Land/Property
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94 Terms
What is the deemed date of disposal for CGT purposes?
Date of exchange of contracts
This is because it is when the transaction becomes binding and beneficial interest has passed to the buyer.
What is the annual exemption for CGT?
£3,000
When must SDLT be paid?
Within 14 days of completion
What is the threshold for SDLT?
Residential - no SDLT is payable up to £250,000
Commercial / mixed use - no SDLT is payable up to £150,000
What is the first time buyer discount for SDLT?
· No SDLT for first 425,000
· 5% on any part over the 425,000
Up to max purchase price of £625,000
What is the SDLT charge for second property?
an additional SDLT is charged at 3% on top of the whole purchase price.
What is the threshold for LTT on residential and commercial properties?
· Up to 225,000 = no LTT
How is a deposit held under the standard conditions?
Deposit = held as stakeholder
Except where seller agrees to buy another property in England and Wales for their residence - in this case seller can use all or deposit as part of their purchase
When is limited title guarantee given?
When the owner/seller is a PR or a trustee
no incumbrances have been created over the property during the sellers period of ownership
When is no title guarantee given?
When the seller has little to no knowledge of the property e.g. they were gifted it
Under the standard conditions can a buyer move in before completion?
It is for the seller to decide.
The Standard Conditions provide that such occupation will be permitted on the basis that the buyer is a licensee not a tenant
What are the time limits for the law society standard form contract?
Draft deed must be submitted at least 12 working days before the completion date;
Sellers sol has 4 working days to approve deed
Buyers sol send out the engrossment at least 5 working days before completion.
If the period between exchange and completion is less than 15 working days, the time limits are reduced pro rata.
What is the normal compensation rate for failure to complete on time in a standard residential contract?
Law society interest rate from time to time
Normally - 4% above the base rate of a specified high street bank.
When is completion if not specified in the contract for standard residential?
completion is due on the 20th working day after exchange.
If 2 executors are selling a property do they both need to sign the contract?
No, one executor can provided they have permission from the other to do so
What is an energy performance certificate EPC?
It contains recommendations about how to reduce energy use and is rated A to G
What does a local search reveal?
LLC1 - local land charges (e.g., tree preservation orders and smoke control orders)
CON29 - replies on records e.g. planning and building regs, rights of way
What is the time limit for bringing a claim against breach of building regs in england?
local authority - unlimited time
10 years after completion to serve an enforcement notice - gives landowner 28 days to alter or remove work (failure to do so means LA can undertake work at landowners expense)
What is the time limit for planning enforcement?
Post 25 April 2024 - Limitation period of planning enforcement is 10 years
What were the enforcement time limits for planning permission pre 25 April 2024
4 years for building works from date of substantial completion or change of use to single dwelling
10 years for other changes or breach of planning condition
if a buyer wants to protect their beneficial interest in a trust of land and they are not a legal owner what can they do?
Register a restriction
What is law society formula B
Both seller and buyer send their parts of the contract to the other the same day by first class post, DX or hand delivery
Buyers solicitor is to send the deposit in the form specified in the contract
Lease formalities
3 years or less - can be created orally as long as it
takes effect immediately
no premium payable
market rent
7 years or less - deed but not registered - can be noted on register if wish and over 3 years
Over 7 years - deed and registration
Wheeldon v Burrows
An implied easement can arise where:
(a) one person owned and occupied the whole of the land
(b) the owner previously exercised a quasi-easement over the land;
(c) the right is continuous and apparent (i.e. obvious);
(d) the right is necessary for the reasonable enjoyment of the land;
What is private residence relief?
It is a relief from Capital Gains Tax for individuals:
only or main residence
no part has been used exclusively for business purposes
max up to 5,000 square meters, if more then that over 5,000 will be subject to CGT
When is completion in a property transaction?
Parties are free to negotiate.
If not stipulated in contract, Standard Condition 6.1.1 provides completion is the 20th working day after exchange.
What does standard condition of sale (residential) special condition 6 provide in relation to representations?
Either party may rely upon any representations made by the other, provided these were made in writing.
Where do indemnity covenants appear?
In the proprietorship register in respect of covenants referred to in the charges register.
What is required for a right to be capable of being an easement
Ellenborough Park
Dominant and servient land
Accommodate dominant land
Different owners
Right must be capable of being an easement
Absence of 3 P’s - permission, exclusive possession, payment
Implied or express - legal or equitable
What are the ‘standard’ property searches?
“Local search” – enquiries of the local authority (CON29) and search of the local land charges (LLC1)
Drainage and water enquiries
Desktop environmental search
Chancel repair liability
Pre 1 January 1996 lease - benefit and burden of the leasehold estate
Original tenant and landlord remain liable because of privity of contract.
Privity of estate - allows original and any new landlord to enforce covenant against a new tenant if it ‘touches and concerns’ the land
What is an overriding interest?
