QLTT Head I Property and Probate. Example Test

Transcription

1 QLTT Head I Property and Probate Example Test

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3 - Part A - Conveyancing and Land Law Candidates must answer Question 1 and either Question 2 or Question 3. Question 1 You act for Malcolm and Lucy Jones who have agreed to purchase Flat 7 Alexandra Court, Evesham, Worcestershire for 251,000 including all carpets, curtains and kitchen appliances. Malcolm and Lucy are first time purchasers and are borrowing 90% of the purchase price on mortgage from the City and County Building Society, for which you also act. The seller is Mavis Lee, the daughter and the sole executor of the will of the late Edwina Lee. Mrs Lee s husband, Norman Lee, died a year ago. The seller s solicitors have supplied you with a draft contract (Document 1) and official copies of the register entries (Document 2). The lease contains the usual requirements regarding notices to the Landlord following completion. (a) Explain the amendments you would seek to make to the draft contract. (13 marks) (c) List and explain briefly the title documents you will need to see to satisfy yourself that the seller can transfer a good title to the property free from encumbrances. (8 marks) What steps must you take after completion and when must these steps be taken, to protect the interests of the Malcolm and Lucy and City and County Building Society? What would be the consequences of failure to comply? (8 marks) (d) What would be your reaction if the class of title on the Proprietorship Register was Good Leasehold and why? (4 marks) (Total 33 marks) BPP PROFESSIONAL EDUCATION 1

4 Document 1 CONTRACT (Incorporating the Standard Conditions of Sale (Fourth Edition)) Date : Seller : Norman Lee and Edwina Lee both of Flat 7 Alexandra Court, Evesham, Worcestershire Buyer : Malcolm Jones and Lisa Jones both of 16 Quarry Hill Road, Pershore, Worcestershire Property (freehold/leasehold) : The leasehold property comprised in a lease dated 14 August 1992 and made between Johnson Housing Association Limited (1) and Jane Lindsay Stevens (2) ( the lease ) known as Flat 7 Alexandra Court, Evesham Worcestershire registered at HM Land Registry with title absolute Root of title/ Title Number : HW17635 Specified Incumbrances : The rent reserved by the Lease and the conditions, covenants and stipulations contained in the Lease and the Entries in the Charges Register Title Guarantee (full/limited) : Limited Completion date : Contract rate : 8% above the base rate of Lloyds TSB Bank Plc from time to time in force Purchase price : 251,000 Deposit : 25,100 Chattels price (if separate) : NIL Balance : 225,900 The Seller will sell and the Buyer will buy the Property for the Purchase Price Warning This is a formal document, designed to create legal rights and legal obligations. Take advice before using it. Signed Seller/Buyer BPP PROFESSIONAL EDUCATION 2

5 SPECIAL CONDITIONS 1. (a) This contract incorporates the Standard Conditions of Sale (Fourth Edition). The terms used in this contract have the same meaning when used in the Conditions. 2. Subject to the terms of this contract and to the Standard Conditions of Sale, the Seller is to transfer the property with either full title guarantee or limited title guarantee, as specified on the front page. 3. The chattels which are on the property and are set out on any attached list are included in the sale and the buyer is to pay the chattels price for them. 4. The property is sold with vacant possession on completion (or) 4. The property is sold subject to the following leases and tenancies: A lease dated 14 August 1992 for a term of 99 years from 1 October 1991 at a rent as therein mentioned and made between 1. Johnson Homes Housing Association Limited 2. Jane Lindsay Stevens BPP PROFESSIONAL EDUCATION 3

6 Document 2 OFFICIAL COPY This official copy shows the entries subsisting on the register on 22 November 2005 at This date must be quoted as the search from date in any official search application based on this copy. Under s.67 of the Land Registration Act 2002 this copy is admissible in evidence to the same extent as the original. Issued on 22 November This title is administered by SWANSEA District Land Registry. Land Registry Title Number: HW Edition Date: 21 August 1994 A: Property Register containing the description of the registered land and the estate comprised in the Title. COUNTY WORCESTERSHIRE DISTRICT WYCHAVON 1. The Leasehold land shown and edged red on the plan of the above title filed at the Registry registered on 24 August 1992 known as Flat 7 Alexandra Court, Evesham Worcestershirehire WR11 2EX 2. Short particulars of the lease under which the land is held: DATE: 14 August 1992 TERM: 99 years from 1 October 1991 RENT: As therein mentioned PARTIES: 1. Johnson Homes Housing Association Limited 2. Jane Lindsay Stevens B: Proprietorship Register stating the nature of the title, name and address of the proprietor of the land and any entries affecting the right of disposal. Title Absolute 1. (21 August 1994) PROPRIETOR: NORMAN ALBERT LEE and EDWINA GERTRUDE LEE, his wife, both of Flat 7 Alexandra Court, Evesham, Worcestershire BPP PROFESSIONAL EDUCATION 4

