Unit 4 - Completion

Question 1

If a private individual executes the transfer deed, what specific formality must be observed?

Answer 1

The signature must be witnessed by an independent witness

Question 2

Which form is used for a pre-completion search against a registered title number when selling the whole property, and what priority period does it confer?

Answer 2

Form OS1.

It confers a priority period of 30 working days from the date of the search result

Question 3

A buyer is using a mortgage to finance a registered property purchase. In whose name should the Land Registry search application be made to confer priority on both parties?

Answer 3

The application should be in the name of the lender

Question 4

What form is used for a pre-completion land charges search for unregistered land, and how long is the resulting priority period?

Answer 4

Form K15. It confers a priority period of 15 working days

Question 5

Which special Land Charges search form is used to check an individual buyer’s solvency on behalf of the lender for registered land?

Answer 5

Form K16 (‘Bankruptcy only’ search)

Question 6

If the seller is a company, why should the company search be carried out as close as possible to the day of completion?

Answer 6

Because the search has no priority period, and it needs to reveal the latest information regarding the seller’s solvency and existence

Question 7

What are the different priority periods for unregistered vs registered land?

Answer 7

Unregistered land - 15 working days through Form K15

Registered land - 30 working days through Form OS1

Question 8

According to the standard conditions, by what time must money due on completion be paid?

Answer 8

Before 2 pm on the day of completion

Question 9

If a buyer fails to pay the completion funds before the 2 pm deadline, what is the consequence?

Answer 9

Completion is treated as taking place on the next working day as a result of the buyer’s default

Question 10

What are the deadlines for paying SDLT and LTT after completion?

Answer 10

SDLT must be paid within 14 days (to HMRC)

LTT must be paid within 30 days (to the Welsh Revenue Authority)

Question 11

If a company grants a new mortgage, what is the absolute deadline for the lender’s solicitor to register the charge at Companies House?

Answer 11

Within 21 days of its completion

Note - just for companies

Question 12

What Land Registry application form is used by the buyer’s solicitor to register the transfer for registered land?

Answer 12

Form AP1

Question 13

A buyer has purchased an unregistered title. What is the deadline for applying for first registration of title

Answer 13

The application must be made within 2 months of completion

Question 14

If completion is delayed, does the non-defaulting party normally have the right to terminate the contract immediately?

Answer 14

No, the non-defaulting party is not normally able to terminate the contract at that stage

Question 15

Under which set of standard conditions (SCs or SCPCs) is only the buyer liable to pay contractual compensation for delayed completion?

Answer 15

Under the SCPCs (Standard Commercial Property Conditions)

Question 16

When can a party first serve a Notice to Complete?

Answer 16

After the contractual completion time on the contractual completion day

Question 17

What two consequences result from serving a Notice to Complete?

Answer 17

It makes time of the essence and gives the other party 10 working days to complete

Question 18

When does the Notice to Complete start from and how long is it?

Answer 18

Excluding the date of service so 10 working days from the following day

Question 19

What happens if a notice to complete has been seved to a buyer and there is no or less than 10% deposit paid on exchange?

Answer 19

The seller can demand that the shortfall is paid immediately to them

Question 20

A buyer defaults on a £300,000 purchase where a 10% deposit was paid. On what financial amount is the daily compensation rate calculated?

Answer 20

The compensation is calculated on the balance of the purchase price less the deposit paid, which is £270,000

Question 21

If the buyer defaults and fails to comply with a Notice to Complete, what remedy is available to the seller regarding the deposit?

Answer 21

The seller is able to forfeit the deposit (keep)

Question 22

What form of evidence does a lender provide to confirm the discharge of a mortgage (other than e-DS1 or ED system)?

Answer 22

Land Registry Form DS1

Question 23

For registered land, when does the legal title pass to the buyer?

Answer 23

The legal title does not pass until the buyer is registered at the Land Registry as the proprietor of the land

Question 24

What is the maximum priority period conferred by a land charges search on Form K15?

Answer 24

15 working days

Question 25

A buyer's solicitor is applying for a Land Registry search for a registered title. Why should this application be made in the name of the lender if the buyer is using a mortgage?

Answer 25

The results will confer **priority** on both the buyer and the lender over anyone else making a competing application.

Question 26

A buyer is taking out a mortgage on a property. The lender requires a solvency check against the individual borrower. If the land is unregistered, how is this typically done?

