LEVEL 6 UNIT 17 CONVEYANCING SUGGESTED ANSWERS - JANUARY 2013

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1 Note to Candidates and Tutors: LEVEL 6 UNIT 17 CONVEYANCING SUGGESTED ANSWERS - JANUARY 2013 The purpose of the suggested answers is to provide students and tutors with guidance as to the key points students should have included in their answers to the January 2013 examinations. The suggested answers set out a response that a good (merit/distinction) candidate would have provided. The suggested answers do not for all questions set out all the points which students may have included in their responses to the questions. Students will have received credit, where applicable, for other points not addressed by the suggested answers. Students and tutors should review the suggested answers in conjunction with the question papers and the Chief Examiners reports which provide feedback on student performance in the examination. Question 1(a) Smiths solicitors have confirmed that the conveyancing protocol applies to this transaction and so the contract bundle must include the following documents: 1(b) Official copy and filed plan for New Street as the title is registered; The draft contract of sale; and A completed Sellers Property Information Form (SPIF) and Fittings and Contents Form (FCF). The following requisitions should be raised: Please provide a certified copy of the marriage certificate for Jennifer Brown/Andrews. The estates agent s particulars and the correspondence from Smith and Co identifies the seller as Ms Jennifer Brown, however entry number 1 of the Official Copy refers to Jennifer Andrews as the owner. A certified copy of her marriage certificate is required to prove her name change (i.e. she is the same person). Please provide us with an Official Copy of the Conveyance dated 24 August 1940 and made between Allerdale Borough Council (1) and Jonathan Rider (2). The conveyance contains restrictive covenants which will probably be binding on a purchaser, however as these covenants have not be extracted to the title, a copy of the conveyance containing these has been filed at the Land Registry and so the purchaser requires a copy of these restrictive covenants. Another reason for requesting a copy of this conveyance is that it also contains a declaration as to boundary structures. Further, the restrictive covenants may affect or prevent the client s proposed building works. Page 1 of 11

2 Please confirm that David Andrews has given his consent to the sale of the property and has agreed to sign special condition 7 of the contracts for sale, the occupiers consent and confirm that he is no longer in occupation of the property. Entry number 4 of the Charges Register shows that David Andrews has registered a Family Law Act 1996 notice against the title for the property which a purchaser will take subject to. This notice needs to be removed on or before completion using a completed HR4 and David Andrews must agree to remove this registration and not to register any more notices. Question 2(a) The Replies to the Enquires of the Local Authority show that both New Street and Green Lane are adopted and maintainable at the expense of the Local Authority and so the clients will have a right of way over these roads. Staples Lane is unadopted and so raises issues of maintenance and access. Maintenance: If a road serving the property is unadopted then the properties served by that road will usually have to pay the costs of any repairs themselves. We need to raise enquires of the seller s solicitors in respect of Staples Lane to see if there is a formal or informal arrangement regarding maintenance and the amount of payments made in the past (if any). We need to advise the client that if no one carries out any repairs there is the danger that the road can fall into a poor condition and may become unusable (e.g. unfit for driving/in danger of causing damage to vehicles). We should refer to the client s mortgage survey to check the condition of the road. Details about past maintenance fees paid by the seller (if any) should be contained in the Property Information Form which therefore needs to be carefully checked and this should have been supplied with the contractual documentation. Access: Unless the road is a public right of way, access over Staples Lane will only be possible if there is an easement in favour of the owner of New Street. Ideally therefore we need a legal easement, which may be set out in the title deeds but not necessarily [old easements are still overriding interests provided they are apparent, or have been used in the last year and have not yet been registered]. Even if there is such an easement, we need to ensure that it extends to vehicular access as the client needs access by car to the rear garage. We need to ask the seller s solicitors to see if there is a formal easement and if so to provide us with a copy. Alternatively, the seller could have obtained prescriptive rights over Staples Lane through a usage over at least 20 years. It seems that this applies as the property was built in at least 1940, see entry 2 of the Property Register. (i.e. more than 20 years ago). We would need to raise a requisition on this with the seller s solicitors. Page 2 of 11