7 C: Charges Register containing charges, incumbrances etc adversely affecting the land. 1. (24 August 1992) A transfer of the land in this title dated 26 June 1980 made between (1) George Bradshaw (Transferor) and (2) Jack Morgan (Transferee) contains a covenant not to use the property for business purposes 2. (21 August 1994) REGISTERED CHARGE dated 30 June (21 August 1994) PROPRIETOR: DAVENTRY BUILDING SOCIETY of Economic House, P.O. Box 9, High Street, Daventry CV1 5QN ****END OF REGISTER**** NOTE: A date at the beginning of an entry is the date on which the entry was made in the Register. BPP PROFESSIONAL EDUCATION 5

8 Question 2 You act for Jill Daltrey who intends to purchase a new property, Plot 12, Cavendish Court, Caterham, Surrey from Ambassador Homes Limited for 290,000. Jill is a first time buyer currently living with her parents. Your client is receiving a mortgage advance of 210,000 from the Torcross Building Society with the balance of the purchase money coming from money Jill has in a Savings Account with the Remnant Building Society. The contract is subject to the Standard Conditions of Sale (4 th Edition). Contracts were exchanged on Friday 2 nd December and completion is fixed for Friday 16 th December (a) On Monday 5 th December, Jill rings you in a panic and tells you that the money she has in Remnant Building Society is in a high interest account and she cannot have access to it until she gives 15 days notice, ie not until 20 December. What will be the consequences under the contract if Jill completes on 20 th December 2005? Can you suggest an alternative solution? (7 marks) Assume for this part of the question that on 5 th December 2005, Jill rings you and tells you that she has been made redundant. She had only worked at her place of employment for nine months and she is not entitled to any redundancy money. She tells you that she contacted the Torcross Building Society and informed them of this and they have reluctantly decided that they will have to withdraw the mortgage offer. What remedies will the seller be entitled to under the contract following the completion date and what process must they follow? (10 marks) Total 17 marks BPP PROFESSIONAL EDUCATION 6

9 Question 3 You act for the Buyer of Wilbury House, Rookery Road, Twyboston, Bedfordshire from Terence McDermott. Wilbury House consists of a large four bedroom dwelling set in four acres of land. The Seller has operated a garden nursery from the property which produces a variety of flowers. Your client intends to carry on that use. Title to the land is unregistered. You have been supplied with an Epitome of title which contains the following Extract: EXTRACT from a CONVEYANCE dated 12 May 1977 and made between RAYMOND KENNEDY (the Vendor) and ROBERT PAISLEY (the Purchaser) The Purchaser hereby covenants with the Vendor and with his successors in title for the benefit of the Retained Land that the Purchaser will not use the Property hereby conveyed for any business purpose. You carry out a Land Charges search of the appropriate estate owners and the result is shown below as Document 3. (a) What is the significance of the search result against the name of Robert Paisley? (9 marks) Explain the significance of the entries against the name of the seller. What requisitions would you raise of the seller s solicitor? (8 marks) Total 17 marks BPP PROFESSIONAL EDUCATION 7