Answer 26

The solicitor will already be making a land charges search against the seller, so the name of the buyer will be added to the search to be searched against on **Form K15**

Question 27

If a completion occurs on December 1st, by what date must the buyer's solicitor ensure Stamp Duty Land Tax (SDLT) is paid?

Answer 27

Within **14 days of completion**, so by December 15th.

Question 28

If a buyer's solicitor sends the balance of the purchase price at 3 pm on the contractual completion day, what is the consequence?

Answer 28

Completion is treated as taking place on the **next working day** as a result of the buyer's default, as payment must be made before 2 pm.

Question 29

The seller's solicitor gave an undertaking to redeem the seller's outstanding mortgage using the completion money. What must the seller's solicitor send to the buyer's solicitor as evidence once the mortgage is discharged?

Answer 29

Evidence of discharge, such as a completion certificate or an electronic discharge message, must be provided.

Question 30

You act for a buyer of a property and are drafting the TR1. In the final panel you need to draft the execution clause. Who executes the transfer?

Answer 30

The transferor (seller) will always execute the transfer and the transferee (buyer) will also execute it in specified circumstances: Such as if there is more than one transferee (as they will need to make a declaration of co-ownership in the transfer) and also if the transferee is entering into a covenant in the TR1.

Question 31

The results of the pre-completion search at the Land Registry take the form of an official certificate of search which confers a period priority on the applicant. For how long after the date of the certificate does the applicant have priority? (registered land)

Answer 31

This is registered land so the applicant has **30 working days.** This provides protection to the buyer (and lender) against any subsequent entries which are placed on the resister after the date of the search but before the buyer is registered as the new proprietor. The buyer takes free from these entries provided that a correct application to register them as a new proprietor is received by Land Registry by 12pm on the last day of the priority period.

Question 32

Can you receive damages under both contractual damages and compensation?

Answer 32

Yes but any damages awarded should take into account any compensation given as you can't recover twice

Question 33

How do you work out compensation for late completion awarded? Assume that the balance is £270k Interest rate 8%

Answer 33

Balance (price - deposit) = £270k Multiplied by contract rate (0.08 as interest 8%) = £22,950 / 365 (to get daily rate) = £67.07 Then daily rate is multiplied by no. of days in default 4 days x 67.07 = £268.27

Question 34

Is late completion calculated on working days or everyday?

Answer 34

Everyday

Question 35

What special searches are conducted if the seller is a company? And how many times?

Answer 35

**Company search at Companies House** * Once as part of pre-contract searches to check to see if the company is solvent and ascertain any fixed / floating charges over property * Then carried against just before completion to check no further charges have been created over the property and the seller is still in existence

Question 36

A company is purchasing the freehold of a commercial property with registered title. The property is being acquired by the company with the aid of a mortgage. Contracts have been exchanged, requisitions on title made, and the company’s solicitor has conducted a pre-completion priority search of the title in the name of the lender. Following completion, the solicitor acting for the lender is to deal with the registration of the mortgage at Companies House. **The mortgage should be registered at Companies House within 21 days of which occurrence?** A) The date of its creation, to avoid the lender’s power of sale arising under the mortgage. B) The date of its creation, to avoid rendering the charge void against the company’s liquidator or administrator and other creditors. C) The date of the result of the priority search, to avoid subsequent entries binding the lender

Answer 36

B is correct - failure to render within time limit may **prejudice the lender's security or render charge void against company's liquidator or administrator or other creditors** A is wrong - power of sale linked to default of mortgage C is wrong - priority search is relevant to registration at Land Registry

Question 37

If completion is occuring by The Law Society Code for Completion by Post - which side acts as the agent?

Answer 37

The seller's solicitor acts as the agent for the buyer's solicitor for the purpose of carrying out the completion procedure Completion likely to take place at the office of the seller's solicitor

Question 38

If a solicitor is acting for a buyer and a lender in an unregistered property, what searches need to be carried out?

Answer 38

Land Charges Search K15 for both buyer and seller (as purchasing with a mortgage and you are acting for the lender) Don't need to separate K16 the K15 includes bankruptcy

Question 39

If a solicitor is acting for a buyer and a lender in a registered property, what searches need to be carried out?

Answer 39

OS1 (whole property) or OS2 (part of property) at Land Registry K16 Land Registry search for bankruptcy

Question 40

Is stamp duty inclusive or exclusive of VAT?

Answer 40

SDLT is payable on the **total purchase price plus VAT** and the deadline is 14 days from completion

Question 41

Who is the Completion information and undertakings form (TA13) sent to?

Answer 41

The seller's solicitor