Always Apply to the Facts, and Give Advice/Conclude
2020-2021
LPC Exam Ready Notes
[Real Estate]
1
, Always Apply to the Facts, and Give Advice/Conclude
‘The Big Picture’
TRANSFER OF FREEHOLD
Seller Both Buyer
Take instructions
Parties agree terms (subject to
contract)
Prepares pre-contract pack -Investigates title
(includes: draft contract, title -Obtains surveys
evidence & sometimes results of -Does (pre-contract) searches and
some pre-contract searches & enquiries
enquiries the seller has done) -Approves draft contract
Parties exchange contracts Pays deposit (typically 10%)
(legally binding)
-Drafts transfer deed
-Does pre-comp searches
Parties complete Pays balance
-Pay SDLT
-Register at Land Registry
END OF TRANSACTION
GRANT OF LEASE
Seller Landlord Both Buyer Tenant
Take instructions
Supply Energy Performance Commission Survey
Certificate (EPC)
Draft Lease -Do (pre-contract) searches and
enquiries
-Investigate title to freehold
reversion (if FH = Absolute, the LH
will be as well)
Send Draft Lease and deduce title
to Tenant’s Solicitor
Investigate title and raise
requisitions on title
Consider and amend draft lease
Reply to enquiries and
requisitions on title
Consider tenant’s amendments
and return second draft
Obtain lender’s consent to the
grant of the lease (if applicable)
Approve second draft of lease
Engross lease and counterpart Check engrossed counterpart
Get lease executed by landlord Get counterpart executed by
client tenant client
Do pre-completion searches
Complete lease Pay apportioned rent for quarter
Pay SDLT
Register lease at LR if 7+ years
(AP1 or FR1)
END OF TRANSACTION
ASSIGNMENT OF LEASE
2
, Always Apply to the Facts, and Give Advice/Conclude
Seller Assignor Both Buyer Assignee
Take instructions
Investigate title (both according
to MCQ)
Prepare the draft contract
Prepare pre-contract package
(includes: draft contract, copy lease,
evidence of title, licence to assign
(from LL), copy of LL reversionary
title, insurance policy re: the property
and last premium due, receipts for
last payment of rent and service
charge, details of the management
company (if one exists)
Apply for LL’s consent to the Raise pre-contract searches and
assignment (LL prepares this enquiries
document, costs paid for by way
of undertaking by Assignor’s sols)
Investigate title (leasehold and
LL’s reversionary title
Approve draft contract
Exchange contracts
Prepare the purchase deed (TR1)
Approve the engrossment of the Raise pre-completion searches
purchase deed (TR1) (including searches against LL’s
reversionary title and any
management company)
Prepare for completion (including Prepare for completion
preparation of a completion
statement)
Completion of the Licence to
Assign (done by LL, but both
parties contribute)
Complete
Comply with undertaking given on -Pay SDLT
completion re: LL Licence to -Register title (where lease is
Assign already registered or has over 7
years remaining
DEFAULT, LEASE EXPIRY OR TERMINATION OF LEASE
3
, Always Apply to the Facts, and Give Advice/Conclude
Professional Conduct Questions
When answering a professional conduct question:
1) Outline the issue (conflicts of interest, confidentiality, duty to the court, etc)
2) Reference the Principles
3) Reference the Outcomes
4) Reference the Indicative Behaviours
5) Apply to the facts
6) Advise on how to act
Acting for Both Buyer and Seller
Step 1: General You cannot act where there is a client conflict, or a significant risk of one (Outcome
rule 3.5) as you owe a duty to act in the best interests of each client (Principle 4)
Step 2: Is there Circumstances indicating a client conflict (or significant risk of one) include
a conflict or a (Outcome 3.3):
significant risk o Do the clients have different interests (IB3.11)?
of one? o Is the client vulnerable?
o Is there an imbalance of bargaining powers (IB3.4)?
o Is there a need to negotiate terms between clients?