10 Document 3 LAND CHARGES REGISTER CERTIFICATE OF THE RESULT OF THE SEARCH CERTIFICATE NO. F PAGE 0001 CERTIFICATE DATE 1st December 2005 PROTECTION ENDS ON 21st December 2005 It is hereby certified that an official search in respect of the undermentioned particulars has been made in the index to the registers which are kept pursuant to the Land Charges Act The result of the search is shown below. PARTICULARS SEARCHED COUNTY OR COUNTIES BEDFORDSHIRE NAME(S) Particulars of Charge PERIOD FEES ROBERT *PAISLEY* NO SUBSISTING ENTRIES TERENCE *MCDERMOTT* (1) C(iv) NO DATED 6 JUNE 2005 (2) WILBURY HOUSE (3) TWYBOSTON (4) BEDFORDSHIRE (1) F NO DATED 22 AUGUST 2005 (2) WILBURY HOUSE (3) TWYBOSTON (4) BEDFORDSHIRE END OF SEARCH APPLICANTS REFERENCE CHR/22 PRICE PRIOR RED LION STREET LONDON WC1R 4NY APPLICANTS KEY NUMBER AMOUNT DEBITED 4.00 Any enquiries concerning this certificate to be addressed to:- The Superintendent Land Charges Department Burrington Way Plymouth PL5 3LP BPP PROFESSIONAL EDUCATION 8

11 - Part B - Wills and Probate Candidates must answer Question 4 and either Question 5 or Question 6. Question 4 Your firm, Street Proctor, of Holborn, is consulted by Miles Cavanagh regarding preparation of his first will. An associate attends an interview with the client and takes the following instructions and information from him: Testator: Miles Cavanagh of Bridgewater Hall, Bridgewater Nr Sunhampton, aged 45. Occupation: Freelance Journalist. Intended Beneficiaries and Family: His 2 children Vivian (17) and Victoria (12) by his former spouse Dr Moira Worth a clean break divorce in Fiona Harvey (36) with whom he has been cohabiting since 2003; they share their time together equally, travelling between her London property in Glebe St, her second home in Zurich, and Bridgewater Hall. John Jones, the client s gardener. Charities: Sunhampton Home for the Destitute (but no other charity should benefit if the gift fails). St Cuthbert s College, University of Camford. The Estate: Proposed terms of will: The total value is estimated to be in the region of 3.7 million and includes: - Bridgewater Hall (worth 1.9 million less mortgage debt); personal effects (including inherited jewellery, plate, linen, furniture, household effects, books, clothing and motor vehicles); - investments and accounts (in banks and building societies, venture capital trusts, pension trusts, quoted stocks and shares etc.) - Cavanagh Timber Sales a business in sole ownership of testator, situated in a small part of his late uncle Richard s estate in the Lake District and gifted to him in Presently carried on by manager. (Value approx. 750,000) - Mortgage Protection policy. Executor: Street Proctor solicitors, Holborn, London WC1V. Legacies: 25,000 to the Sunhampton Home for the Destitute Book collection to St Cuthbert s College BPP PROFESSIONAL EDUCATION 9

12 500 to the gardener Jewellery inherited from testator s mother to be shared equally between Fiona, Vivian and Victoria. Bridgewater Hall and personal effects (subject to gift of jewellery) to Fiona. Residue: To Vivian and Victoria equally at 21. On the basis of these instructions your associate has prepared a draft will for your perusal, as follows: Draft Will THIS IS THE LAST WILL AND TESTAMENT of me Miles Cavanagh of Bridgewater Hall Bridgewater Nr Sunhampton Wessex dated of I HEREBY REVOKE all former wills and testamentary dispositions. 2. I APPOINT the firm Street Proctor, solicitors of Holborn London WC1V, or such firm as at the date of my death has succeeded to and carries on its practice (hereinafter called my Executors ) to be the executors of this my will. 3. I GIVE the following legacies free of tax: (a) (c) (d) (e) (f) 25,000 to the Sunhampton Home for the Destitute for its general charitable purposes. My collection of books to St Cuthbert s College, University of Camford free of all costs of package, carriage and insurance incurred for the purposes of giving effect to this gift. The jewellery which I inherited from my mother to Vivian Cavanagh, Victoria Cavanagh and Fiona Harvey equally. My freehold property known as Bridgewater Hall aforesaid to Fiona Harvey absolutely 500 to my gardener Subject to the above gifts my personal belongings to the said Fiona Harvey absolutely 4. I GIVE the rest of my estate both real and personal ( my residue ) to be shared equally between such of my said children Vivian and Victoria as shall survive me and attain the age of 21 save that if either child shall predecease me or fail to attain a vested interest the surviving child shall take the whole of my residue absolutely subject to their attaining My Executors shall have the following powers in addition to those they possess under the general law: (a) to invest as if beneficially entitled BPP PROFESSIONAL EDUCATION 10

