Summary
Summary: Real Estate Law
- Module
- Real estate
- Institution
- University Of Law (ULaw)
A document setting out everything you need to know for Real Estate on the LPC.
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Cai Cherry 2021Real Estate revision
Outcome Page
Client instructions 2
Professional conduct issues 3
Investigation of title 5
Requisitions on title 10
Certificate of Title 10
Pre-contract searches and enquiries 11
Contractual terms and special conditions 12
VAT 13
Steps before exchange of contract 14
Report on title 14
Exchange of contracts 14
Steps before completion 15
Breach of contract before completion 18
Delayed completion 18
Registration after completion 19
Steps taken for grant of a lease 21
Covenants 23
LTA 1954 – security of tenure 25
Repair and insurance provisions 28
Rights and reservations 30
Change of use 31
Undertakings for landlord’s legal costs 31
Alienation 32
Licences to assign 34
Procedure for assignment 34
Variation of terms 36
Tenant’s default 36
Termination of a lease 39
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,Cai Cherry 2021
Client instructions
Seller’s solicitor must provide the pre-contract package
- Draft contract
- Evidence of seller’s legal identity and title to property
- Results of pre-contract searches
- Local authority planning permissions
Consider:
- Source of funds
- Any planning applications needed?
- Any risks inherent in the property?
- Vacant possession?
- Survey needed?
- Insurance?
- EPC – must be at least E grade1
- Title investigation
Acting for the seller2
- Full names and addresses of seller and buyer, and home and business telephone numbers of
seller
- Name, address and person to contact at estate agents
- Name and address of other party’s solicitors
- Full address of the property to be sold
- Tenure (freehold/leasehold)
- Price
- Any preliminary deposit paid?
- Fixtures and fittings?
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- Enquiries of the seller
- Anticipated completion date
- Present use of the property
- VAT?
- Who is in occupation?
- Synchronisation with other transactions?
- Any terms agreed between the parties?
- Costs of the transaction/legal fees
- Whereabouts of title deeds and documents
- Outstanding mortgages
- Amount of deposit
- Proceeds of sale
- Capital gains tax
Acting for the buyer3
- Intended use of the property
- Sufficient funds for purchase and related costs, including Land Registry fees and SDLT
- Source of funds and risk of mortgage fraud/money laundering 4
- Deposit5
- Surveys6
- Situation of the property, and any specialist searches
- Insurance7
- Who is buying the property? Need for co-ownership?
- Custody of deeds
- Client’s present property
Professional conduct issues
Acting for both buyer and seller8
- Why would a buyer and seller want the same solicitor to act for them both?
o Save time and expense using the same firm
o Different lawyers handling each client may reduce the risk of conflict of interests
- Principle 7 requires lawyers to act in the best interests of each client
- SRA Code 6.2 says that you should act for a client when there is a conflict of interest or a
significant risk of such a conflict. This is defined in the SRA Glossary as ‘a situation where
your separate duties to act in the best interests of two or more clients conflict.’
- The guidance suggests taking into account the complexity of the matter, the likelihood of
negotiations, the bargaining power of the parties and any vulnerabilities.
- Under SRA Code 6.2(a), a solicitor can act for more than one party even if there is a conflict
where the clients have a ‘substantially common interest’ and the conditions set out in 6.2(i)-
(iii) are satisfied. Substantially common interests are where there is a clear common purpose
between the clients and a strong consensus about how it is to be achieved. This is unlikely to
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, Cai Cherry 2021
be the case when representing a buyer and a seller, but may be applicable when
representing the buyer and lender,9 unless there is a need for negotiation (e.g., non-
standard mortgage contracts) which is common in commercial transactions.
- Under SRA Code 6.2(b), a solicitor can act for two parties when they are competing for the
same objective. However, this would not be the case with a buyer-seller relationship, as they
want fundamentally different things from the transactions.
- Also consider confidentiality issues under SRA Code 6.3 and 6.5 10
Mortgage fraud and money laundering 11
- New clients:
o Identity checks/identity due diligence
o Source of funding
o Existing debt obligations
o Signatures in the presence of a verified witness
o Identify other solicitors
o Ensure property value is real
o Court judgments against the clients or the property?
o Purchase directly between buyer and seller – not any intermediaries
o Is the land being bought or sold a lot?
o Does the client’s turnover add up?
o Understand the client’s plans for the property and make sure they are actually
interested in it
o Make sure the credit history and the age of the company add up
o Make sure the seller is the rightful owner of the property
o Beneficial owners of the company?
o Property and mortgage consistent with what you know?
- Form LL can be used to safeguard against a fraudulent disposition of property
Contract races12
- Not expressly prohibited by the SRA Codes (although they were in the 2011 version)
- SRA Code 1.2 – solicitors should not abuse their position by taking unfair advantage of
others
- SRA Code 1.4 – solicitors must not mislead others
- Seller should be asked for their consent for the solicitor to inform prospective buyers that
they are intending to conduct a contract race
o Law Society guidance says that buyers should be informed immediately of a contract
race
- If the seller does not consent for this disclosure, the solicitor has a duty of confidentiality to
their client under Code 6.3, and so they would not be able to inform prospective buyers
o They should therefore decline to act on the basis that to continue would be a breach
of Principle 2 – acting with integrity
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