You should not act where matters of substance are being
negotiated (IB3.3)
o Will the solicitor be able to give independent advice?
Even if there is a conflict of interest, or a significant risk of one, you might be able to act
if one of the two following exceptions apply
where the clients have a ‘substantially common interest’ (Outcome 3.6)
Where the clients are ‘competing for the same objective’ (Outcome 3.7)
o State that Outcome 3.7 cannot be used here as buyer and seller are
never in direct competition
Step 3: This may apply, even if there is a conflict, if (Outcome 3.6):
‘Substantially You have explained the facts and feel they have understood them
common All clients have given informed consent in writing
interest’ It is reasonable to act for all clients
exception The benefits outweigh the risks
This might apply in circumstances where: the property is being gifted, or the purchase is
on a developer’s standard terms. However, be careful of:
An imbalance of bargaining power which might undermine the common
interest (IB3.4 & IB3.12); or
If both parties want the best price for themselves and negotiation is necessary
(IB3.3)
Step 4: Ultimately, it’s the solicitor’s decision, however:
Conclude Generally, you should not act for both sides of a land transaction (IB3.14)
Often the best bet is not to act for both sides, but to choose the side with which
you have a better/longer relationship.
Acting for the Borrower (Buyer) and Lender
Step 1: General A duty is owed to both clients (Mortgage Express Limited). But you may act for both
rule Borrower (Buyer) and Lender unless there is a conflict of interest or a significant risk of
one arising.
4
, Always Apply to the Facts, and Give Advice/Conclude
Step 2: Is there You cannot act where there is a client conflict, or a significant risk of one (Outcome
a conflict of 3.5) as you owe a duty to act in the best interests of each client (Principle 4)
interest or a o Mortgage terms will probably be negotiable (IB3.3) and both parties will
significant risk want more favourable terms for themselves (Outcome 3.3(a))
of one?
Even if there is a conflict of interest, or a significant risk of one, you might be able to act
if one of the two following exceptions apply
where the clients have a ‘substantially common interest’ (Outcome 3.6)
Where the clients are ‘competing for the same objective’ (Outcome 3.7)
o State that Outcome 3.7 cannot be used here as buyer and seller are
never in direct competition
Step 3: Step 3: This is applicable as both Borrower (Buyer) and Lender will want the Borrower to
‘Substantially obtain good title to the property and ensure that it doesn’t have problems which
common may decrease its value
interest’ Therefore Outcome 3.6 may apply, allowing you to act for both clients if:
exception o You have explained the facts and feel they have understood them
o All clients have given informed consent in writing
o It is reasonable to act for all clients
o The benefits outweigh the risks
Step 4: Residential property
Conclude o Fine if done on standard mortgage terms (IB3.7) which are:
Provided in the normal course of a lender’s activities
Where a significant part of those activities is lending
Material terms are not negotiated by parties
Commercial property
o Mortgage terms are usually negotiated, and so separate representation is
required (IB3.3)
Step 5: What if Examples include:
conflicts arise Where the terms of the mortgage are obviously unfair to the borrower,
during the indicating an imbalance of bargaining powers (IB3.4)
transactions Where a solicitor suspects a borrower is committing fraud
Buyer or seller are unable to comply with lenders terms
You must either immediately decline to act for both Borrower (Buyer) and Lender or
continue to act for only one, with the other’s consent.
In either case, you must not reveal the nature of the conflict (Halifax Mortgage
Services)
Contract Race
Definition Contract races are where the seller enters the conveyancing process with two or more
prospective buyers at the same time. The winner is the buyer who is ready to exchange
contracts first.
