You act on behalf of Ian and Lesley Ingram who are selling their freehold house, Fair Lawn, Alphaville, Eastshire for £95,000 and purchasing a small freehold house, 33 Nightingale Lane, Chelsington, SW26, at a price of £265,000 and a cottage in the country in Westshire. There is a Mortgage of £30,000 on 15 Fair Lawn with the Megabucks Building Society. The Purchasers of 15 Fair Lawn are first time buyers, Anthony and Stephanie Fryer, both teachers, who are moving to Alphaville to take up posts at the newly opened Technical College. They are obtaining a 60% mortgage from the Helping Hand Building Society. The balance of the purchase price of Nightingale Lane will be paid in cash as Lesley has recently received a large legacy. The Solicitors acting for the Fryers are Messrs. Michael Quinn & Co., of London. The titles to both properties are registered. Assume that the Protocol is not being used.
(a) On receiving instructions from your Client what initial letters will you write to whom?
Upon receipt of the instructions to act from the client for the sale of their property at Fair Lawn, the letters that need to be written include: 1) acceptance of the offer sent to the buyer if the offer to purchase is amenable to the client; 2) request of Title Deeds to the lenders of the seller for the £30,000 mortgage; 3) request for copy of register entries pertaining to the client’s property from the HM District Land Registry; 4) instructions for the filling of the property information questionnaire from the HM Land Register to the client; and 5) instructions to list fixtures, fittings and contents to the client.
(b) What initial searches will you make on behalf of the Ingrams in relation to their purchase of 33 Nightingale Lane and give details of these.
Upon the receipt of the instructions to act in behalf of the client for the purchase of the property at Nightingale Lane, the initial searches for the client include: 1) preliminary inquiries about the property being sold with the solicitors of the seller primarily to determine the ownership and encumbrance status of the property; 2) searches and inquiries with the local authorities holding jurisdiction over the property in Nightingale Lane to confirm the status of the property; 3) in case the title to the property in Nightingale Lane is unregistered, conduct an index map search with the HM District Land Registry to determine any possible restrictions to property registration upon the completion of sale; 4) if the property is located in a rural area, a Commons Registration search would also be made in the office of the County Council to determine any encumbrances such as claims or other rights exercisable upon the land by other parties; 5) in case the property forms part of a coal mining community, a Coal Mining search will also be made with the British Coal plc for the purpose of determining whether the property forms part of a coal mining community; and 6) Land Charges Registry Search in bankruptcy with the Land Charges Registry to determine the existence of any bankruptcy orders made against any of the parties that would defeat the sale.
(c) What are office copy entries, what do they contain and how are they obtained?
Office copy entries refer to documents lodged with the Land Registry pertaining to registered land. These registers prove the ownership of the property and determine any registered encumbrances attached to the property. (Cheshire Building Society 2007) Office copy entries are obtained by applying with the Land Registry through Form OC1 and payment of the fee.
(d) Explain briefly the contents of the draft contract for the sale of 15 Fair Lawn.
The draft contract for the sale of the property at 15 Fair Lawn may contains the terms and conditions of The Standard Conditions of Sale involving important matters such as the amount, schedule of payment and form of payment of the deposit and the remaining amount, insurance coverage, procedures to be followed in transferring ownership, and time limits for the completion of the obligations of the parties after the exchange and signing of the contract, and the remedies in case of failure on the part of any party to meet obligations within the time limit agreed upon. However, the draft contract could also include special conditions such as covenants for title, which may be guarantee of full or limited title as provided in The Law of Property (Miscellaneous Provisions) Act 1994. Ultimately, the draft contract should contain all provisions necessary to make the sales contract valid as well as clarify the obligations of the parties, processes and time considerations.
(e) Explain what a Land Certificate and a Charge Certificate are and whether they are still relevant.
A Land Certificate refers to the document lodged with the Land Registry providing details of a property ownership. However, this is not a legally binding document proving ownership so that the Office Copy Entries constitutes the definitive proof of ownership. (home.co.uk 2007)
A Charge Certificate is issued by the HM Land Registry proving or transferring land ownership. This document is usually issued to the mortgagee registering the encumbrance to the title or the proprietor if the land is not encumbered by any mortgage. (selfbuildhome 2007) This is an important document to determine the encumbrance status of a property.
(f) Once contracts have been exchanged on both the Ingram's main sale and purchase (ignore the purchase of the cottage), briefly outline the steps that you will take in relation to
(i) the sale of 15 Fair Lawn and
After the exchange of contracts and assuming that the essential contents of the draft contract are amenable to both parties, the next step involve: 1) production of title (Office Copy Entries), for the examination of the buyer, which accompanies the draft contract; 2) the settlement of issues on requisitions on title and procedural matters covering the draft purchase deed; and 3) the sending of the completion statement to the buyer following the payment of the remaining purchase price less the deposit paid.
After completion, the registration of the property showing the transfer of ownership is made by lodging the documents with the proper office as well as the payment of the Land Transfer Tax depending upon the arrangement of the parties.
(ii) the purchase of 33 Nightingale Lane prior to and following completion.
After the exchange of contracts for the Ingrams’ purchase of the property at Nightingale Lane, the next steps involve: 1) examination of the Office Copy Entries that came with the draft contract; 2) sending of Conveyancing 28B Form for matters on requisition of title and procedural matters covering the purchase deed to the seller’s solicitor; 3) conduct of final searches to confirm the status of the property as expressed in the draft contract and supporting documents; 4) receipt of completion statement from the seller indicating the settlement of the purchase price; 5) payment of Land Transfer Tax depending upon the agreement of the parties; and 6) registration of the title under the name of the Ingrams through the lodging of the documents representing the sale.
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