Legal Practice Course (LPC) Property Law and Practice (Conveyancing) Flashcards

24 sample cards from the Property Law and Practice (Conveyancing) deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is a completion statement and what does it typically show?

   A statement prepared by the seller's solicitor setting out the exact sum due on completion: the purchase price, plus or minus apportionments (e.g. service charge, ground rent), less the deposit already paid, plus any chattels price, giving the net balance the buyer must send to complete.

2. What are 'requisitions on title' and the modern approach to them?

   Formal queries raised by the buyer about the title and completion arrangements. Modern practice uses the Law Society's standard Completion Information and Requisitions on Title (TA13) form, dealing mainly with practical completion arrangements (where to send money, undertakings to discharge the mortgage, handing over keys) since most title issues are resolved pre-contract.

3. When is Stamp Duty Land Tax payable and within what time must the SDLT return be filed?

   SDLT is payable on land transactions in England (and Northern Ireland) where the chargeable consideration exceeds the relevant threshold. The buyer must file an SDLT return (SDLT1) and pay any tax within 14 days of the effective date (usually completion). Registration cannot proceed without the SDLT certificate (SDLT5) for notifiable transactions.

4. How is residential SDLT calculated and what is the 'slice' system?

   SDLT is charged on a progressive 'slice' (banded) basis: each portion of the price within a band is taxed at that band's rate, not the whole price at one rate. For example, at standard residential rates only the portion above each threshold is taxed at the higher rate, so the total is the sum of tax on each slice.

5. What additional SDLT charge applies to second homes/buy-to-let purchases by individuals?

   A higher-rate surcharge (an additional percentage on top of the standard residential rates) applies where an individual buys an additional residential property and is not replacing their only/main residence. There is also a separate surcharge for non-UK resident buyers.

6. What must be done within the priority period after completion to perfect the buyer's title?

   The buyer's solicitor must apply to the Land Registry to register the transfer (and any new mortgage) within the 30-working-day priority period given by the OS1 search. Until registration the buyer holds only the equitable interest; legal title passes only on registration (s.27 LRA 2002 — registrable dispositions operate at law only when registered).

7. How is the seller's existing mortgage discharged and how is discharge evidenced on the register?

   The seller's solicitor uses the sale proceeds to redeem the mortgage and gives the buyer an undertaking to do so on completion. Discharge of a registered charge is evidenced electronically by form ED/DS1 (electronic discharge or DS1) lodged at the Land Registry, which removes the charge entry from the charges register.

8. What is a notice to complete and what does the SCS require before and after serving it?

   Where a party fails to complete on the contractual date (which is not 'of the essence' under the SCS), the innocent party may serve a notice to complete (SCS Condition 6.8), making time of the essence. The defaulting party then has ten working days (excluding the date of service) to complete. Failure entitles the innocent party to terminate and pursue remedies.

9. What remedies are available for delayed completion under the SCS before termination?

   Compensation for the period of delay calculated at the contract rate on the purchase price (less deposit, for a defaulting buyer) under SCS Condition 7.2, payable by the party at fault for the delay. Either party may also serve a notice to complete to escalate the position.

10. What is the difference between an 'agreement for lease' and the 'grant of a lease'?

    An agreement for lease is a contract obliging the parties to enter into a lease at a future date (an estate contract giving the tenant an equitable interest, registrable as a notice/land charge). The grant is the actual creation of the lease by deed. An agreement is used where works/conditions must be completed before the lease is granted.

11. What formalities are required to create a legal lease, and what is the exception for short leases?

    A legal lease must be created by deed (s.52 LPA 1925) and, if granted for more than 7 years, must be substantively registered with its own title (s.27 LRA 2002). Exception: a lease for 3 years or less taking effect in possession at the best rent without a fine can be created orally or in writing (s.54(2) LPA 1925).

12. What is the difference between privity of contract and privity of estate in enforcing leasehold covenants?

    Privity of contract exists between the original parties to the lease (the original landlord and tenant) and binds them throughout the term. Privity of estate exists between the current landlord and current tenant by virtue of holding the reversion/lease, allowing enforcement of covenants that 'touch and concern' the land between successors.

13. How does the Landlord and Tenant (Covenants) Act 1995 change the enforceability of covenants for leases granted on or after 1 January 1996?

