Assignment 1 You work for Tract and Co, Licensed Conveyancers of High Street, Northtown, Cornwall. You have an appointment with a new client, Miss Helen Troy. At your meeting, she tells you that she would like to purchase Lilac Cottage on the edge of the picturesque village of Trepolpen. The price will be ? 125,000. 1. Briefly outline the matters which you will discuss with your client at this contact. (15 marks) If not already known, I would request Miss Troy’s full name and address, and a photographic ID, in order to perform client due diligence tests, i. e. hecking for conflicts of interest, and checking her identity as a precaution against potential mortgage fraud and money laundering. The date would be noted and full contact details (addresses, phone numbers, email etc) recorded for the seller(s) and estate agents, as well as Miss Troy. We would discuss costs, and I would provide Miss Troy with Tract and Co’s Terms of Engagement, and a written document estimating our costs and disbursements regarding the transaction, and ask her to sign a copy to acknowledge receipt of it. A financial calculation would be done to ensure that she could afford the transaction.
I would ask Miss Troy if she has paid any preliminary deposit, and if so, how much. If she has, this will be taken into account when calculating deposit on exchange, and the mortgage lender may need to be advised. I would find out how she intends to fund the deposit, as she may need bridging finance, and the mortgage lender may need to be advised. If undertakings are to be given Miss Troy would need to give authority. I would also enquire as to how she will fund the balance of the price, if she has obtained a mortgage certificate or offer, and if she has an outstanding mortgage on another property.
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The reason for this is so advice can be given on sources of finance and/or tax relief on interest. The lenders may insist that any outstanding mortgages are repaid as a condition of a new loan. If she will not be having a mortgage, then instructions will be given to her in regard to custody of deeds. I would ask Miss Troy whether this transaction would be dependant on the sale of another property, as details of this other sale would be needed to synchronise the timing of both.
Concerning her present property, I would ask if there is a need to give notice to determine tenancy (if renting), and to check if her current lender has a mortgage redemption penalty. The present and proposed use of the property would need to be discussed, to discover if Miss Troy wishes to change anything, and to identify the need to look at any planning aspects or restrictive covenants that might be in place. I would question her about the situation of Lilac Cottage, for example if it is near to a footpath or river, in order to identify if there is a need for a plan, and/or any special searches.
I would also ask if she expects the price to include any fittings and fixtures, and if there are any features of the house such as carpets or curtains that she wants and/or believes will remain, as these might not be fixtures and the seller might take them, or ask for additional prices for them. The tenure of the property (freehold or leasehold) and purchase price would need to be established. I would also enquire about any details of tenancies for Lilac Cottage, and if possession will be vacant, as these details will be needed in contract, as will any terms Miss Troy may have agreed with the other party.
I would talk about her preferred time-scale and the urgency of the matter, and give advice on the likely duration of the transaction, coming up with an anticipated completion date. I would reinforce the fact that other parties in the property chain such as mortgage lenders, estate agents, and other conveyancers, may move slowly and impact on timing. The chain can only move as fast as its slowest part. I would ask Miss Troy if anybody else will have an interest in the house, for example if they will be contributing towards the purchase price.
If yes, then I would determine why, and what interest they would have, as if there will be joint buyers it would be necessary to establish which form of joint ownership they wish to adopt. Any advice given would be confirmed in writing, to explicitly confirm differences between forms of joint ownership. In order to provide advice for Miss Troy, I would also question her about survey arrangements and insurance e. g. property, contents etc. I would finally advise her of her responsibility to complete a Stamp Duty Land Tax Return. 2.
Outline, with a brief description, the searches you would be likely to make at this stage, bearing in mind the location of the property. You should assume that the cottage has an unregistered title. (10 marks) -Search of Local Land Charges Register Local Land Charges consist of public matters in which local authorities, Government departments, and independent statutory corporations are interested. They bind successive owners of the land affected. When acquiring an interest in a registered estate in land, a pre- completion search would be made with the appropriate Land Registry office, Cornwall in this case.
This will provide a title number for the property, (freehold or leasehold number depending on tenure), and will show the names of the current registered title holders. A Local Land search (LLC1 form) would be made in the Register of Local Land Charges for the Cornwall local authority. It will uncover any registered matters that do not need to be disclosed by the seller. It is important that this is done before exchange of contracts, as after that point the buyer has no redress against the seller for any matters discovered. The Standard Conditions of Sale provide that a property is sold subject to: 3. . 2. (d) entries made before the date of the contract in any public register except those maintained at the Land Registry or it’s Land Charges department or by Companies House. The buyer is bound by all such matters. There are various types of matters registerable as a Local Land charge, including financial charges securing payment for work performed by a local authority, e. g road repair. Prohibitions or restrictions on the use of the land imposed by a local authority, minister of the crown, or government department are also registerable.