3 The Lender: We will need to inform the lender that Staples Lane, the road to the rear of the property is unadopted, any rights of access/maintenance. The lender will refer this smatter to its surveyor who will probably find this is not a key issue as there is access to the front of the property via New Street, which is adopted. If the client refuses to let us contact the lender then we must cease acting for the lender. 2(b) Planning permission will be required for the small extension to the garage as this constitutes building operations. The General Permitted Development Order may apply to the garage extension if it is small enough to fall within the requirements meaning that planning consent is automatically granted for the extension. We need information from the client on the size of the proposed garage extension. Buildings Regulations approval will also be required for the proposed garage extension. We require a copy of the conveyance dated 24 August 1940, which contains restrictive covenants, as these may prevent and/or limit any further building works to ascertain whether the consent of the person with the benefit of these restrictive covenants is needed in relation to the proposed garage extension. Entry 3.9(m) of the replies to the enquiries of the Local Authority (LA) show that there is a tree preservation order (TPO). It is an offence to cut or lop a tree protected by such an order, without permission, and so we will need to raise enquiries with the LA to determine the location of any tree or trees covered by the TPO to determine whether it will interfere with our client s proposed garage extension. 2(c) A repayment mortgage is where during the term of the mortgage both the capital, here 150,000, and the interest are repaid monthly. At the end of the term, here 25 years, the mortgage is paid off. An interest only mortgage is where throughout the term monthly payments payoff the interest only and at the end of the term the capital sum remains outstanding, here 150,000. Thus the monthly payments for interest only mortgages are generally lower than for repayment mortgages. Another method is required to pay off the capital at the end of the term such as an endowment or personal pension plan. Question 3(a) The death of a sole owner has no effect on the transaction and thus the contract is still binding on the Personal Representatives (PRs), who are contractually bound to complete on the completion date. The property now passes to Jennifer Brown s estate either by her will or intestacy and we will need to raise enquiries with the seller s solicitors. The PRs need to be appointed by either a grant of representation or by letters of administration to enable legal title in the property to be conveyed to our client. The appointment will cause a delay to the transaction as the shortest time scales for obtaining a grant of probate is 7 days after death and for letters of administration 14 days after death, plus the assets of the estate need to be identified and called in and IHT forms completed and inheritance tax paid. It is possible to apply for an expedited grant, which will Page 3 of 11

4 minimise the delay, (and the Probate Registry are likely to be sympathetic to such applications where there is the potential for loss to be caused to the estate as a result of any delay) but even so the grant will not be issued for today. The transfer will need to be redrafted adding the PRs as the transferors and re-signed by all of the parties (which will also cause a delay). As there is a delay between exchange and completion the contract should be registered at the Land Registry as a notice. The buyer is entitled to register an agreed notice under s. 34 LRA 2002 as the Land Registry will be satisfied of the validity of the applicant s claim (i.e. due to the existence of the contract). Thus any purchaser will buy subject to the buyer s interest in the property (i.e. the contract). 3(b) On the facts there is no default by the buyer who appears to be ready, willing and able to complete. Completion should occur on or before 2pm today (SC 6.1.3) otherwise there will be late completion and a breach of contract by the seller. Time is not of the essence for completion and so the seller cannot be compelled to complete today (SC 6.1.1). The Seller will be required to pay compensation/interest to the buyer at the contract rate on the whole of the purchase price (SC 7.2.2). The buyer retains the right to sue for damages, but any claim is to be reduced by any compensation paid. The buyer may also seek the equitable remedy of specific performance once aware of the breach/proposed breach of contract to force the seller s to complete, however there are high costs associated with seeking this remedy and the remedy is discretionary and is unlikely to be granted by the court as the PRs have not been granted and so it is impossible for legal title to pass to the buyer. The buyer can make time of the essence by serving a notice to complete under SC 6.8. This gives the seller 10 working days to complete thereby making time of the essence (SC 6.8.2). If the seller fails to complete, the buyer may rescind the contract, have the deposit repaid and retains other remedies such as suing for damages for breach of contract. 3(c) The buyer can move into occupation of New Street as a licensee - not a tenant/owner (S.C. 5.2). The conditions which apply are: Only the buyer and members of his household can occupy, A daily licence fee is payable (calculated based on the daily contract rate of the purchase price, less the deposit paid. However, under S.C the buyer will be receiving daily compensation of the daily contract rate on the whole of the purchase price per day so our client s compensation would exceed the licence fee), The buyer cannot alter the property, The buyer must insure the property for the purchase price, and The licence can be terminated on 5 working days notice by either party. This makes it fairly risky for the buyer as he could end-up having no property, however he is living with relatives at the moment so could easily move back in with them and the PRs have a duty to preserve the value of the estate and are unlikely to serve such a notice. Page 4 of 11

