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Summary Real Estate Notes
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LPC Notes for Real Estate Module. Distinction grade notes.
[Meer zien]Voorbeeld 3 van de 28 pagina's
Voorbeeld 3 van de 28 pagina's
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Real EstateChapter 1 Government maintains a register of title to land; land transfers take place by notifying the registry of the
Registered Land change of ownership and the details recorded at the registry are amended accordingly.
The register for each title shows the extent of the land concerned by reference to a plan based on the Ordn
Survey map. This sets out the benefits enjoyed by the land and contains details of the burdens attached to i
When an intended buyer wants to check the title, a quick search of the register at the Land Registry will con
the information he needs.
Unregistered A seller proves his title by establishing that he has been in undisturbed possession of the land for a long tim
Land This is established by the seller producing the deeds by which title has changed hands and other documen
The seller is required to show the buyer the deeds that demonstrate the sellers undisputed ownership of th
land from the present day to a point in time at least 15 years before.
Chapter 2 Transaction starts by the seller putting the property on the market. The seller will usually engage an estate
Conveyancing to assist with this process. The seller will need to have commissioned an EPC.
Transaction
Once a buyer found and a price agreed, the conveyancing process can begin. The parties at this point have n
entered any legally binding contract so any of them can walk away at any point until exchange of the contra
Instructions will be taken once the solicitor is retained by the client. This will involve costs the client will h
pay for the work done, as well as obtaining necessary proof of the clients identity in order to comply with a
money laundering regulations.
Pre-contract stage
This is the longest stage, much of the legal work is done here.
The seller’s solicitor must prepare the pre-contract package for the buyer. This comprises of:
a) The draft contract, showing what land the seller is selling and on what terms he is prepared to sell it.
b) Evidence of the seller’s legal title to the property, to prove that he does own and is entitled to sell the
and
c) The results of the pre-contract searches which the seller has made and other information about the
property.
May also include copies of local authority planning permissions.
Caveat emptor principle applies: it is the buyers responsibility to find out all the information which he need
know about the property before committing himself to the purchase.
The buyer’s solicitor must check that their client is able, in financial terms to proceed with the transaction.
Exchange of contracts
This marks the stage in the transaction at which a binding contract comes into existence.
Until exchange, no contract exists between the buyer and the seller, and either is free to change their mind
about the transaction and withdraw from it.
Post-contract or pre-completion stage
Buyer normally raises ‘requisitions’ with the seller. They will have to clarify any queries which have arisen o
the seller’s proof of ownership.
The buyer will need to know how much money is required to complete the transaction, where completion i
take place and who holds the keys to the property.
At the same time as sending the requisitions, the buyers solicitor sends the draft transfer deed to the selle
solicitor.
At the same time, when a mortgage offer was made to the buyer, the lender would have instructed solicito
act for it in connection with the loan. The lender needs to be certain that the property which it is accepting
security for the loan has a good title so investigations need to be carried out on behalf of the buyer and va
documents need to be drawn up so the mortgage can come into effect.
In some situations, the solicitor who is acting for the buyer will also be instructed to act for the buyer’s lend
Acting for more than one party is restricted by para 6.2 of the SRA codes, but acting for buyer and lender in
residential transaction is usually permitted.
, Preparing for completion
A few days before completion, the buyers solicitor makes their pre-completion searches to ensure that no l
minute problems have occurred with the title to the property.
At the same time, the seller’s solicitor is also taking steps to ensure that completion will proceed smoothly
without delay.
Discharge of the seller’s mortgage – very often the seller will have a mortgage on the property wh
will have agreed contractually with the buyer to remove on completion. The seller’s solicitor must
confirm with the seller’s lender the exact amount of money which is required to discharge the mor
(redemption figure).
Final checks to happen.
Completion
Parties today usually agree to complete through post. This means that in effect, the seller’s solicitor is
temporarily appointed to be the agent for the buyer’s solicitor.
On the morning of completion day, the money which is required to complete the transaction will need to b
transmitted to the seller’s solicitor.
Without tangible evidence that the buyer has paid, the seller will not complete.
