Summary of the ULaw property practice textbook. Covers every detail required to memorise from the textbook for SQE assessment. Saves you time from reading the whole textbook which includes information that is not targeting the exam.
Chapter 1: Key Elements and Structure of Freehold Property Transaction
Conveyancing = process of transferring the ownership of a property
Key elements and
structure of 2 important stage in conveyancing
freehold property 1. Exchange of contract
transactions a. Not compulsory
b. Parties start being bound by the contract
c. not always necessary to have a gap in
time between exchange and completion
2. Completion
a. purchase money is paid to the seller
b. transfer deed is completed to transfer the
property to the buyer
Principle of ‘caveat emptor’
➔ seller is not obliged to disclose information about the property, other than about
limited matters of title + would not be liable for any defects in the property
which later come to light
➔ BUT does not entitle the seller to give misleading answers to the buyer’s
enquiries
Pre-contract stage
1) Take instructions
2) Seller’s solicitor submits pre-contract package of documents to buyer’s solicitor
3) Buyer’s solicitor obligation
a) must check the documents of title before exchange to ensure that
i) seller is entitled to sell the property
ii) there are no encumbrances preventing buyer’s intended use
b) ‘Requisitions’ = provision prohibiting the buyer from raising further
queries on the title after exchange
c) carry out additional searches and enquiries
i) seller is not obliged to answer such enquiries
ii) incorrect replies on the part of the seller could lead to the
buyer having an action for misrepresentation
d) carry out pre-contract searches
4) Result → exchange of contract
a) On the exchange of contracts, the buyer will usually pay a deposit
b) deposit is usually held by the seller’s solicitor until completion
, The pre-completion stage
● Aim = to make sure that all the correct documentation and the completion
money will be available on the completion date
● transfer deed will need to be prepared and executed in readiness for
completion
● buyer’s solicitor will carry out pre-completion searches
● On completion, the buyer will pay the balance of the purchase money and the
seller will hand over the keys to the property.
The post-completion stage
● seller’s solicitor
○ must ensure that any mortgage the seller had is paid off and removed
from the title
○ usually have given an undertaking to do this
● buyer’s solicitor
○ must ensure that Stamp Duty Land Tax is paid on the transfer
○ must register their client as the new owner of the property
○ register any new mortgage over the land
The Law Society ● Applies to residential conveyancing only
Conveyancing ● The protocol is a set of instructions to conveyancers as to how to carry out a
Protocol residential sale and purchase + accompanied by a series of standard
documents issued under the ‘TransAction’ brand
● All firms that undertake residential conveyancing and want to be members of
The Law Society’s Conveyancing Quality Scheme (‘CQS’) are required to
comply with
○ the Protocol
○ Client Service Charter
○ mandatory training and enforcement procedures
● The procedures set out in the Protocol reflect what standard practice is in
residential conveyancing and in this manual (for residential context).
Professional Solicitor cannot act for both parties if there is a conflict of interest or a significant risk of
Conduct Issue in such a conflict – paragraph 6.2 in The Code of Conduct
property ● Exception 1 = Paragraph 6.2(a) → allows a solicitor to act for more than one
transaction party, even if there is a conflict of interest
○ 2 requirements
■ if the parties have a ‘substantially common interest’ in
, relation to the matter
■ certain conditions are met
● both clients have given their informed written
consent
● effective safeguards have been put in place to
protect any client confidential information
● solicitor is satisfied that it is reasonable for them to
act for both clients
○ This does not apply to a property purchase
● Exception 2 = Paragraph 6.2(b) → allows a solicitor to act even if there is a
conflict of interest where the clients are competing for the same objective
○ The conditions for so acting are as for paragraph 6.2(a) above
○ this exception will not apply in a buyer and seller situation
○ Likely to apply to joint buyers
Acting for both parties
1. Acting for seller and buyer
a. exception does not apply
b. Solicitor CANNOT act for both seller and buyer
2. Acting for joint buyers
a. Solicitor CAN act for joint buyer
b. But necessary to advise residential buyers separately about how they
want to hold the equitable interest in the property
i. particularly if they are not married or in a civil partnership
3. Acting for borrower and lender
a. The risk of conflict is high when
i. the mortgage is not a standard mortgage
ii. OR the mortgage is a standard mortgage but you do not use
the approved certificate of title
b. residential transaction → usually CAN act for both
i. exception in paragraph 6.2(a) may apply if 2 requirements
are met
ii. More likely to apply if mortgage is standard and approved
certificate of title is used
c. Large commercial property transaction
i. mortgage documents are likely to be subject to negotiation
→ will not be on standard terms
ii. Potential substantial common interest
1. in wanting the borrower to obtain good title to the
property
2. AND in ensuring that there are no problems
adversely affecting the property’s value
4. Acting for joint borrowers
a. usually acceptable to act for joint borrowers if 2 requirement is met
, i. Etridge guidelines is followed
ii. Comply with para 6.2
b. This principle applies to civil partners / cohabitees / parent and child
c. Problem might arise when matrimonial home that owned by a married
couple jointly is mortgaged it as security for a business loan
i. spouse may seek to have the mortgage set aside on the
basis of undue influence
d. Solution = ‘the Etridge guidelines’
i. Lender should, with husband consent, provide solicitor
1. Purpose of the lona
2. Current amount of husband’s indebtedness
3. Amount of current overdraft facility
4. Amount and term of new loan
5. Copy of written application from husband for new
loan
ii. Solicitor should
1. explain to the wife that lender will rely on the
solicitor involvement to counter any suggestion of
undue influence
2. Obtain confirmation from the wife
3. Discuss with the wife in face to face meeting +
absence of husband + non-technical language
4. Explain to the wife nature of doc / consequence of
signing them / warning of the risks
5. Clearly explain that she has a choice
6. Check if the wife wishes to proceed (confirmation
should be in writing)
7. If solicitor thinks that the transaction is NOT in the
wife’s best interest → should give reasoned advice
8. If it is very obvious that the wife is ‘greivously
wronged’ → should declined to act
Contract race
● seller’s solicitor’s obligation to buyer even when he is not acting for buyer
● Contract race = pre-contract package is sent to multiple buyers who then
compete to be ready to exchange contracts first
○ If all the prospective buyers know that they are engaged in a race →
legitimate selling technique
○ If seller instructs their solicitor that they do not want the prospective
buyers to know → breach of para 1.4 (duty not to mislead)
■ Where a solicitor acts for a seller of land, they must not
mislead or attempt to mislead the buyers
■ should inform all buyers immediately of the seller’s intention
to deal with more than one buyer
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