Drafting Contracts for Land Sales

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Questions and Answers

What is the significance of the area being sold being 'approximately half a hectare'?

  • It is important to note that the area is approximately half a hectare because this will affect the amount of Capital Gains Tax payable. (correct)
  • It is important to note that the area is approximately half a hectare because this will affect the amount of Stamp Duty Land Tax payable.
  • The area being approximately half a hectare is not significant to the sale.
  • It is important to note that the area is approximately half a hectare because this is a significant amount of land and will affect the sale price.

Why is it important to describe the land being retained by the client accurately in the contract?

  • To ensure that the client does not lose ownership of the land.
  • To ensure that the buyer is aware of the land that the seller is keeping.
  • To ensure that there is no confusion about the boundaries of the land being sold.
  • All of the above (correct)

What is the main purpose of including a scale plan annexed to the contract?

  • To provide a visual representation of the land being sold.
  • To provide a detailed description of the land being sold.
  • To ensure that there is no confusion about the boundaries of the land being sold.
  • All of the above (correct)

What is the primary benefit of explaining the relevant points of the clauses in the contract before each draft condition?

<p>All of the above (D)</p> Signup and view all the answers

Why is it courteous to the buyer's solicitor to anticipate the easements a buyer would want and include them in the contract?

<p>All of the above (D)</p> Signup and view all the answers

What is the main purpose of the revenue law advice given in this memo?

<p>To inform the client about the tax implications of the sale. (A)</p> Signup and view all the answers

What is the main reason why the memo advises against discussing Stamp Duty Land Tax?

<p>All of the above (D)</p> Signup and view all the answers

Why is it advisable to include details about VAT on the solicitor's costs in the memo?

<p>All of the above (D)</p> Signup and view all the answers

What is a key reason to negate implied easements in favour of the buyer?

<p>To prevent the buyer from acquiring rights that could hinder future development of the Retained Land. (B)</p> Signup and view all the answers

When are easements granted in favor of the buyer called?

<p>Grants (D)</p> Signup and view all the answers

What is the suggested negation of implied rights clause designed to do?

<p>Prevent the buyer from claiming implied rights to light or air. (A)</p> Signup and view all the answers

According to the content, why should reliance not be placed on s.62 of the Law of Property Act 1925 or the rule in Wheeldon v Burrows when reserving easements for the seller?

<p>Because these laws are only applicable to implied grants, not reservations. (D)</p> Signup and view all the answers

Why is it crucial to expressly set out the rights and reservations required by the parties, instead of relying on implied rights?

<p>To avoid potential disputes over the interpretation of implied rights. (D)</p> Signup and view all the answers

What is the Buyer's responsibility regarding the maintenance of the Accessway?

<p>The Buyer is responsible for a proportionate share of the cost of maintaining the Accessway. (C)</p> Signup and view all the answers

Which of these rights is granted to the Buyer regarding the existing drain and sewer on the Retained land? (Select all that apply)

<p>The Buyer must contribute to the cost of maintaining the existing services. (A), The Buyer has the right to inspect the existing services. (B)</p> Signup and view all the answers

What is the purpose of the broken [orange] line on the Plan mentioned in the contract?

<p>To mark the route of the new drain and sewer. (C)</p> Signup and view all the answers

How does the contract protect the Seller's interests regarding the new services?

<p>The Seller has the right to approve any modifications to the new services. (A)</p> Signup and view all the answers

What condition must the Buyer meet before entering the Retained Land to inspect, maintain, or repair the new services?

<p>The Buyer must provide written notice to the Seller. (D)</p> Signup and view all the answers

What is the primary concern addressed by providing the Seller with the right to remove the greenhouse?

<p>Ensuring the Buyer doesn't impede the Seller's access to the retained land. (D)</p> Signup and view all the answers

Which clause in the contract ensures that the Buyer's actions on the Retained Land are controlled?

<p>The clause granting the Buyer right to enter the Retained land for inspection and repair. (C)</p> Signup and view all the answers

According to the contract, what is the Buyer's primary responsibility regarding the existing services?

<p>The Buyer is responsible for any damage caused to the existing services. (C)</p> Signup and view all the answers

What must the Seller do before exercising the right to remove the greenhouse?

<p>Cause no unnecessary damage to the Property (A)</p> Signup and view all the answers

Which of the following is suggested as a prudent new covenant imposed on the buyer?

<p>To restrict the use of the new property to residential only (C)</p> Signup and view all the answers

Why should covenants be drafted as restrictive in nature?