An interest in land and actual occupation
Actual occupation won’t apply if
the buyer asked or
it was not reasonably obvious on inspection AND the buyer didn’t know.
What are the formalities for a restrictive covenant
In writing and signed by grantor
Implied Grant - grant by necessity
If land is completely landlocked without the easement being granted
Implied Grant - Grant by common intention
Dominant land must be sold or leased for a specific purpose, known to both parties and the easement is essential to the purpose
What does s62 LPA do?
Transfers the benefit of an easement to the new owner of a piece of land when the land is sold
· Only works for a legal lease or legal transfer – not equitable
· Extended by case law to create easements
· Upgrade method – an informal permission is upgraded to a full easement on the grant of a new conveyance (legal lease or transfer deed)
· Division of two pieces of land, informal permission and new lease or transfer
What are registrable dispositions?
Legal transfer or charge that needs to be completed by registration to be valid and enforceable
transfer of freehold
transfer of leasehold
legal easement
legal mortgage
What are the triggers for compulsory first registration
sale of unregistered freehold
sale of unregistered lease with more than 7 years to run
grant of 7+ year lease
creation of legal mortgage
What are overriding interests?
Legal leases of 7 years or less
Implied legal easements if known to purchaser or obvious on inspection or been used at least 1 year prior
Interest in land with actual occupation - permanence and continuity
What is overreaching?
paying purchase money to two trustees of a beneficial interest in land to take it free of interests
Who do legal interests bind in unregistered land?
Bind the world
except second legal mortgage puisne which needs protecting
How must equitable interests in unregistered land be protected?
Register land charge against grantor
Pre 1926 restrictive covenants and equitable easements are binding without land charge
How does the original covenantee enforce the covenant against an original covenantor?
Sue under the contract
What is the effect of undue influence on a mortgage?
it is voidable and cannot be enforced
Actual undue influence - clear evidence
Presumed undue influence - relationship of trust or confidence
What enforcement rights does bank have if borrower defaults on mortgage?
right to sell
right to possess
foreclosure
sue under contract
appoint receiver
When does the power of sale arise?
As soon as mortgage money becomes due.
Becomes exercisable when:
fail to repay capital for 3 months after notice from lender; or
interest has not been paid for 2 months; or
the borrower has breaches some other term of the mortgage deed
Duty to seek expert advice and to sell for market value.
What is the National Land Information Service (NLIS)?
It provides a single point of enquiry for making pre-contract searches
Who guarantees the accuracy of a local land charges search?
The official search certificate is guaranteed by the local authority as at the date of the local search result.
What does a search using form HR3 do for a lender?
To search the register as to whether any home rights notice has been registered or applied for.
Search result confers a priority period of 15 days
Where is chancel liability noted?
Chancel repairs have to be protected by an entry on the register
What is needed to dispose of a listed building?
The property cannot be sold unless a community interest group is given the opportunity to make a bid for the property
How are rights protected in registered land
legal proprietary = deed and registration
equitable = entry in notice of charges register of burdened land
What is land?
mines and minerals
soil
water
plants and trees
items found on land
buildings
fixtures
airspace to a height that is reasonably necessary
ground below to 300m
What is the limitation period for a debt action against borrower in a mortgage?
Capital = 12 years
Interest = 6 years
What are the equitable rules for burden to pass of covenant?
Restrictive
Accomodate dominant tenement
Intention for burden to run - express or implied will be unless contrary intention
Notice - land charges or notice in charges register
What are the equitable rules for benefit to pass of covenant?
Covenant must touch and concern land
Pass by annexation, assignment or building scheme
What are the common law rules for burden to pass of covenant?
a) Express – in writing, signed by covenantee with notice in writing to original covenantor
b) Implied
touch and concern land
intention to pass
covenantee must have held a legal estate and successor must also hold a legal estate In the land
What are the common law rules for benefit to pass of covenant?
1. Touches and concerns land
2. Passes via:
Annexation – occurs time land is created and can be express or if not statute will imply it unless expressly excluded
Assignment – has to occur each time land is sold
Building Scheme – sale of a number of plots at same time
How can a covenant be discharged?
Automatic if become owner of dominant and servient land
By deed of release
By application to upper tribunal land chamber due to:
change in character
impeding reasonable use
express or implied agreement of owners
will not ijure dominant owners
What are the 4 unities?
Possession - each owner is entitled to posses any part of land
Interest - same nature and duration
Time - interest vests at same time
Title - arises from same doc
What are the factors that defeat a lease?
No intention to create legal relations e.g. family relations
Service occupancy and only live there for better performance of duties as an employee
What is an equitable lease?
May arise where requirements for legal lease have failed as long as there is a document in writing, contains all terms and signed by both parties.
What is the general rule regarding tenant covenants?
Tenant may do all the things the owner can do unless the lease prohibits such actions
What is the commercial rent arrears recovery?
