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- 15 Dec 2020
- 16 ...
EXAMINERS’ REPORT – 15 DEC 2020 SECTION B (FREEHOLD):
This section included questions all focused around the proposed
SECTION A (MCQS): purchase of freehold property.
Question 1: Question 7 – Acting for Buyer and Lender (6 marks):
Topic: Unregistered land, title investigation
Buyer is taking out a loan for the property and the terms of the loan
* Find root of title to the conveyance by looking at the epitome needed to be negotiated. Can the lawyer act for both the lender and
of title borrower (= buyer)?
* Recognise when conveyance is correctly stamped
* Know the date of compulsory first registration P(7) Lawyers must act in the best interests of each client. – here meaning
* Know the correct form of execution for individuals prior to 31 both buyer and lender.
July 1990
CCS 6.2 Lawyers must not act if there is a conflict of interests (or a
Question 2: significant risk of conflict) between clients. – here there would be, as the
Topic: Unregistered land, Central Land Charges search lender will want the highest interest rates they can achieve while the
buyer will want the lowest interest rates.
* Read the epitome of title and find the correct names and
correct periods to cover for a Central Land Charges search Exceptions:
* Do this by drawing a table with the names and periods to cover • Substantially common interest exception (SCI):
* Check if the names on the searches already carried out are You can act for both clients if they have a substantially common
correct interest. – in having to negotiate the loan documentation, there
* Understand how the “protection end date” affect the CLC was no strong consensus so no SCI.
search results – in some cases, the results cannot be relied on. • Same objective (CSO):
You can act for both clients if they are competing for the same
Question 3: objective. – this one only applies if there is one asset that both
Topic: Unregistered land, Central Land Charges search clients are trying to acquire.
* Read search results including a D(ii) and C(i) entry Conclude:
* Check the buyer had to give an indemnity covenant to the seller. You cannot act for both lender and buyer.
* Buyer has to give an indemnity covenant if: Question 8 – Title investigation and property searches (22 marks):
• the current seller had given an indemnity covenant
when they purchased the land (check the Epitome) Memo summary:
OR Client is an existing client.
• the current seller is the person who entered into the •
Client wants to buy property (currently office space) and turn
covenant originally (check the Epitome) •
into a gallery.
* Know that only a positive covenant triggers an indemnity • None of the works would be for sale.
covenant to be given. • The area is a Conservation Area with mining activities taking
* Select which of the covenants in the epitome was the one that place in the past.
triggered the indemnity covenant.
Official copies:
Question 4: • Proprietorship Register: includes a lender’s restriction
Topic: Unregistered land, post-completion steps • Charges Register: includes a restrictive covenant from 1937,
not to use the property for anything other than recreation hall
* Know which post-completion steps are necessary to register for miners (and their families).
the transfer of unregistered land.
* Be able to calculate SDLT correctly (bands and percentages are Official copy plan:
provided) • A river ran through the property, at the back.
* Realise that the buyer is buying without a mortgage so no need • There was a church on the opposite side of the property.
to register a charge at Companies House (buyer was a company)
* Know which documents need to be sent to Land Registry to
register the transfer. CPSE replies:
• Seller has been in breach of the restrictive covenant since 1983
Question 5: but there was no complaint made about this.
Topic: Leasehold, covenants • Seller had no restrictive covenant insurance.
* Recognise a qualified covenants against assignment and an Issues:
alienation clause in a new commercial lease. • Past breach of restrictive covenant: use of property as offices
* Apply the facts and see if the landlord could refuse to give • Planned future breach of the same covenant: use of property
consent to the assignment. as gallery
* Recognise who would enter into an AGA once the assignment is • Lender restriction
completed (it was the landlord and assignor in this case). • Local Authority consent needed
* The alienation clause was drafted as qualified and was
upgraded by s.19(1)(a) LTA 1927. Planned future breach of restrictive covenant:
* International Drilling If the landlord cannot rely on any of the * The restrictive covenant prevents anyone from using the
circumstances set out in the lease, landlord must act property for anything other than as a recreation hall for miners
reasonably. and their families.
* Seller had breached the covenant but no one has complained.
Question 6: * Seller had no restrictive covenant insurance.
Topic: Leasehold, remedy of forfeiture * Buyer’s plan to use the property as a gallery was going to
breach the covenant.
* Recognise that if a tenant breached a covenant in the lease not
to share occupation with another person, then the landlord Options: * List pros & cons *
was entitled to the remedy of forfeiture. (buyer pays for these as it is their choice to breach the covenant)
* s.146(1) LPA 1925 A right of “re-entry” is a right of forfeiture – 1. Best option:
the section states that the right of “re-entry” relates to “a right Restrictive Covenant Insurance (no need for special
of re-entry or forfeiture …”. condition in the contract as this is not something to
* Landlord must serve a s.146(1) LPA 1925 notice on the tenant agree with the seller) Cons: Future breaches are not
for this breach. insurable/very expensive. – As this is a future breach, so
* Landlord do not have to wait for 14 days before serving this insurance will be too expensive. The covenant is from
notice. 1937 so it is an older covenant. Which would make
getting an insurance easier.
2. Second best option:
Release from PWB
3. Last option:
Upper Tribunal (Lands Chamber) – The area stopped
PLP – Examiners’ Reports | Page 1 of 9
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