Any positive obligations under a post 1977 covenant, enforceable by any of those three bodies, can also be registered. As well as these, there can be any other matter designated to be a local land charge by statute. The search would be made online with landregistry. gov. uk, for speed and ease, but is also available by post/DX/fax, personal search, or over the phone. -Local Authority Enquiries These would be raised with the Local Authority using CON29R and CON290 forms. Part 1 deals with standard enquiries such as road schemes, conservation areas which would be important in relation to the position of Lilac Cottage at the edge of a village.
Other enquiries covered would be drainage agreements, planning and building regulations, contaminated land and radon gas. Part 2 covers a variety of optional enquiries, in the case of Lilac Cottage this could include public paths/byways across the property, specialised planning etc. Planning matters are important at this stage, and as the Buyer’s conveyancer the onus is on me to make sure that all enquiries and steps have been taken to ensure that there is no evidence of any breach of planning control or planning conditions imposed.
Some enquiries may be directed straight to the seller, but separate enquiry to the Local Planning Department may also be necessary. -Miscellaneous other searches Standard drainage and water enquiries of the water service company (CON 29DW form) would be made. This will provide information on whether a property is connected to a public sewer or to surface water drainage, and will include a copy of an extract from the sewer map and details of any adoption agreements. It will also notify if there are any public sewers within 100 feet of the building
As Lilac Cottage has an unregistered title I would carry out a Search of Index Map, which records the extent of every registered title and title number. This will show if there has been an earlier registration, or registration of any adverse entry which could prevent or hinder the first registration of title at completion. A Land Charges search would be made after exchange to discover if there any charges against previous owners that may not have been previously apparent. Section 24 of the Law Property act entitles a Buyer to pull out after exchange because of a Land Charge that he wasn’t aware of before.
As mining has been carried out in Cornwall in the past I would make a Coal Mining Search, which would show the likelihood of any past/present/future work and whether there has been any notice/claim for mining damage to the property in the past. Tin Mining and Clay Mining searches would also be appropriate for Cornwall, checking for danger of subsidence damage. I would also carry out a Waterways Search, as Lilac Cottage is on the edge of a village in the countryside and may be near a stream; this would identify any issues such as contribution towards costs, fishing rights etc. Additional Pre-Contract Enquiries If Lilac Cottage is a freehold a TA6 property information form would be sent to the sellers conveyance, if leasehold then a TA7 leasehold information form would be sent in addition to the TA6. A TA6 would obtain information about boundaries and their features, disputes, notices and proposals, alterations, planning and building control, guarantees and warranties, council tax, environmental matters, formal and informal arrangements, other charges, occupiers, transaction information, and connections to utilities and services.
A TA7 would obtain information about the property, relevant documents, management of the building etc, though Lilac Cottage is more likely to be freehold. -Environmental Matters I would also make an Environmental Data search, which would be the quickest and most cost-effective way of checking any contamination on the land around Lilac Cottage (as opposed to contacting individual authorities and agencies who hold the relevant information).
There is a history of contamination in England and Wales since the industrial revolution, and it would be necessary to perform this check to protect Miss Troy, in case she bought contaminated land which she could then be responsible to remediate at her own expense. She would then also be likely to file a claim in negligence against Tract & Co. A typical report such as an RPS Environmental Risk certificate would have sections on statutory registers, site history, mining and radon, and flooding.
The statutory registers section would identify nearby industrial processes or installations such as landfill or waste management sites. The site history would show the past and present industrial uses of the land, to identify if any of them may have been contaminative. Mining and radon gas issues relating to the area would be shown, as these are the main sources of insurance claims. Finally the flooding section would reveal any risk, such as the distance from the property to potential groundwater or tidal flooding. 3. Briefly outline what documentation you would expect to receive from Greensward & Co. 10 marks) I would expect to receive a letter confirming that the contract will be drawn by reference to the Standard Conditions of Sale. I would also expect Greensward & Co. to provide the sellers name, details of the property, the sale price, etc. I would also expect them to indicate, if appropriate, how much will be payable for the land and buildings, and for the fittings and fixtures. A TA6 Property Information form would provide the property details, e. g. alterations, boundaries, utilities details etc. Greensward & Co would have their client complete and sign this form before sending a copy onto us.
