Property Practice FLK Summary

Property Practice FLK Summary

Contents
Freehold Transactions.................................................................................................................1
Planning Permission.................................................................................................................... 3
Investigation of Title..................................................................................................................... 4
Pre-Contract searches.................................................................................................................6
Exchange of Contracts:................................................................................................................7
Completion................................................................................................................................... 8
Leases......................................................................................................................................... 9
Breaching Lease Covenants......................................................................................................10
Lease Termination..................................................................................................................... 11
Underlease................................................................................................................................ 13
Assignment................................................................................................................................ 13


Freehold Transactions

Transaction Overview:
● Parties not bound until exchange of contracts
● Caveat emptor - no seller duty to disclose information but cannot mislead the buyer,
onus is on the buyer to make enquiries
Stages of transaction:
● Pre-contract:
○ Sellers solicitor:
■ Takes instructions
■ Investigates title and produces evidence of title to buyer
■ Responds to buyer’s enquiries
■ Drafts contract and obtains client signature
○ Buyers solicitor:
■ Takes instructions and investigates title
■ Raises pre-contract searches
■ Approves draft contract
■ Obtains client signature
○ Exchange of contracts
● Pre completion:
○ Sellers solicitor:
■ Approves draft transfer deed
■ Replies to pre-contract enquiries
■ Provides an undertaking to discharge seller’s mortgage
○ Buyers solicitor:
■ Drafts transfer deed and mortgage deed
■ Raises any pre-completion enquiries
○ Complete


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, ● Post-completion:
○ Sellers solicitor:
■ Discharges seller’s mortgage
○ Buyers solicitor:
■ Pay SDLT/LTT and register as new owner of title
Solicitor Ethical considerations:
● Substantially common interest exception does not apply and cannot act for both buyer
and seller - too much risk of conflict
● Can act for joint buyers but should advise independent legal advice regarding how they
hold their equitable interests in the property if held unequally or one person contributes
more money
● Can act for borrower and lender if no risk of conflict e.g. standard mortgage terms
● Contract races - multiple buyers competing to exchange, seller’s solicitor has a duty not
to mislead and must inform the potential buyers of this and if seller objects, cease to act
retaining duty of confidentiality
Mortgages types:
● Repayment mortgage: monthly payments to repay loan and interest, repay full sum at
the end of the term
● Interest-only mortgage: only pay monthly interest payments, at end of the term, still owe
the full sum
SDLT:
● Paid by the buyer within 14 days of completion on an SDLT1 form to HMRC
● Is inclusive of land and fixtures but not chattels
● Paid on VAT inclusive sum if VAT is charged
● First-time residential buyer relief:
○ Occupied as main residence and price does not exceed £625k
○ Under £425k - 0%
○ £425k to £625k - 5%
● Standard residential buyer:
○ £250k - 0%
○ £250k - £950k - 5%
○ £950k - £1.5m - 10%
○ Remainder - 12%
● Non-residential buyer:
○ £150k - 0%
○ £150k - £250k - 2%
○ Over £250% - 5%
LTT:
● Paid within 30 days of completion
● Residential freehold:
○ £225k - 0%
○ £225k - £400k - 6%
○ £400k - £750k - 7.5%
○ £750k - £1m - 10%



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