Contract races are risky for buyers, because of abortive costs which are lost if
they lose
Acting for the When acting for the Seller in a contract race, you must immediately inform all buyers of
Seller the Seller’s intention to deal with more than one buyer (Outcome 11.3)
You must let your client know you intend to do this, else you’ll breach your duty
of confidentiality to them (Outcome 4.1)
o If your client refuses to allow you to do so then you may not tell the
Buyers anything, and you must decline to act for the Seller
5
2020-2021
LPC Exam Ready Notes
[Real Estate]
1
, Always Apply to the Facts, and Give Advice/Conclude
‘The Big Picture’
TRANSFER OF FREEHOLD
Seller Both Buyer
Take instructions
Parties agree terms (subject to
contract)
Prepares pre-contract pack -Investigates title
(includes: draft contract, title -Obtains surveys
evidence & sometimes results of -Does (pre-contract) searches and
some pre-contract searches & enquiries
enquiries the seller has done) -Approves draft contract
Parties exchange contracts Pays deposit (typically 10%)
(legally binding)
-Drafts transfer deed
-Does pre-comp searches
Parties complete Pays balance
-Pay SDLT
-Register at Land Registry
END OF TRANSACTION
GRANT OF LEASE
Seller Landlord Both Buyer Tenant
Take instructions
Supply Energy Performance Commission Survey
Certificate (EPC)
Draft Lease -Do (pre-contract) searches and
enquiries
-Investigate title to freehold
reversion (if FH = Absolute, the LH
will be as well)
Send Draft Lease and deduce title
to Tenant’s Solicitor
Investigate title and raise
requisitions on title
Consider and amend draft lease
Reply to enquiries and
requisitions on title
Consider tenant’s amendments
and return second draft
Obtain lender’s consent to the
grant of the lease (if applicable)
Approve second draft of lease
Engross lease and counterpart Check engrossed counterpart
Get lease executed by landlord Get counterpart executed by
client tenant client
Do pre-completion searches
Complete lease Pay apportioned rent for quarter
Pay SDLT
Register lease at LR if 7+ years
(AP1 or FR1)
END OF TRANSACTION
ASSIGNMENT OF LEASE
2
, Always Apply to the Facts, and Give Advice/Conclude
Seller Assignor Both Buyer Assignee
Take instructions
Investigate title (both according
to MCQ)
Prepare the draft contract
Prepare pre-contract package
(includes: draft contract, copy lease,
evidence of title, licence to assign
(from LL), copy of LL reversionary
title, insurance policy re: the property
and last premium due, receipts for
last payment of rent and service
charge, details of the management
company (if one exists)
Apply for LL’s consent to the Raise pre-contract searches and
assignment (LL prepares this enquiries
document, costs paid for by way
of undertaking by Assignor’s sols)
Investigate title (leasehold and
LL’s reversionary title
Approve draft contract
Exchange contracts
Prepare the purchase deed (TR1)
Approve the engrossment of the Raise pre-completion searches
purchase deed (TR1) (including searches against LL’s
reversionary title and any
management company)
Prepare for completion (including Prepare for completion
preparation of a completion
statement)
Completion of the Licence to
Assign (done by LL, but both
parties contribute)
Complete
Comply with undertaking given on -Pay SDLT
completion re: LL Licence to -Register title (where lease is
Assign already registered or has over 7
years remaining
DEFAULT, LEASE EXPIRY OR TERMINATION OF LEASE
3
, Always Apply to the Facts, and Give Advice/Conclude
Professional Conduct Questions
When answering a professional conduct question:
1) Outline the issue (conflicts of interest, confidentiality, duty to the court, etc)
2) Reference the Principles
3) Reference the Outcomes
4) Reference the Indicative Behaviours
5) Apply to the facts
6) Advise on how to act
Acting for Both Buyer and Seller
Step 1: General You cannot act where there is a client conflict, or a significant risk of one (Outcome
rule 3.5) as you owe a duty to act in the best interests of each client (Principle 4)
Step 2: Is there Circumstances indicating a client conflict (or significant risk of one) include
a conflict or a (Outcome 3.3):
significant risk o Do the clients have different interests (IB3.11)?
of one? o Is the client vulnerable?
o Is there an imbalance of bargaining powers (IB3.4)?
o Is there a need to negotiate terms between clients?
You should not act where matters of substance are being
negotiated (IB3.3)
o Will the solicitor be able to give independent advice?
