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Conveyancing

Off plan – completion date?

Anyone buying a property in a new development off plan should be warned of the potential problems of delayed completion. If it is a one-off development for a specific client there might well be a contractual completion date, but for a multi-unit development that will almost certainly not be the case. In practice, there may be an obligation for the developer to complete the building, and that might then trigger a notice requiring completion of the sale to take place, and there may also be an obligation on the developer to ensure that the builder complies with the building contract (but even that may be limited to a ‘best endeavours’ obligation).
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Fraud – cyber crime

All conveyancing firms need to be alert to the risks of cyber crime, in particular, the risks of fraudsters hacking into law firm e-mail accounts and intercepting e-mails between solicitors and clients, or between solicitors and their counter-parts in conveyancing transactions.

Even if solicitors meet their client face-to-face initially, the reality is that most conveyancing transactions revolve around e-mail. So, if a hacker can intercept the e-mail account there is enormous potential for fraud. Thus, in one recent case the hacker sent an e-mail to the client (posing as the solicitor) saying that the usual client account was being audited and so completion moneys should be sent to an alternative account. The astute client checked this with the solicitor (by e-mail), requesting confirmation of the client’s unique reference number to ensure that the e-mail was genuine; but, because the hackers had access to the whole e-mail account they could supply that reference, and so reassure the client.

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Mortgages – registered same date?

Suppose there are two legal charges, both dated the same date, and both registered at the LR on the same date. Which has priority? The simple answer is that the priority of mortgages is determined by the order in which they appear in the charges register (even if one was technically completed before the other).  

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Notice to complete – defect?

We all know that under standard property contracts (Standard Conditions of Sale; Standard Commercial Property Conditions) time is not of the essence. If a completion date has been missed, then the innocent party can serve a notice to complete on the defaulter and that then makes time of the essence. That notice to complete will require completion during the specified period (usually ten working days). If the defaulter does not complete before expiry of that notice to complete, then the innocent party can terminate the contract – but, importantly, there is no obligation on the innocent party to terminate. At the same time, it should be appreciated that an innocent party who serves a notice to complete must themself be ready, willing and able to complete. Accordingly, if they are unable to complete, but the defaulter is ready, able and willing to complete, then it is the defaulter who will be entitled to terminate the contract if completion does not take place. 

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Agreement for lease – unilateral notice?

     If an agreement for lease is protected by a notice (registered unilaterally), then does that also protect the leases that are eventually granted under that agreement? 

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Land Registry – no fax

It is no longer possible to fax the Land Registry (eg applications for searches, official copies or correspondence).  

 

Restriction – subsequent mortgage?

Suppose Borrower is lent money by Lender. Rather than taking a charge over Borrower’s property, Lender enters a restriction in the register of Borrower’s property stating that no disposition of the property may be made without Lender’s consent. Subsequently, however, Borrower grants a legal mortgage over that property to a bank and that mortgage is duly registered at the LR. Is the bank’s legal mortgage subject to Lender’s claim?

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Land Registry – postponement of charge

The process of postponing a charge has been simplified. Previously, not all postponements of charge could be by letter (eg a postponement related to value had to be by deed). Now, however, the LR will accept a letter of postponement for any type of postponement. The letter of postponement must be on the headed notepaper of the lender postponing; it must be signed by the lender; and it must be addressed to the LR or lender whose charge is gaining priority. Note that there is no need for the letter to be signed by either the registered proprietor or the lender whose charge is gaining priority. Acceptable signatories are:

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LA search – liability?

Two recent cases illustrate how liability can arise from a local authority search result. In one case, it was the LA that was liable and in the other it was the buyer’s solicitor:

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Land Registry – no redirection

In June 2015, the LR changed the addresses for applications by post, DX and personal delivery. Initially, there was a postal redirection service so that mail using the old (wrong) address would be delivered to the correct address. However, that ended in August 2015 and post will no longer be redirected to the correct address. Accordingly, it is now essential to use those correct addresses.

 


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