Property Practice 2

Question 1

What is the deadline to pay capital gains tax?

Answer 1

60 days after completion

Question 2

What must the solicitor first do to the client in Stage 1 Pre Market?

Answer 2

• interview/send a checklist to the client to obtain essential information regarding the client’s matter
• send a client care letter (level of service and the costs)
• obtain appropriate identification documentation
• carry out due diligence checks

Question 3

What is a survey on purchase?

What is the result?

Answer 3

When the BUYER’S solicitor advises the buyer to carry out a physical inspection of the property for defects

If defects are found = reduced offer/withdrawal

Question 4

What is CGT?

What is the relevant relief?

Answer 4

A tax on profits made when the taxpayer disposes of an asset that has increased in value

Principal Private Residence Relief

Question 5

What is an undertaking?

Answer 5

A promise enforceable against the solicitor and the solicitor’s firm arising whenever they say they will do something

Question 6

Can a buyer’s solicitor act for the buyer’s lender too?

Answer 6

Yes, in residential transactions

They have the same common interests (acquire a good and marketable title)

Subject to certain conditions

Question 7

If a buyer instructs a solicitor not to disclose a certain issue to the lender (who the solicitor is also acting for), what must the solicitor do?

Answer 7

Cease acting for the lender. Duty of confidentiality to the buyer is paramount

Question 8

Can a solicitor act for both the buyer and seller?

Answer 8

Generally no due to risk of conflict

Question 9

A solicitor can act for the buyer and their lender provided that:

Answer 9

• the lender is an institutional lender providing loans in the ordinary course of business
• the standard certificate of title is provided
• no conflict of interest/risk (risk considered not high if standard terms are used)

Question 10

What should a solicitor do if a client doesn’t want them to disclose a fact to the lender like impending bankruptcy?

Answer 10

Solicitor should cease to act for both
BUT if there’s an absence of a breach of confidentiality
The solicitor can continue to act for one of the parties (usually the buyer)

Question 11

When will the lender often appoint their own solicitor?

Answer 11

In commercial transactions

Question 12

What must a solicitor ensure before acting for more than one seller/buyer?

Answer 12

• ensure that they are instructed by each of the clients (provided that there’s no conflict of interest)

E.g: husband and wife selling a property they jointly own

Question 13

How can a legal estate be jointly owned?

Is there a limit on the number of people who can hold a legal estate?

Answer 13

Only as joint tenants

Yes, Max 4

Question 14

What is a declaration of trust document?

What else should they make?

Answer 14

A document tenants in common should enter into
Sets out the circumstances of the purchase and their contributions and shares in the property

A will since the doctrine of survivorship doesn’t apply

Question 15

What is the Law Society Conveyancing Protocol?

What is the scope of use?
What is not within the scope?

Answer 15

A statement of best practices for residential conveyancing introduced by The Law Society?

• Can be used in transactions involving freehold and leasehold property
• Covers situations where both buyer and seller have mortgage lenders and the solicitor acts for the lender

NOT to be used in the purchase of new build homes or commercial property