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Chapter 4 – Completion, Post Completion and Remedies SGS 4 – Completion and RemediesBuyer’s Pre-Completion Checklist
Draft the transfer deed (form TR1)
Submit the Completion Information and Undertakings Form (form TA13)
Obtain finance
Submit pre-completion searches
Transfer Buyer’s solicitor drafts the transfer (a purchase deed) after exchange
Buyer’s solicitor sends draft transfer to seller for approval (SCPC 7.3.2)
Transfer must be in a form of a deed (LPA, s.52)
Form of transfer used for registered land –
Form TR1 used for whole of registered title (may be used for unregistered title as well)
Form TP1 used for part of registered title
Form TR5 used for a portfolio of registered title
Form TA13 Sent by buyer’s to seller’s solicitor requesting information and dealing with undertakings before completion
Format is either Law Society’s Transaction form TA13 or an in-house version
Information requested in a form TA13 includes –
1. An undertaking that all outstanding mortgages will be redeemed by the seller on completion
2. Seller’s completion statement setting out the balance of funds required from the buyer to complete
3. Bank details of the seller’s solicitors
4. Information on the collection of keys and delivery of title deeds to buyer’s solicitor
5. Whether there have been any changes in the information given prior to the exchange by the seller
Finance A completion statement comprises of total cost of the transaction and method of calculation, usually –
Sale price plus price of chattels
Less deposit paid at exchange
Plus (or less) any apportionments (e.g. insurance premiums, rent, etc.)
Buyer’s solicitor will send buyer a financial statement, demonstrating total sum due and method of calculation
Commercial buyers may –
Have internal accounting procedures to follow before funds can be obtained
May require notice to withdraw to the bank in order to obtain funds
Buyer’s solicitor must –
Have received cleared funds in the client account by the day of completion (NB: cheque needs to be
received a number of days before completion)
Provide final, signed certificate of title (CLLS Certificate) to lender’s solicitor before completion
Contact lender to ensure money will arrive in good time for the day of completion
Professional conduct
Solicitors must act in the best interest of each client (CCS, Principle 7)
Solicitors must not act if there is (or a significant risk of) client conflict (CCS, 6.2)
Typical conflict of interest in conveyance –
Lender and borrower
Buyer and seller (including tenant and assignee of a lease)
Landlord and tenant (including underletting)
Buyer and non-owning occupier
NB: solicitors will not usually act for lender and borrower in commercial transactions (unlike residential)
Pre-completion Registered land
searches 1. Land Registry priority search (form OS1)
(a) Check for new entries on registers since search from date of OC’s at deducing title, like –
(i) New mortgages or charges entered by the seller (NB: most common)
(ii) New covenants (positive or negative) benefiting or burdening the property
(iii) New easements benefitting or burdening the property
(iv) Any deed of variation of an existing easement
o NB: seller should already have disclosed any of the above adverse issues (SCPC 4.1.3), if not
the buyer is entitled to damages for breach and/or misrepresentation or even rescission
(b) Provide searcher with a priority period of 30 working days
o Made in the name of the lender (confers protection to lender and borrower)
o OS1 application will take priority over any other application during priority period
o Application to register the purchase must be made within the priority period
2. Solvency searches on buyer (by the lender’s solicitor)
, Chapter 4 – Completion, Post Completion and Remedies SGS 4 – Completion and Remedies
o Buyer is a company – a company search at Companies House
o Buyer is an individual – a bankruptcy search form K16 at Central Land Charges Department
3. Solvency searches on seller
o Seller is a company – a company search, to reveal floating charges and pending insolvencies
o Seller is an individual – no requirement for bankruptcy search
Unregistered land
1. Central Land Charges (CLC) searches on form K15 against seller and all previous known owners
2. Protection period of 15 working days from date of search provided
3. Seller is a company – company search on Companies House
4. Seller is an individual – CLC searches should reveal bankruptcy of any individual seller
5. Complete the purchase within protection period
Seller’s Pre-Completion Checklist
Reply to Completion Information and Undertakings Form (form TA13)
Prepare completion statement for buyer’s solicitor
Request a redemption statement from lender
Agree form of transfer deed (form TR1)
TA13 Seller’s solicitor must reply to ‘written requisitions’ within 4 working days after receipt (SCPC 7.3.1)
Finance Seller’s solicitor will prepare a completion statement for the buyer’s solicitor
Seller’s solicitor will also send the seller a financial statement
Redemption Redemption figure is the amount required by the lender to redeem the seller’s mortgage
Ensure redemption figure is less than sale proceeds
Seller’s solicitor must obtain extra funds from seller prior to completion in a ‘negative equity’ situation
Seller’s solicitor will then provide an undertaking to discharge the mortgage on completion
Form TR1 Drafting Checklist
Use correct numbering
Use the defined terms consistently
Comply with client’s instructions
Make clauses easier for client to comply with (while still being commercially reasonable)
Use active voice
Panel 1 Registered property – insert title number
Unregistered property – leave blank
Panel 2 Insert full address and postcode
Panel 3 Leave blank – date to be inserted on completion
Panel 4 Insert full name of seller –
‘Elton Hall Agricultural College Limited formerly known as Elton Country Holdings Limited’
Insert company number of seller (if appropriate)
Panel 5 Insert full name of buyer
Insert company number of buyer (if appropriate)
Panel 6 Insert buyer’s full registered office address and postcode
Panel 8 Check the first box
Insert purchase price (including deposit, excluding VAT) in words and figures –
‘Five million pounds (£5,000,000.00)’
Panel 9 Check ‘full title guarantee’
Panel 10 Leave blank unless buyers are joint owners – if so, check the appropriate box
Panel 11 Insert the following provisions as necessary –
Where the buyer is the give an indemnity covenant to the seller (SCPC 7.6.5)
‘[11.1] The Transferee covenants with the Transferor to observe and perform the covenants
contained or referred to in entry number [1] in the Charges Register of title number [BM302735] and
to indemnify the Transferor against any liability for any future breach or non observance of the
covenants.’
To exclude third-party rights
‘[11.2] A person who is not a party to this transfer will not have any rights under or in connection with
it by virtue of the Contracts (Rights of Third Parties) Act 1999.’
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