, Property Practice:
Unit 1 - Due Diligence:
Freehold Property Transactions:
Caveat emptor = buyer beware → the seller is not obliged to disclose information about the
property, other than about limited matters of title (so not liable for any defects in property)
Stages of a Transaction:
Pre-Contract Stage:
Seller’s Solicitor:
● Must take instructions from the seller client
● Must investigate title and produce evidence of title to the buyer
● Must reply to the buyer’s pre-contract enquiries
- Any incorrect information provided by the seller can give rise to misrepresentation
● Must draft the contract
Both Solicitors:
● Check for conflicts of interest
● Obtain client signature to the contract
Buyer’s Solicitor:
● Take instructions from the buyer client
● Investigate title
● Raise pre-contract searches and enquiries
, - May also want to carry out additional enquiries about things such as boundaries, access,
disputes, outgoings and previous work carried out at the property
- Will also carry out pre-contract searches of statutory, public and private bodies to obtain
more information about the property
● Approve draft contract
● Prepare pre-exchange report to client
Exchange of Contracts:
● Exchange of contracts = not compulsory, but it fixes the completion date and gives the buyer
time between exchange and completion to make their final preparations
● The contracts record the agreed terms → parties are not bound to the transaction until contracts
are exchanged
● Exchange of contracts and completion can take place simultaneously
● Buyer will usually pay a deposit (typically 10% of the purchase price)
The pre-completion stage:
● The time in between exchange and completion
● Time to make sure that all the correct documentation and completion money is available
● Transfer deed will need to be prepared and executed
Seller’s solicitors:
● Approve the draft transfer deed
● Reply to the buyer’s pre-completion enquiries, including giving an undertaking to discharge
seller’s mortgage
Buyer’s solicitors:
● Draft the transfer deed and mortgage deed (if acting for the lender)
● Raise pre-completion searches and enquiries (e.g. checking buyer’s solvency)
● Submit report on title / certificate of title to lender and request mortgage advance
, Completion:
● Completion = the stage when the bulk of the purchase money is paid to the seller and the transfer
deed is completed to transfer the property to the buyer
Post-Completion:
Both sides must finalise the administrative matters
Seller’s solicitor:
● Seller’s solicitor must ensure that any mortgage the seller had is paid off and removed from the
title
Buyer’s solicitor:
● Buyer’s solicitor must ensure that Stamp Duty Land Tax is paid on the transfer
● Buyer’s solicitor must register their client as the new owner of the property and register any new
mortgage over the land
Professional Conduct:
Acting for seller and buyer:
Acting for buyer and seller is governed by paragraph 6.2 in The Code of Conduct →
● Subject to certain exceptions, a solicitor cannot act for both parties if there is (or there is a
significant risk) of a conflict of interest
● There is a high risk where the land is being transferred for value
○ Exception = where the parties have a substantially common interest in relation to the
matter (a common interest does not apply to a property purchase)
○ Exception = competing for the same objective → so could act for two buyers who are
competing against each other to buy a property (but not for a seller & buyer)
Unit 1 - Due Diligence:
Freehold Property Transactions:
Caveat emptor = buyer beware → the seller is not obliged to disclose information about the
property, other than about limited matters of title (so not liable for any defects in property)
Stages of a Transaction:
Pre-Contract Stage:
Seller’s Solicitor:
● Must take instructions from the seller client
● Must investigate title and produce evidence of title to the buyer
● Must reply to the buyer’s pre-contract enquiries
- Any incorrect information provided by the seller can give rise to misrepresentation
● Must draft the contract
Both Solicitors:
● Check for conflicts of interest
● Obtain client signature to the contract
Buyer’s Solicitor:
● Take instructions from the buyer client
● Investigate title
● Raise pre-contract searches and enquiries
, - May also want to carry out additional enquiries about things such as boundaries, access,
disputes, outgoings and previous work carried out at the property
- Will also carry out pre-contract searches of statutory, public and private bodies to obtain
more information about the property
● Approve draft contract
● Prepare pre-exchange report to client
Exchange of Contracts:
● Exchange of contracts = not compulsory, but it fixes the completion date and gives the buyer
time between exchange and completion to make their final preparations
● The contracts record the agreed terms → parties are not bound to the transaction until contracts
are exchanged
● Exchange of contracts and completion can take place simultaneously
● Buyer will usually pay a deposit (typically 10% of the purchase price)
The pre-completion stage:
● The time in between exchange and completion
● Time to make sure that all the correct documentation and completion money is available
● Transfer deed will need to be prepared and executed
Seller’s solicitors:
● Approve the draft transfer deed
● Reply to the buyer’s pre-completion enquiries, including giving an undertaking to discharge
seller’s mortgage
Buyer’s solicitors:
● Draft the transfer deed and mortgage deed (if acting for the lender)
● Raise pre-completion searches and enquiries (e.g. checking buyer’s solvency)
● Submit report on title / certificate of title to lender and request mortgage advance
, Completion:
● Completion = the stage when the bulk of the purchase money is paid to the seller and the transfer
deed is completed to transfer the property to the buyer
Post-Completion:
Both sides must finalise the administrative matters
Seller’s solicitor:
● Seller’s solicitor must ensure that any mortgage the seller had is paid off and removed from the
title
Buyer’s solicitor:
● Buyer’s solicitor must ensure that Stamp Duty Land Tax is paid on the transfer
● Buyer’s solicitor must register their client as the new owner of the property and register any new
mortgage over the land
Professional Conduct:
Acting for seller and buyer:
Acting for buyer and seller is governed by paragraph 6.2 in The Code of Conduct →
● Subject to certain exceptions, a solicitor cannot act for both parties if there is (or there is a
significant risk) of a conflict of interest
● There is a high risk where the land is being transferred for value
○ Exception = where the parties have a substantially common interest in relation to the
matter (a common interest does not apply to a property purchase)
○ Exception = competing for the same objective → so could act for two buyers who are
competing against each other to buy a property (but not for a seller & buyer)