    For 'new' tenancies (granted on/after 1.1.1996), all landlord and tenant covenants (unless expressed to be personal) pass automatically on assignment, and the outgoing tenant is generally released from liability on a lawful assignment (s.5). This replaced the old 'touch and concern' test and abolished original-tenant continuing liability for new leases.

14. What is an Authorised Guarantee Agreement (AGA) and when can a landlord require one?

    Under the LT(C)A 1995, an outgoing tenant of a new lease can be required to guarantee the performance of the immediate assignee (only) by entering an AGA. The landlord can require an AGA where the lease lawfully so provides, or where consent to assign is subject to such a condition that is reasonable.

15. What is a rent review clause and what is the most common type in commercial leases?

    A clause allowing the rent to be revised periodically during the term. The most common is an 'upward-only open market rent review', under which the rent is reviewed (typically every 5 years) to the open market rental value but can never fall below the existing rent, with disputes referred to an independent surveyor/arbitrator.

16. What is a service charge in a commercial/residential lease and what protections exist for residential tenants?

    A sum payable by the tenant towards the landlord's costs of maintaining, repairing and insuring the building/common parts. For residential long leases, the Landlord and Tenant Act 1985 (ss.18-30) requires service charges to be reasonable and reasonably incurred, requires consultation for major works, and gives tenants rights to challenge charges at the tribunal.

17. Distinguish assignment, underletting (subletting) and the requirement for a licence to assign.

    Assignment transfers the whole of the tenant's remaining interest to a new tenant (assignee), who takes the landlord's reversion-facing obligations. Underletting creates a new, shorter sub-lease out of the tenant's interest, keeping the head-tenant in place. Most leases require the landlord's prior written consent (a licence to assign/underlet) for either.

18. What statutory control applies where a lease requires the landlord's consent to assign and is silent on reasonableness?

    A qualified covenant (consent not to be unreasonably withheld) is implied to be subject to s.19(1) Landlord and Tenant Act 1927 (consent not to be unreasonably withheld). The Landlord and Tenant Act 1988 imposes a duty on the landlord to give consent within a reasonable time, except where reasonable not to, and to give written reasons for refusal.

19. What is security of tenure under Part II of the Landlord and Tenant Act 1954 and which tenancies qualify?

    It gives business tenants the right to remain in occupation after the contractual term ends and to apply for a new tenancy. It applies where the tenant occupies premises for the purposes of a business (s.23). The tenancy continues until terminated in the statutory manner, and the tenant can request a renewal.

20. On what grounds can a landlord oppose the grant of a new business tenancy under s.30(1) LTA 1954, and which give compensation?

    Seven grounds (a)-(g): (a) tenant's failure to repair; (b) persistent delay in paying rent; (c) other substantial breaches; (d) suitable alternative accommodation offered; (e) sub-tenancy of part — uneconomic subdivision; (f) landlord's intention to demolish/reconstruct; (g) landlord's intention to occupy. Grounds (e), (f) and (g) (the 'no-fault' grounds) entitle the tenant to statutory compensation.

21. How can the parties exclude a business tenancy from the security of tenure provisions of the LTA 1954?

    By a 'contracting-out' procedure under s.38A: before the tenant is bound, the landlord serves a prescribed warning notice and the tenant makes a declaration (a simple declaration if 14+ days' notice is given, or a statutory declaration if less than 14 days). The agreement to exclude ss.24-28 is then valid.

22. What is forfeiture of a lease and what must a lease contain for the landlord to exercise it?

    Forfeiture is the landlord's right to terminate the lease early for the tenant's breach and re-enter the premises. The lease must contain an express forfeiture (re-entry) clause; the right arises on the specified breach (e.g. non-payment of rent or breach of covenant).

23. What is the procedure for forfeiture for breaches other than non-payment of rent?

    The landlord must first serve a s.146 Law of Property Act 1925 notice specifying the breach, requiring it to be remedied (if capable of remedy) and requiring compensation. The tenant must be given a reasonable time to comply. Only if the tenant fails to remedy can the landlord forfeit by peaceable re-entry (commercial) or court proceedings.

24. What is relief from forfeiture and who may apply for it?

    An equitable remedy by which the court restores the lease despite a forfeiture, typically on the tenant paying arrears/remedying the breach and costs. The tenant (and, in some cases, sub-tenants and mortgagees) may apply. For rent arrears, relief is usually granted on payment of all arrears and costs; for other breaches, the court has discretion.

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Property Law and Practice (Conveyancing) flashcards FAQ