<p>Because the burden of a positive covenant will not run with the land (A)</p> Signup and view all the answers

What should NOT be stated in drafting the covenant regarding the buyer's obligation to build?

<p>The buyer will only build a single storey dwelling (D)</p> Signup and view all the answers

What element should be expressly annexed to the Retained Land in the covenants?

<p>The benefit of the covenants (B)</p> Signup and view all the answers

What is a crucial point to understand when drafting a contract for the sale of part of a property?

<p>The contract must be more complex than a sale of the whole property. (D)</p> Signup and view all the answers

During legal practice courses, which aspect of the legal profession is emphasized through drafting questions?

<p>Drafting and writing skills (D)</p> Signup and view all the answers

Why is it essential to consult a precedent book or software when drafting a contract for the sale of part of a property?

<p>To use ready-made clauses and adapt them to the specific case. (A)</p> Signup and view all the answers

What is the primary responsibility of the seller's conveyancer in a property transaction?

<p>Protecting the seller's interests by securing appropriate covenants and easements. (D)</p> Signup and view all the answers

Why is slavishly copying from a precedent book not recommended when drafting a contract?

<p>It may not be appropriate for the specific circumstances. (C)</p> Signup and view all the answers

What could happen if the seller's conveyancer fails to secure appropriate covenants and easements for the client?

<p>The client might not be able to sell the retained land at a good price. (C)</p> Signup and view all the answers

What should be done before consulting a precedent when drafting a contract for the sale of part of a property?

<p>Review the client's instructions carefully. (A)</p> Signup and view all the answers

Why is drafting a more complex contract necessary when selling part of a property?

<p>It involves more specific considerations, like easements and covenants. (A)</p> Signup and view all the answers

What type of structure is permitted to be built on the Property according to the covenant?

<p>A bungalow and garage for one family (B)</p> Signup and view all the answers

What is the height requirement for the fence that must be maintained along the boundary?

<p>Six feet (C)</p> Signup and view all the answers

In regard to Capital Gains Tax, what area requirement must be met to enjoy an exemption?

<p>Land must measure less than 0.5 hectares (C)</p> Signup and view all the answers

After the disposal of land exceeding the exempt area, how is the capital gain calculated?

<p>Sale price less incidental acquisition and disposal costs (C)</p> Signup and view all the answers

What must the Buyer do concerning the Accessway as per the covenant?

<p>Ensure it remains unobstructed (C)</p> Signup and view all the answers

What type of activity is forbidden on the Property that could affect the Retained Land?

<p>Doing anything that may cause nuisance or annoyance (A)</p> Signup and view all the answers

What constitutes the annual exemption against chargeable gains for a client?

<p>A fixed amount established each year (D)</p> Signup and view all the answers

What action is advised for Mr. Brown to determine the size of the land he intends to retain?

<p>Requisition a survey to establish precise area (A)</p> Signup and view all the answers

Flashcards

Implied Easements

Rights over retained land automatically granted to a buyer under the Law of Property Act 1925, s.62 or Wheeldon v Burrows rule.

Negation of Implied Rights Clause

A clause specifically excluding any implied rights of light or air, preventing future building restrictions on retained land.

Easement Grant

Creating new easements in favor of the buyer.

Easement Reservation

Creating new easements in favor of the seller.

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s.62 of the Law of Property Act 1925, Wheeldon v Burrows rule

The rule that only applies to implied grants, not implied reservations.

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What is the land being sold?

A part of the land that the buyer is purchasing. The buyer wants to ensure that the seller is actually selling this.

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What is a description in the contract?

A legal description of the land that will be referenced in the contract. It includes the address, reference to the title register, and a plan showing boundaries.

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What is a title register?

A legal document that shows the ownership of property. It can be used to identify the boundaries of the land and the rights associated with the property.

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What is a scale plan?

A document that shows the boundaries of the land being sold. It is attached to the contract and shows the area that the buyer will be purchasing, and also the area that the seller will retain.

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What is an easement?

A legal document that allows someone to use another person's land. It can be used to create a right of way or to allow access to a property.

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Draft Contract

A legal document that outlines the terms and conditions of a property sale.

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Sale of Part

Selling only a portion of a property, as opposed to the entire property.

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Easement

A legal right that allows someone to use another person's land for a specific purpose.

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Covenant

A promise made in a contract that restricts the use of land.

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Precedent

A written document used as a guide when drafting legal documents.

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Adapting a Precedent

The process of amending a precedent to fit a specific scenario.