13 (c) (d) to exercise the power of appropriation conferred by s41 of the Administration of Estates Act 1925 without obtaining any of the consents required by that section to insure any asset of my estate on such terms as they think fit to exclude the equitable rules of apportionment SIGNED by the above named Testator ) in our joint presence and ) then by us in his ) Questions (a) Explain whether the content of the draft will is satisfactory or whether additions, amendments and/or further instructions are appropriate. Where you wish to criticise the draft please describe the nature of the defect and propose a means of correcting it. Do not attempt to draft or redraft any provision. (23 marks) (c) If Miles Cavanagh were to die without executing a will indicate the basis on which his estate would devolve and who would be entitled to it. Briefly explain the position of Fiona Harvey in these circumstances. (5 marks) Assume that clause 4 as drafted becomes active. Will there be a charge to Inheritance Tax or Capital Gains Tax when each child reaches 21? (5 marks) Total 33 marks BPP PROFESSIONAL EDUCATION 11

14 Question 5 Edward Fennell died in November and you are consulted about the estate by his sister Jennifer Byrne. The deceased s will, which includes a standard attestation clause reciting compliance with formalities, was prepared by your firm several years ago. It contains no non-residuary gifts and simply disposes of the net estate in two equal shares as follows: Share No 1 is to be held on trust for Christine aged 18 and Dexter aged 15 in equal shares contingently on each attaining the age of 25. Share No 2 is given to Jennifer absolutely. The will appoints one of your partners to be sole executor but she has predeceased Edward. Execution of the will took place at Edward s home, with a neighbour and Jennifer s husband signing as witnesses. Jennifer, who was present, cannot remember the precise nature of the procedure but thinks that her husband may have signed the will before Edward. Christine and Dexter are the children of Edward s deceased brother Howard. Edward, who had never married and was aged 65 at his death, had no other relatives. The gross estate amounts to approximately 850,000. All debts and tax are estimated to be approximately 250,000. All estate assets will devolve under the grant. Questions (a) (c) On the assumption that the will is valid, explain who is entitled to Edward Fennell s estate. You should assess what each beneficiary will or may receive and state whether their interests are vested or contingent. (5 marks) Explain which type of grant is appropriate, who is entitled to extract it and which documents must be submitted to the Registry with the application to prove the validity of the will. (7 marks) If Christine died before administration was complete how, if at all, would this affect beneficial entitlement to the estate? (3 marks) (d) Briefly explain any other claims Jennifer may have. (2 marks) Total 17 marks BPP PROFESSIONAL EDUCATION 12

15 Question 6 Jim Wang died 10 months ago. You act for his widow Tiffany (54), who is your co-executor and co-trustee of his estate. Jim s will bequeathed a legacy of 275,000 in favour of his two named children, Benny (21) and Diesel (23) in equal shares on their attaining 26. The residue is given to Tiffany absolutely. There were no other gifts. A grant of probate has been obtained and the estate consists of the following assets at their probate values: Portfolio of quoted stocks and shares 290,000 Jim s beneficial interest in 90, Lower Mill Estate held jointly with Tiffany 320,000 Fastrak Life Assurance policy proceeds payable to the estate 300,000 Astral Savings Bank accounts in sole name 250,000 Personal effects 50,000 1,210,000 Tiffany is financially secure in her own right and wishes to give the portfolio of shares to Benny and Diesel equally. The shares are now valued at 310,000. Neither Jim nor Tiffany have made previous lifetime transfers. Questions (a) Explain (i) the Inheritance Tax and (ii) the Capital Gains Tax consequences if Tiffany gives effect to her wishes by a lifetime gift; or a post death variation of Jim s will. Advise which alternative is to be preferred in each case. (8 marks) (c) Will an Inland Revenue form have been submitted when application for the grant was made and, if so, why and which one? (2 marks) Benny and Diesel wish to know if they can access any part of their legacy before attaining 26. There are no express trustee powers in the will. Advise them. (7 marks) Total 17 marks BPP PROFESSIONAL EDUCATION 13

16 End of Examination BPP PROFESSIONAL EDUCATION 14