove to LR that the mortgage is
discharged, and prepare and submit the final bill.
The proceeds must be dealt with asap (a day) otherwise may be liable for interest.
The buyers solicitor must pay stamp duty for purchases £125k+ (150k+ for commercial) usually
within 30days to HMRC (her majesty revenue and customs) with particulars of the transaction
(whom what were what cost etc) and so are issued a certificate which will allow them to register at
LR. Without the certificate they can’t reg and late/failure to pay will lead to large fines.
Once registered with LR they will send a charge certificate (or land certificate of no mortgage)
containing details of the buyers ownership of the land, mortgages, easement and any covenants.
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