Drafting the Contract and Transfer/Conveyance
This domain tests whether you can turn instructions into a contract that is enforceable and a transfer HM Land Registry will accept.
The contract
- Formalities: s.2 LP(MP)A 1989 requires writing, all terms and signature by both parties. Incorporate the Standard Conditions by reference, subject to an order-of-precedence clause placing special conditions first.
- Skeleton: parties and capacity, property and title number, incumbrances subject to which the sale is made, price and deposit, completion date and place, risk and insurance, title guarantee, apportionments, VAT where relevant, and execution.
- Consumer sales: terms must be transparent and fair under the Consumer Rights Act 2015; unfair terms are not binding.
- Leaseholds add the lease, rent, service charge apportionment, the landlord's licence to assign and a deed of covenant.
The transfer
- Registered freehold: form TR1; registered leasehold: TP1; a charge: CH1. Unregistered land is conveyed by deed under s.52 LPA 1925.
- A deed must on its face be a deed, be signed in the presence of a witness who attests, and be delivered (s.1 LP(MP)A 1989).
- Title guarantee: full title guarantee implies the covenants in ss.2-4 LP(MP)A 1994 (disposition as beneficial owner, free from incumbrances other than those disclosed); limited title guarantee suits trustees, personal representatives and sellers without personal knowledge.
Co-ownership drafting
Where buyers hold unequal shares, the transfer should state that they hold as tenants in common in specified shares, and the application should include a Form A restriction.
Worked example
Two buyers contribute 70:30 with a joint mortgage. Draft the transfer to A and B as tenants in common in 70:30 shares, add a Form A restriction, and consider a separate declaration of trust. Many lenders require joint borrowers to hold as joint tenants with survivorship; if so, obtain the lender's written consent to the tenancy in common, or funds may not be released.
Traps
- Describing the beneficial shares in the contract but not the transfer, leaving a joint tenancy at law.
- Using full title guarantee where an executor cannot covenant for matters outside their knowledge.
- Executing for a company without the correct formalities (two authorised signatories, or a director and secretary).