5 If our client does enter into a licence agreement then SDLT becomes payable within 30 days of the earlier of completion, or the date on which the contract is substantially performed, and entering into possession under a licence constitutes substantial performance. The clear advantage in this instance of moving in under the licence would mean that our client can move into occupation within the next few days. Question 4(a) The pre-completion searches and enquiries including the correct forms and priority periods need to be clearly stated and are: -K16 Bankruptcy search against Robert Dillon. The priority period is 15 working days in which to complete the mortgage. If this expires another search can be performed prior to completing the mortgage. This search is required as the client is purchasing with a mortgage from the Cotswolds and Shires Building Society and the lender will not want to lend to a bankrupt. -0S1 priority search against the property/title number is required as the title is registered. The priority period is 30 working days in which to complete and register the transaction. The applicant for the search will be the Cotswolds and Shires Building Society (i.e. the lender). -The pre-completion enquiry that needs to be raised is the Completion Information and Requisitions on Title form or TA13 form. This is usually sent by the buyer s solicitors to the seller s solicitors for completion and deals with logistics (i.e. arrangements of collection of keys, documents/deeds to be provided on completion) and undertakings in relation to discharge of the existing charge to the Cotswolds and Shires Building Society (refer to entries numbered 2 and 3 of the Charges Register). 4(b) See attached AP1 below. Page 5 of 11

6 If you need more room than is provided for in a panel, and your software allows, you can expand any panel in the form. Alternatively use continuation sheet CS and attach it to this form. Land Registry is unable to give legal advice but our website www1.landregistry.gov.uk provides guidance on Land Registry applications. This includes public guides and practice guides (aimed at conveyancers) that can also be obtained from any Land Registry office. See www1.landregistry.gov.uk/regional if you are unsure which Land Registry office to send this application to. Conveyancer is a term used in this form. It is defined in rule 217A, Land Registration Rules 2003 and includes persons authorised under the Legal Services Act 2007 to provide reserved legal services relating to land registration and includes solicitors and licensed conveyancers. LAND REGISTRY USE ONLY Record of fees paid Particulars of under/over payments Reference number Fees debited Where there is more than one local authority serving an area, enter the one to which council tax or business rates are normally paid. Enter the title number of each title that requires an entry to be made in that register. Place 'X' in the appropriate box. Give a brief description of the part affected, for example edged red on the plan to the transfer dated.. See fees calculator at www1.landregistry.gov.uk/fees 1 Local authority serving the property: Allerdale Borough Council Full postcode of property (if any): CA7 9AL 2 Title number(s) of the property: CU The application affects the whole of the title(s) part of the title(s) as shown: 4 Application, priority and fees Applications in priority order Price paid/value ( ) Transfer 253, Charge 150,000 0 Fees paid ( ) Place 'X' in the appropriate box. The fee will be charged to the account specified in panel 7. Total fees ( ) 270 Fee payment method cheque made payable to 'Land Registry' direct debit, under an agreement with Land Registry Page 6 of 11