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Good and Marketable Title

The seller's legal obligation to ensure the property has a clear title, free from encumbrances.

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Adversely Affecting Marketability

When a conveyancer fails to properly protect the seller's interests, potentially hindering future sales of the remaining property.

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Accessway Right-of-Way

A clause in a contract that grants the buyer the right to use an existing accessway leading to their property, but requires them to contribute towards its maintenance.

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Right to Install New Services

A clause allowing the buyer to install new drainage and sewer lines across the seller's retained land, specifying a defined route to minimize intrusion.

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Right to Connect to Existing Services

A clause granting the buyer the right to connect to the seller's existing drainage and sewer lines, requiring shared responsibility for maintenance and repairs.

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Right to Access Retained Land

A clause enabling the buyer to access the retained land to inspect, maintain, and repair both new and existing services, requiring prior notice except in emergencies.

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Damage Repair Clause

A protective measure in the contract, requiring the buyer to repair any damage caused during access or repairs, ensuring the seller's property remains intact.

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Seller's Right to Remove Greenhouse

A provision in the contract that allows the seller to remove a greenhouse located on the property.

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Route Specification for New Services

A clause that limits the buyer's right to access the retained land for repairs to a specific area, minimizing interference with the seller's property.

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Seller's Protection in Access Clause

The seller protects their interests by a clause requiring prior notice and the buyer's responsibility for damage.

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What is a covenant?

A covenant is a promise made in a contract that binds the buyer to certain actions or restrictions on the property they are purchasing.

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What is a covenant that runs with the land?

A covenant that runs with the land binds future owners of the property to the terms of the covenant.

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What is a covenant that benefits the land?

A covenant that benefits the land means that the owner of that land can enforce the covenant against the owner of the burdened land.

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What is a covenant that burdens the land?

A covenant that burdens the land means the owner of that land has to comply with the covenant.

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What is a restrictive covenant?

A restrictive covenant is a covenant that restricts the use or development of the property. It restricts the owner's ability to do certain things.

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What does the fence covenant require?

This clause in the contract ensures that the buyer must build a fence along the boundary line.

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What does the accessway covenant require?

The buyer promises they will not park vehicles in the access way or obstruct it.

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What does the nuisance covenant require?

The buyer promises not to do anything that might annoy the owner of the retained land.

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Right to Remove Clause

A clause in a contract that specifies when and how a seller can remove items from a property before the sale is complete.

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Restrictive Covenant

A type of covenant that restricts what a property owner can do.

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Positive Covenant

A covenant that requires a property owner to do something.

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Burden of Covenant

A specific legal principle saying the burden of a positive covenant does not apply to future owners.

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Study Notes

Commentary on Draft Contracts for Land Sales

  • Crucial point: Selling part of a property requires a more complex contract than selling the whole
  • Includes accurate description of the sold part, easements, and new covenants
  • Drafting questions are common in property law examinations
  • Drafting is a core skill in the Legal Practice Course (LPC)
  • Drafting questions examine skill application in property law
  • Precedent books or software can aid the process
  • Written and drafting skill assessments are common

Adapting Precedents

  • Precedents are guides, not strict templates
  • Assess client needs and requirements
  • Modify precedents to satisfy client needs, not just copy

Protecting Sellers in Land Sales

  • Protecting seller's interests is critical, ensuring appropriate covenants and easements
  • Sellers' conveyancers must ensure adequate protection, preventing future issues with title
  • Seller's instructions need careful consideration by lawyers, not solely as guidelines
  • Implied rights to light or air can hinder future developments on retained property

Buyer Considerations

  • Buyer's needs should also be considered in the contract design
  • Providing courteous assistance to buyers avoids potential delays
  • Clauses should be clearly explained prior to drafting

Tax Considerations (Capital Gains Tax)

  • Capital Gains Tax is relevant in property transactions, particularly when significant amounts of land are sold.
  • The size of the area sold matters (here approximately half a hectare)
  • Avoid confusing Stamp Duty Land Tax (SDLT) with CGT (only payable by purchasers)
  • Advice is limited to general principles on CGT

Special Conditions

  • New Draft Clauses (a-d) specify obligations and rights in detail affecting easements, access, and use
  • The rights of both parties should be precisely outlined in the new draft clauses
  • Rights of way, drainage connection, and service to a new property must be included in the contract.
  • Seller can retain certain rights to remove the greenhouse before completion.
  • Covenants restricting use for residential purposes, obstructing a driveway, or causing a nuisance are considered.

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