Summary
Summary of Property Practice for SQE1
- Course
- Institution
Property Practice notes for SQE1 - I used the textbook from the University of Law for reference for my July 2022 exam
[Show more]
Seller
Follow
bethanygray99
Reviews received
Content preview
PropertyProperty – Unit 1. Due Diligence 1
Key elements
- Exchange of contracts: not compulsory (useful as it fixes completion date and gives time for final
preparations)
- Completion: stage when the bulk of the purchase money is paid to the seller and transfer deed is completed
- Stages
1. Pre-contract stage: investigation of title, additional searches
2. Exchange of contracts
3. Pre-completion stage: now bound to complete
4. Completion
5. Post-completion stage: finalise administrative matters
Professional conduct
- Cannot act for a seller and buyer subject to certain exceptions (CoC para 6.2)
o ‘substantially common interest’ – does not apply to a property purchase
o ‘competing for the same objective’ – eg. 2 buyers competing against each other to buy a property
- Usually acceptable to act for joint buyers
- Acting for a borrower and lender unless there is a risk of a conflict if:
o The mortgage is not a standard one
o The mortgage is a standard one but you do not use the approved certificate
- Acting for joint borrowers of a matrimonial home (section 1.3.4 textbook for more info)
o Etridge guidelines: The lender should, with the spouses consent, provide the solicitor with certain
information
o Cost disadvantage of being advised by a separate solicitor outweighed the benefit
Mortgage
- Solicitor carrying out a regulated activity in relation to a regulated mortgage contract must be authorised to
do so under FSMA 2000
o [look back on regulated activities]
- Types of mortgage
o Repayment mortgages
Monthly payments made up of instalments and interest
Adv: by the end of the mortgage term, borrower will have paid off everything they owe
o Interest-only mortgage
Monthly payment made up only of interest chargeable on the loan
Adv: monthly repayments likely lower than repayment mortgage
Dis: by the end of the mortgage term, borrower will still owe the lender the whole original
amount borrowed, so must find an alternative way to pay off the loan (eg. savings,
investment product) if they want to be free of the mortgage
Property taxation
- Residential property
o SDLT/LTT on purchase of property
o CGT
- Commercial property
o SDLT/LTT:
o May have to pay VAT
o Likely to be owned by a company –Corporation Tax
,Property
SDLT
Residential freehold property
Purchase price SDLT Rate Purchase price LTT Rate
Up to £125,000 0% -£250,000 0%
-£250,000 2% -£400,000 5%
-£925,000 10% -£750,000 7.5%
The remainder 12% -£1.5m 10%
The remainder 12.5%
- Before March 21: Less than £500,000 =
no SDLT
- 1st time buyers (up to £500,000)
o Up to £300,000 = no SDLT
o Portion until £500,000 = 5%
Non-residential (or mixed-use) freehold property
Purchase price SDLT Rate Purchase price LTT Rate
Up to £150,000 0% -£150,000 0%
-£250,000 2% -£250,000 1%
The remainder 5% -£1m 5%
The remainder 6%
st
- No relief for 1 time buyers
CGT
- Principal private residence relief (PPRR)
o If it is the sale of an individual’s dwelling house used as their only main residence you can claim PPRR
o If an individual has more than one residence,
They choose which one qualifies for PPRR
o Certain periods of absence allowed eg. living abroad for work
o Not available if garden of more than 0.5 hectares
Unless can show the extra garden was necessary for the reasonable enjoyment of the house
, Property
VAT
- Different rates
o Standard – 20%
o Exempt – non-VATable (supplier of a land sometimes has ‘the option to tax’)
o Zero-rated – still taxable supplies, but charged at a zero rate
- Most real estate transactions are exempt
- Not usually paid on residential transactions
- Commercial properties
o Only compulsory on ‘new’ (3 years)
o Not always charged on ‘old’
o [option to tax the supply of ‘old’ commercial properties]
- Option to tax
o Only if he has paid VAT he wants to recover
o Buyer usually able to recover the VAT paid if option exercised
o If the buyer makes only exempt supplies (eg. insurance, financial supplies) may be unable to fully
recover VAT it has to pay
o Therefore, a buyer that makes exempt supplies will resist the seller’s option to tax, or seek a
compensatory reduction in the purchase price
Core principles of planning law
Development
- The carrying out of building, engineering, mining, other operations
- Making any material change in the use of any buildings/other land
- Not ‘development’
o Change of use within the same class:
B – general industrial & storage & distribution
C – residential uses
E – commercial, business & service
Retail sale of goods (not hot food)
Sale of food & drink for consumption on the premises
Financial & professional services
Uses which can be carried out in a residential area without detriment to its amenity
F – learning & non-residential institutions & local community
Sui generis – class of its own
Entertainment, drinking, hot food takeaways
These always require express planning permission
Matters not requiring express planning permission
- Can be automatically granted under GDPO – ‘permitted development’
o Developments within curtilage of a dwelling house
Eg. extensions below a certain size, minor operations
o Specified changes between classes
- Issuing an Art 4 direction excludes the effect of the GPDO
o Enquiries of the LPA will show this
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller bethanygray99. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.68. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
50843 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now