Usually, the buyer’s solicitors account is debited with the requisite sum, a corresponding credit being enter
the seller’s solicitors’ account.
Post-completion stage
Sellers’s solicitor has to:
a) Send to the seller’s lender the amount required to pay off the sellers mortgage, obtain a receipt
that money and send this receipt to the buyers solicitor who will need this receipt to prove to Land
Registry that the mortgage has been discharged.
b) Account to their client for the proceeds of sale and prepare and submit their bill of costs. This sh
be dealt with on the day of completion, or ASAP. If the solicitor delays in returning money to the cl
they may have to pay interest on that sum under SRA rules.
c) Seller’s solicitor can close their file when dealt with this matters.
Buyers solicitor has to:
a) Deal with payment of stamp duty land tax. Usually paid within 14 days of completion: failure to p
within this time will attract fines and penalties.
b) Particulars of transaction such as who has sold what to whom and at what price must be delivered
HMRC after completion in the form of a land transaction return. A certificate will be issued by HMR
proof that the requirements have been met with. Without the certificate it is not possible to regist
transaction and therefore the buyer will not be able to acquire legal ownership until registration if
complete.
c) Buyers solicitor must apply to the Land Registry for their clients title to be registered. LR will pro
the buyer with a title information document containing a copy of the register showing the buyer as
new registered proprietor. This should be forwarded by the buyer’s solicitor to the lender, or if the
property is not subject to a loan, to the buyer.
d) After receiving acknowledgement from lender or buyer the buyer’s solicitor may send their file fo
storage.
Chapter 3 Legal interests
Rights and a) An easement for an interest equivalent to a fee simple absolute in possession or term of years
Interests in Land absolute.
b) A charge by way of mortgage.
Equitable interests
All other estates, interests and charges in or over land other than those mentioned above will ta
effect as equitable interests – LPA 1925, s1.
Easements
, An easement confers the right to one landowner to use the land of another in some way, or to prevent it be
used in a certain way. Examples include: rights of way (the right to cross the land of another) and rights of l
(the right to have light pass into a defined aperture from over the land or another without the light being
blocked.
Certain conditions must be satisfied before an easement can exist:
a) There must be a dominant and servient piece of land (i.e. a piece of land that has the benefit
the easement and piece of land that has the burden);
b) The right must benefit the dominant land;
c) The dominant and servient pieces of land must not be owed and occupied by the same pers
d) The right must be capable of being granted by deed and therefore must usually be:
i. Within the general nature of rights capable of being easements, and
ii. Sufficiently definite
Creation of easements
There are 3 main ways an easement can be created.
a) Express grant or reservation – most frequently created this way, usually where the owner of l
sells part of the property. In order to take effect as an easement, the right has to be created b
deed and granted for a period that is equivalent to an estate in fee simple in possession or a te
years absolute.
Where the land has a unregistered title,
Where the land has a registered title, a legal easement should be registered on the charges re
for the servient tenement.
Where both the servient and dominant titles are registered, a legal easement should be regist
against both titles.
b) Implied grant or reservation – Can only be created on a sale of part.
Where land has unregistered title a legal easement is automatically binding and needs no
registration.
Where land has registered title provided certain conditions are satisfied, such easements will t
effect as overriding interests.
c) Prescription – a legal easement may be presumed to have been granted if the claimant can sh
long and continuous user as of right.
Where land has unregistered title a legal easement is automatically binding and needs no
registration.
Where land has registered title provided certain conditions are satisfied, such easements will t
effect as overriding interests.
Easements can be extinguished in many ways:
Unity of ownership of the dominant and servient tenements. If this happens the easement will not
automatically revive if the tenements are subsequently spilt up again.
Express release by deed by the dominant owner.
Implied release, i.e. where the circumstances imply that the dominant owner has abandoned the
easement.
Public right of way
A public right of way is not an easement but a right exercisable to anyone by virtue of general law, to cross
another’s land.
Covenants
A covenant is simply a promise made in a deed and land may be subject to covenants which affect its use in
way.
Types of covenants include:
a) Positive covenant – characterised by requiring active steps to secure compliance,
b) Restrictive covenants – limit the use of the land in some way and do not require positive acts to se
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