Even if there is a conflict of interest, or a significant risk of one, you might be able to act
if one of the two following exceptions apply
where the clients have a ‘substantially common interest’ (Outcome 3.6)
Where the clients are ‘competing for the same objective’ (Outcome 3.7)
o State that Outcome 3.7 cannot be used here as buyer and seller are
never in direct competition
Step 3: This may apply, even if there is a conflict, if (Outcome 3.6):
‘Substantially You have explained the facts and feel they have understood them
common All clients have given informed consent in writing
interest’ It is reasonable to act for all clients
exception The benefits outweigh the risks
This might apply in circumstances where: the property is being gifted, or the purchase is
on a developer’s standard terms. However, be careful of:
An imbalance of bargaining power which might undermine the common
interest (IB3.4 & IB3.12); or
If both parties want the best price for themselves and negotiation is necessary
(IB3.3)
Step 4: Ultimately, it’s the solicitor’s decision, however:
Conclude Generally, you should not act for both sides of a land transaction (IB3.14)
Often the best bet is not to act for both sides, but to choose the side with which
you have a better/longer relationship.
Acting for the Borrower (Buyer) and Lender
Step 1: General A duty is owed to both clients (Mortgage Express Limited). But you may act for both
rule Borrower (Buyer) and Lender unless there is a conflict of interest or a significant risk of
one arising.
4
, Always Apply to the Facts, and Give Advice/Conclude
Step 2: Is there You cannot act where there is a client conflict, or a significant risk of one (Outcome
a conflict of 3.5) as you owe a duty to act in the best interests of each client (Principle 4)
interest or a o Mortgage terms will probably be negotiable (IB3.3) and both parties will
significant risk want more favourable terms for themselves (Outcome 3.3(a))
of one?
Even if there is a conflict of interest, or a significant risk of one, you might be able to act
if one of the two following exceptions apply
where the clients have a ‘substantially common interest’ (Outcome 3.6)
Where the clients are ‘competing for the same objective’ (Outcome 3.7)
o State that Outcome 3.7 cannot be used here as buyer and seller are
never in direct competition
Step 3: Step 3: This is applicable as both Borrower (Buyer) and Lender will want the Borrower to
‘Substantially obtain good title to the property and ensure that it doesn’t have problems which
common may decrease its value
interest’ Therefore Outcome 3.6 may apply, allowing you to act for both clients if:
exception o You have explained the facts and feel they have understood them
o All clients have given informed consent in writing
o It is reasonable to act for all clients
o The benefits outweigh the risks
Step 4: Residential property
Conclude o Fine if done on standard mortgage terms (IB3.7) which are:
Provided in the normal course of a lender’s activities
Where a significant part of those activities is lending
Material terms are not negotiated by parties
Commercial property
o Mortgage terms are usually negotiated, and so separate representation is
required (IB3.3)
Step 5: What if Examples include:
conflicts arise Where the terms of the mortgage are obviously unfair to the borrower,
during the indicating an imbalance of bargaining powers (IB3.4)
transactions Where a solicitor suspects a borrower is committing fraud
Buyer or seller are unable to comply with lenders terms
You must either immediately decline to act for both Borrower (Buyer) and Lender or
continue to act for only one, with the other’s consent.
In either case, you must not reveal the nature of the conflict (Halifax Mortgage
Services)
Contract Race
Definition Contract races are where the seller enters the conveyancing process with two or more
prospective buyers at the same time. The winner is the buyer who is ready to exchange
contracts first.
Contract races are risky for buyers, because of abortive costs which are lost if
they lose
Acting for the When acting for the Seller in a contract race, you must immediately inform all buyers of
Seller the Seller’s intention to deal with more than one buyer (Outcome 11.3)
You must let your client know you intend to do this, else you’ll breach your duty
of confidentiality to them (Outcome 4.1)
o If your client refuses to allow you to do so then you may not tell the
Buyers anything, and you must decline to act for the Seller
5