Landlord to serve enforcement notice giving tenant 7 days clear notice that he will seize goods.
Not available for mixed use or residential.
What are the main remedies for breach of a non-rent covenant?
Injunction
Specific performance (rarely granted
Damages
Forfeiture
Does right to forfeiture need to be included in lease?
Legal lease - must be express clause
Equitable lease - doesn’t need to be an express clause because it is implied for non payment of rent
Forfeiture - what is a continuing breach?
If landlord waives right to forfeiture it only lasts until next rent day that the breach continues
e.g. failure to repair
Forfeiture - what is a non-continuing breach?
Once and for all - waiver is permanent.
E.g. subletting without consent and accepting rent from subtenant.
How is forfeiture exercised?
Peaceable re entry (commercial only)
By obtaining a court order (residential)
What is a s146 notice under LPA?
Warns a tenant of landlords intention to exercise right of forfeiture for breach of a non rent covenant
specify breach
allow tenant to remedy within reasonable time - 3 months normally?
if not remedied - peaceable re entry or court order
Options for dealing with covenants
obtain indemnity insurance
approach PWB for consent
apply to upper tribunal to discharge
What are the requirements for good root of title
dated at least 15 years old
deals with legal and beneficial ownership
adequately describes the extent of the land conveyed
who is liable for assignment in an old lease? pre 1 jan 1996
original tenant and original landlord remain liable after assignment
who is liable when a lease is assigned under a new lease post 1 january 1996?
automatic tenant release on assignment but not if in breach of an alienation covenant.
no automatic release for a landlord though if they sell their freehold interest (reversion)
may request tenant enters an AGA so they can have prior tenant on hook
who is responsible for breach of a covenant if a lease is sublet?
the tenant remains liable after
landlord will normally insists on sub tenant directly covenanting with them
What is required to forfeit a lease for non payment of rent?
Express clause in lease
Make a formal demand unless lease expressly waives requirement
Must be at least 6 months in arrears and insufficient distrainable goods on premises to seize
What should be done if a charge hasn’t been registered within the 21 day time limit?
Apply to the court for an order to extend the registration period - if granted it will be valid.
What is a latent encumbrance?
Something which isn’t apparent or cant be discovered when inspecting the property.
Seller is under a duty to disclose these which it is aware of or has the means to know, acting reasonably and diligently.
When is a company search used?
When the seller is a company to make sure they exist and are not in liquidation.
What tenancies are excluded from the 1954 act?
agricultural tenancies
mining leases
service tenancies
fixed term tenancies of 6 months or less but may become protected if tenant has been in occupation for 12 months or more
How to contract out of the 1954 act?
Landlord serves warning notice
Tenant provides declaration
Signed declaration if completion is 14 days from warning notice
Statutory declaration if lease is less than 14 days
Lease must contain reference to both the notice and the declaration.
What is a 1954 act s25 notice?
Landlord notice
Can be friendly or hostile
Served min 6 months before date of termination and max 12 months
What are some grounds for a hostile s25 notice?
Discretionary
persistent and serious breach of a repairing obligation
persistent delay in paying rent
substantial breaches of tenant obligations
Mandatory
the landlord offers suitable alternative accommodation
the landlord intends to demolish or reconstruct the premises or carry out substantial construction work which require possession
the landlord intends to occupy the premises for itself
Is a tenant able to receive compensation under the 1954 act?
Compensatory ground - If the ground relies on no fault of the tenant (eg, the landlord needs to carry out work), then the tenant may be entitled to compensation
Non-compensatory ground - if the ground relies on the tenant’s fault (breach of covenant), then the tenant is not entitled to compensation
what are the notices available to a tenant under the 1954 act?
S26 notice - tenant proposing renewal - minimum 6 months notice max 12 months intention
s27 notice - tenant giving notice to leave - no less than 3 months (don’t need to serve but it is good practice)
what is a class D(ii) land charge?
restrictive covenant created after 1926
what is a class c(i) land charge
puisne mortgage (second legal mortgage)
what is a class c(iv) land charge?
estate contract e.g contract to buy, option agreement, contract for lease
what is a class D(iii) land charge?
equitable easement
what is a class F land charge?
spouses matrimonial right of occupation - it is not an interest in the land it is a statutory right to occupy under the family law act 1996
considerations for rights of way?
registration - burden must be registered over servient land in charges registers
adequacy - e.g is it only for cars and you need to be able to get lorry’s in
maintenance - usually obliged in common law to contribute towards maintenance
adoption - if private road is adopted required to pay costs to bring it up to adoptable standard
can additional enquiries be raised?
commercial - yes but sellers sol may decline to answer if feel they are irrelevant or would incur unnecessary time/expense
residential - buyer sol can only raise them to clarify issues arising out of the docs provided or which are relevant to title, existing or planned use, nature or location of property
Note 
Flashcards (21)