The post-exchange, pre-completion stage of a conveyance is usually where it gets really busy. Often there is a strict deadline, as the completion date will have been incorporated into the contract. Failure to meet that date will result in damages and if it is your fault, you’ll be paying! Every little step is vital to completing the transaction, meeting the deadline and getting your bill paid, so attention to detail is key.
The most important document that is drafted at this stage (although in practice is often drafted prior to exchange) is the transfer. It is usually completed on Land Registry standard form TR1 – it would be useful to have a semi-completed version of this in your exam, to refer to if necessary. The transfer is the document that transfers legal title to the property along with all the rights and restrictions involved. It is the document used by Land Registry to update the title and so it is very important that it is drafted well. It is the buyer solicitor’s responsibility to draft the transfer, according to what was agreed in the contract. In non complicated transactions, you can probably use a few precedent phrases and copy the rest from the contract on to the TR1. However, when the seller is reserving new rights or granting additional rights to the buyer, it can become more complicated. Also, make sure the attestation clauses (the execution clauses) are correct for the type of person who will be signing – individuals must be witnessed, and companies can sign by the signature of two directors, a director and a secretary and a single director witnessed. There is a very useful Land Registry guide on execution of documents, which could be useful in the exam.
There are several steps that need to be undertaken by each party leading up to completion – most of these should be done in the ten days prior to completion, to prevent delay on the day. There is a lot to do in a short space of time so it is useful to keep a list. The various steps will be explained to you in the course but here are a few that I have run up against in practice and which you should be particularly aware of:
[two_third_last]In practice, the most frustrating part of preparing for completion is getting the documents executed and returned by the client. I have heard of documents being taxied back from clients’ offices in order to make the deadline, and of solicitors doing four-hour round trips to get a signature on a document that was not executed properly! Some companies and public bodies have to submit the documents for approval before signature, which may take some time – make sure you are aware if this is the case. Leave plenty of time for your clients to execute the docs and return them to you. Also, make it very clear what you want them to sign and what you don’t want them to (mark the date space in pencil with DO NOT DATE). Don’t forget the seller’s need to sign the plan as well if the transfer is to be registered.
In reality, this period is not that challenging but does require time management and organisation. If one little thing is forgotten, you could complete and bind your client to something that is not valid or a bad deal. Getting this stage right is crucial to ensure the rest of the transaction goes smoothly and you actually get your bill paid at the end of the day! It is likely to be tested in the exam so make sure you know the ins and outs of the stage well and will be able to get the steps (and the reasoning behind them) right if you need to![/two_third_last]
In the next post I will be look at choosing the largest part of BLP – Company law.