7 List the documents lodged with this form. Copy documents should be listed separately. If you supply a certified copy of an original document we will return the original; if a certified copy is not supplied, we may retain the original document and it may be destroyed. 5 Documents lodged with this form: TR1 certified copy TR1 Certified Copy Grant of Probate/Letters of Administration for Jennifer Brown Charge Certified copy Charge SDLT5 Certified copy marriage certificate of Jennifer Brown/Andrews HR4 Provide the full name(s) of the person(s) applying to change the register. Where a conveyancer lodges the application, this must be the name(s) of the client(s), not the conveyancer. Complete as appropriate where the applicant is a company. Also, for an overseas company, unless an arrangement with Land Registry exists, lodge either a certificate in Form 7 in Schedule 3 to the Land Registration Rules 2003 or a certified copy of the constitution in English or Welsh, or other evidence permitted by rule 183 of the Land Registration Rules If you are paying by direct debit, this will be the account charged. This is the address to which we will normally send requisitions and return documents. However if you insert an address, we will use this whenever possible. Complete this panel if you want us to notify someone else that we have completed this application. 6 The applicant: Robert Dillon For UK incorporated companies/llps Registered number of company or limited liability partnership including any prefix: For overseas companies (a) Territory of incorporation: (b) Registered number in the United Kingdom including any prefix: 7 This application is sent to Land Registry by Key number (if applicable): Name: Address or UK DX box number: address: Phone no: 8 Third party notification Name: Address or UK DX box number: address: Fax no: Page 7 of 11

8 Place 'X' in the appropriate box. In this and panel 10, each proprietor may give up to three addresses for service, one of which must be a postal address whether or not in the UK (including the postcode, if any). The others can be any combination of a postal address, a UK DX box number or an electronic address. 9 The address(es) for service for each proprietor of the registered estate(s) to be entered in the register is the address of the property (where this is a single postal address) the address(es) for service from the transfer/assent (for existing proprietors who are remaining in the register) the current address(es) for service in the register the following address(es): Where a charge has an MD reference we will ignore an address given in this panel unless the charge is in favour of a United Kingdom bank and neither the charge form nor any agreement we have with the lender specifies an address for service. For permitted addresses see note to panel 9. Complete as appropriate where the lender is a company. Also, for an overseas company, unless an arrangement with Land Registry exists, lodge either a certificate in Form 7 in Schedule 3 to the Land Registration Rules 2003 or a certified copy of the constitution in English or Welsh, or other evidence permitted by rule 183 of the Land Registration Rules If this statement applies (i) place X in the box and (ii) enclose Form DI. Section 27 of the Land Registration Act 2002 lists the registrable dispositions. Rule 57 of the Land Registration Rules 2003 sets out the disclosable overriding interests that you must tell us about. Full details of the evidence of identity that is required can be found in Practice Guide 67 and in Public Guide Name and address(es) for service of the proprietor of any new charge to be entered in the register: For UK incorporated companies/llps Registered number of company or limited liability partnership including any prefix: For overseas companies (a) Territory of incorporation: (b) Registered number in the United Kingdom including any prefix: 11 Disclosable overriding interests This application relates to a registrable disposition and disclosable overriding interests affect the registered estate. 12 Confirmation of identity When registering transfers, charges, leases and other dispositions of land, or giving effect to a discharge or release of a registered charge, Land Registry relies on the steps that conveyancers take, where appropriate, to verify the identity of their clients. These checks reduce the risk of property fraud. Where a person was not represented by a conveyancer, Land Registry requires evidence of identity in respect of that person, except where the first alternative in panel 13(2) applies. Evidence of identity is evidence provided in accordance with any current direction made by the Chief Land Registrar under section 100(4) of the Land Registration Page 8 of 11