They would do the same with a TA10 Fittings and Contents form, which would provide information about basic fittings, kitchen contents like ovens and fridges, bathroom fittings etc. Greensward and Co. would also be expected to ask us to confirm receipt of our instructions from Miss Troy as the buyer. They would enquire about our ability to proceed, and ask if there is a linked sale that Miss Troy needs to complete, in order for her purchase of Lilac Cottage to proceed. They would also ask if she needs mortgage finance, and if so, what her current position is, i. e. oes she have an offer. They may mention that they are adapting a protocol style procedure. Another document that I would expect is the Energy Performance Certificate for Lilac Cottage. This will show the properties current Energy Efficiency rating, which shows how efficient the building is. The higher the rating the better, as more energy efficient homes will generally have lower fuel bills. It also gives an Environmental Impact (C02) rating for the property, which shows the carbon dioxide emissions level. The higher the rating the more environmentally friendly the property is.
The certificate also gives recommended measures to improve both ratings, and a potential figure that both could reach if the measures were implicated. If the property has had any building work done, e. g. an extension, then I would expect to receive any planning permission documents and building regulation forms. If there have been new windows put in since 2002 (which will show in the Property Information form) then a FENSA certificate would be provided to show they were installed to the right specifications. An ELECSA/NECEIC certificate would be provided if there had been any electrical work carried out after 1 January 2005.
I would expect to receive Official Copies of the Register Entries from the Cornwall Land Registry. (These would be Form OC1 and OC2). They will show the up to date position on Lilac Cottage’s Title with regard to ownership, covenants, and charges. E. g. is the property freehold or leasehold, what charges i. e. mortgages are registered etc. A Title plan would also be included, which is a drawing of the immediate land with the property boundaries made clear. If Lilac Cottage has an unregistered title then I would expect to receive an Epitome of Title to prove the seller’s title.
This is a brief history of the property containing evidence of the latest conveyances on it. It must start with a good root of title, e. g. a Conveyance on sale, made at least 15 years ago. 4. When checking the draft contract received from Greensward & Co. , what will you be looking for? (15 marks) The first thing that I would look for on the draft contract would be to check the details on the front page to ensure they include all the necessary information, and that any details are correct. For example the sellers name should match those given in the Official Copies or unregistered title deeds.
The ‘Date’ section should be left blank until contracts are exchanged. The seller’s full names should be given, and correspond with the Property Register or the last conveyance. The buyers name may be left off until near to exchange. There should be a Property/Title description that is clear and specifies the tenure of the title (freehold or leasehold) and the class of the title e. g. Absolute, Good leasehold etc. I would be looking for concise and accurate language and terms, as inaccuracies could lead to an action in mis-description or misrepresentation.
A title number/root of title should be present, as given in the Property Register, or conveyance more than 15 years old. Specified incumbrances should be shown, as they are the seller’s duty to disclose, and include old and new covenants, reservations etc. Also, if appropriate, Greensward & Co. should include a reference to an indemnity covenant. This section, for brevity, will often class the incumbrances as ‘matters referred to in the Property and Charges Register of the title. ‘ The Title Guarantee defines the scope of implied covenants for the title, and can be full or limited.
I would look for the Completion Date to be left blank until exchange, due to the open contract rule, and if general conditions aren’t satisfactory. It will be important to check the ‘contract rate’ section as this will affect how much interest can be claimed if there is a delay in completion. It is usually 4% above a bank base lending rate, so I would check to make sure it is at this figure, and enquire further if it was significantly different. I will check that the purchase price of Lilac Cottage is stated correctly, and the same for the deposit, which is normally 10%.
There will also be a Chattels price section, if separate, which shows the amount payable for specified fixtures and fittings. The balance should be given underneath these, which is the purchase price less deposit, plus any chattels figure. On the back page I would look for an attached copy of the Fixtures and Fittings list, and a list of Special Conditions required, e. g any covenants, property sold with vacant possession etc. I would check that the Special Conditions are reasonable and not onerous.
I would expect the draft contract to arrive with supporting documents such as Official Copies and Title Plan, (Epitome of Title if unregistered). Property Information form, etc. I would check the Official copies entries to see if there are any second charges (mortgages) and make note of these. I would also check for any Notices or Restrictions on the title, and the terms of any covenants that will be binding on Miss Troy. I would check the Title Plan for rights of way, supply and drainage etc and any rights reserved over the property in favour of adjoining properties.
If unregistered, I would have expected to receive details of rights, reservations and covenants separately by the seller’s conveyancer, and would perform the same checks on these. The Property Information form and Fixtures and Fittings form would need to be checked before the Contract could be approved, to make sure all relevant questions have been answered, and to request answers to any unanswered questions. If any clarification is required on certain points this would be requested also. Any identified Additional Enquiries could now be listed and noted ready to be raised with the selling conveyancer.