Exchange of contracts

• What does a new lease contract provide regarding the buyer and landlord?

  The buyer agrees to take the lease and the landlord agrees to grant the lease in the form of the agreed draft.
• How does the exchange of contracts usually occur?

  Exchange usually occurs over the phone.
• What do solicitors do during the exchange of contracts?

  Solicitors will go through the contracts.
• What must be inserted into the contracts during the exchange?

  The completion date must be inserted.
• What is the exchange date in the context of property contracts?

  The exchange date is the date when the contracts are formally exchanged.
• What are the three formulae for the exchange of contracts?

  • Formula A: One solicitor holds both signed parts of the contract and sends the signed version and deposit cheque prior.
  • Formula B: Each solicitor holds their own client's signed part, confirms in a call that versions are the same, and each sends their signed parts.
  • Formula C: Used in chain transactions, two calls are made: one to confirm readiness to exchange and then the actual exchange.
• What protection can a buyer's solicitor provide after the exchange of contracts if the completion date is more than a couple of weeks away?

  The buyer's solicitor can protect the position by registering an estate contract on the charges register if the title is registered.
• What can a buyer's solicitor do if the title is unregistered after the exchange of contracts?

  The solicitor can register a C (iv) land charge against the seller’s full name.
• What should be done to vary a contract?

  A new contract should be re-executed with the new terms included.
• What will happen if contracts are exchanged but the buyer cannot complete by the agreed completion date?

  Interest will start accruing on the balance of the purchase price (minus deposit) and the seller can serve a notice to complete
• What happens if after exchange the seller cannot complete?

  Buyer can take legal action. Such as forfit deposit, claim for damages, revoke the agreement
• What is a notice to complete?

  a notice to complete is given to a party after exchange that is delaying completion - usually 10 working days
• What can a buyer do if a seller is delaying completion?

  serve a notice to complete on seller -usually 10 working days. If this is not complied with they can terminate the contract
• Under the SCPC - what are consequences if buyer delays completion of purchase of commercial property?

  if seller has suffered actual loss then they can claim damages for breach of contract. However, thos will be reduced by the amount of compensation the buyer has paid under the SCPC.
• What is the AP1 form used for?

  Used to register changes to the property such as - change of name, address, ownership, add or remove legal charge, add or remove joint owner
• What should the buyers solicitors advise the client of prior to exchange of contract?

  Building insurance and SDLT/LTT tax liability
• Can sellers solicitor send contract bundle via email?

  Yes but each document must be separately identifiable and attached independently
• What documents should be included by sellers solicitor for registered land?

  • up to date official copies of register and title plan (register entries should be less than 6 months old)
  • Official copies of all filed documents
  • Copy of grant or power of attorney if applicable
• What should the sellers solicitor include in the contract bundle for unregistered land?

  • Land charges search against the seller/other appropriate names
  • Official search of index map
  • Epitome of title
  • Grant of probate or power of attorney if applicable
• what is purpose of seller solicitor completing TA6 form in contract bundle?

  This form includes information on the property; such as easements, boundary fences, planning permission and building control, sewage, heating systems, property history and rights to mine, all environmental matters.
• Why does the seller solicitor complete a TA10 contents and fittings form in contract bundle?

  This form details what is included in the sale: covers items that are potentially removable; such as televisions phones, satellites, baths, showers, toilet roll holders and lampshades.
• Which solicitor drafts the contract?

  sellers
• Which solicitor drafts the draft of the transfer deed?

  Buyers
• What must the buyers solicitor do with the seller title?

  check it against the lender requirements and notify lender of any issues of delays immediately
• What effect do apportionments have on the buyer?

  They can affect mortgage and SDLT/LTT liability
• What is purpose of TA13 form

  The form will include important deeds, documents, bank details, mortgage charges and arrangements that are for the handover such as assigning keys and alarm codes.

  
  

  This will be completed by the sellers solicitor.
• Can deposit be used by seller for a related purchase?

  Yes - only if Standard conditions of sale used no if SCPC used
• Does the seller have an obligation to pay compensation for delayed completion under SCPC

  NO only buyer
• What search should buyers solicitor completed before exchange?

  Local authority search
• In commercial transactions who will certificate of title be addressed too?

  Buyer and lender usually more detailed
• In residential transaction how must certificate of title be provided?

  In a form approved by the Law society and UK finance
• in commercial conveyance can deposit from buyer be used by seller before completion?

  yes if buyer consents