9 Act 2002 for the purpose of confirming a person s identity. Place X in the appropriate box. Conveyancer is defined in rule 217A, Land Registration Rules 2003 and includes persons authorised under the Legal Services Act 2007 to provide reserved legal services relating to land registration and includes solicitors and licensed conveyancers. If this application is to register a transfer, lease or charge, or to give effect to a discharge in Form DS1 or a release in Form DS3 complete one of the following I am a conveyancer, and I have completed panel 13 I am not a conveyancer, and I have completed panel Where the application is sent to Land Registry by a conveyancer (1) Details of conveyancer acting If you are sending an application to register a transfer, lease or charge, for each party to each disposition that is to be registered state in the table below the details of the conveyancer (if any) who represented them. Place X in the box in the second column if the person or firm who is sending the application to Land Registry represented that party in the transaction. Otherwise complete the details in the third column. If the party is not represented insert none in the third column. Where a party is not represented by a conveyancer you must also complete (2) below. Name of transferor, landlord, transferee, tenant, borrower or lender Conveyancer s name, address and reference If you are sending an application to give effect to a discharge in Form DS1 or release in Form DS3 for each lender, state in the table below the details of the conveyancer (if any) who represented them. Place X in the box in the second column if the person or Where a lender is not represented by a conveyancer you must also complete (2) below. Name of lender Conveyancer s name, address and reference Page 9 of 11

10 firm who is sending the application to Land Registry represented that party in the transaction. Otherwise complete the details in the third column. If the party is not represented insert none in the third column. (2) Evidence of identity Place X in the appropriate box(es). Insert the name of each unrepresented transferor, landlord, transferee, tenant, borrower or lender for whom you give this confirmation. Evidence of identity is defined in panel 12. Full details of the evidence of identity that is required can be found in Practice Guide 67. If the party is not represented insert none in the second column. Where any transferor, landlord, transferee, tenant, borrower or lender listed in (1) was not represented by a conveyancer I confirm that I am satisfied that sufficient steps have been taken to verify the identity of and that they are the registered proprietor or have the right to be registered as the registered proprietor I enclose evidence of identity in respect of each unrepresented transferor, landlord, transferee, tenant, borrower or lender for whom I have not provided the confirmation above 14 Where the application is sent to Land Registry by someone who is not a conveyancer (1) Details of conveyancer acting If you are sending an application to register a transfer, lease or charge (ie a mortgage), for each party to each disposition that is to be registered, state in the table below the details of the conveyancer (if any) who represented them. You must also complete (2) below. Name of transferor, landlord, transferee, tenant, borrower or lender Conveyancer s name, address and reference Page 10 of 11

11 If you are sending an application to give effect to a discharge in Form DS1 or release in Form DS3, for each lender state in the table below the details of the conveyancer (if any) who represented them. If the party is not represented insert none in the second column. You must also complete (2) below. Name of lender Conveyancer s name, address and reference Place X in the appropriate box(es). Evidence of identity is defined in panel 12. Full details of the evidence of identity that is required can be found in Public Guide 20. If a conveyancer is acting for the applicant, that conveyancer must sign. If no conveyancer is acting, the applicant (and if the applicant is more than one person then each of them) must sign. 15 (2) Evidence of identity for each applicant named in panel 6 is enclosed for each unrepresented transferor, landlord, transferee, tenant, borrower or lender listed in (1) is enclosed Signature of conveyancer: Date: OR Signature of applicant: Date: WARNING If you dishonestly enter information or make a statement that you know is, or might be, untrue or misleading, and intend by doing so to make a gain for yourself or another person, or to cause loss or the risk of loss to another person, you may commit the offence of fraud under section 1 of the Fraud Act 2006, the maximum penalty for which is 10 years imprisonment or an unlimited fine, or both. Failure to complete this form with proper care may result in a loss of protection under the Land Registration Act 2002 if, as a result, a mistake is made in the register. Under section 66 of the Land Registration Act 2002 most documents (including this form) kept by the registrar relating to an application to the registrar or referred to in the register are open to public inspection and copying. If you believe a document contains prejudicial information, you may apply for that part of the document to be made exempt using Form EX1, under rule 136 of the Land Registration Rules Crown copyright (ref: LR/HO) 10/11 Page 11 of 11

Full postcode of property (if any): SW11 2SN. Title number( s) of the property: TGL The application affects

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