2021 re ce02 mock assessment v2 PDF

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Mock assessment real estate...

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LPC

MOCK ASSESSMENT

Real Estate

Although the mock examinations should alert you to the overall transactional style of the questions in the LPC exams and the level of detail required to answer them successfully, the form of each mock and the subject content is indicative only. The material included in this mock examination, its style of questions and enclosures are for general information only and should not be regarded either as a steer towards any particular area of the syllabus or an absolute indication of the format, accompanying documentation or style of the final examination. You should not assume that particular subject areas covered or the weighting given to them in this mock examination will or will not be replicated or followed in the final examination.

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Mock Examination (Open Book) Real Estate TIME ALLOWED:

1 HOUR 45 MINUTES

There are 50 marks available for this examination. It has two parts: Part 1

Multiple Choice Questions (MCQs) (10 marks). For each MCQ there are FOUR possible answers of which only ONE is the appropriate answer.

Part 2

Questions Requiring Written Answer (40 marks).

INSTRUCTIONS TO CANDIDATES    

Complete your MCQ answers on ELITE Write your answers to Part 2 in a word document. Insert your name and the name of your class in the header of your document. Do not write your candidate number. Record all your answers on ELITE for Part 1 and in your answer document for Part 2, NOT on this question paper.

YOU MUST ATTEMPT ALL QUESTIONS

This is an open book assessment. Staff cannot comment on the content of this mock exam. If you are uncertain about something then you should answer as you see fit.

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PART I

MULTIPLE CHOICE QUESTIONS

(10 MARKS)

Each of the FIVE multiple choice questions in Part 1 is worth two marks. Record your answers to the Multiple Choice Questions by typing your answer on your answer document. QUESTION 1 You act for Tenby plc on the purchase of an office building, Gower House, Pembroke (“the Property”). You have received official copies of the title and have discovered the following entry on the Proprietorship Register: “The transfer to the proprietor contains a covenant to observe and perform the covenants referred to in the Charges Register and of indemnity in respect thereof.” Which ONE of the following statements is CORRECT? A

The buyer will be required to give a similar covenant to the seller in the transfer and will only be liable for future breaches of any restrictive covenants on the Charges Register.

B

The buyer will be required to give a similar covenant to the seller in the transfer and will only be liable for future breaches of any positive covenants on the Charges Register.

C

The buyer will be required to give a similar covenant to the seller in the transfer and will be liable for future breaches of any restrictive and positive covenants on the Charges Register.

D

The buyer will be required to give a similar covenant to the seller in the transfer and will need to obtain restrictive covenant indemnity insurance in respect of the covenants on the Charges Register.

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QUESTION 2 You act for the prospective buyer of a registered freehold property in Leeds. Your client intends to block up the existing gated vehicle entrance in the western wall of the property once completion has taken place. You have received the official copies and there is, in the charges register, an entry recording an obligation in a 1967 conveyance on the part of the buyer of the property “to erect and thereafter maintain a wall (with a gate not less than six but not more than eight feet wide) such wall to be not less than 4 feet high along the western boundary of the property hereby conveyed”. There are no entries in the other registers except for a description of the property and details of the seller as registered proprietor, the seller having purchased and been registered as the proprietor of the property in 2001. Which ONE of the following statements is CORRECT? A

It will not be possible to block up the gated vehicle entrance as there is an easement preventing this on the title.

B

If there is no indemnity chain in place your client can block up the gated vehicle entrance without fear of the consequences.

C

According to the title there is an indemnity chain in place.

D

Your client could be liable for breach of the obligation in the 1967 conveyance if he blocks up the gated vehicle entrance because the burden of the obligation runs with the land.

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QUESTION 3 You are acting for Sanjay Restaurants Limited (“Sanjay”) which is buying a disused mill which it wants to convert into a restaurant. There is a covenant in the charges register of the title of the property as follows: “The Purchaser with the intent and so as to bind the Property hereby conveyed into whosoever hands the same may come and to benefit and protect the Vendor’s Retained Land hereby covenants with the Vendor not to use the Property other than as a mill.” You advise Sanjay of the effect of this covenant given his proposed use of the property. Which ONE of the following statements is CORRECT? A

Sanjay will only be bound by the covenant if it gives an indemnity covenant to the seller.

B

Sanjay will not be bound by this covenant as the burden does not pass.

C

Sanjay’s plans for the property will not be in breach of this covenant.

D

Sanjay should consider obtaining consent from the owner of the land with the benefit of the covenant or obtaining insurance.

QUESTION 4 You act for Stamford Sports (Retail) Limited (“Stamford”). Stamford is looking to buy a site and construct on it a new sports retail store. It has found a potential site, 98104 Craven Hill, Darwen (“the Property”). The Property is the site of a derelict former cotton mill and Stamford is concerned that the Property might be polluted. The seller has said that it is not aware of any contamination, but that Stamford should rely on its own searches and enquiries. Which ONE of the following statements is CORRECT? A

If the Property is contaminated due to pollution caused by processes undertaken at the former cotton mill, liability for cleaning up this contamination may fall on Stamford.

B

If you commission a desktop environmental study, the results of this will always provide conclusive evidence as to whether or not the Property is contaminated.

C

If you make a local search, the results of this will always provide conclusive evidence as to whether or not the Property is contaminated.

D

If the Property is contaminated, Stamford will not be able to obtain planning permission for its proposed retail store.

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QUESTION 5 You act for Carthy Developments Limited (“Carthy”) which is a property developer. Carthy is intending to buy the freehold of some agricultural land, Oak Hinton Farm in Cambridge (“Oak Hinton Farm”). Once Carthy has bought Oak Hinton Farm, it will be developed into a housing estate. Oak Hinton Farm has a registered freehold title. There is a covenant in the charges register preventing building work on the property without the consent of a neighbouring landowner. Which ONE of the following statements is CORRECT? A

In order to proceed with its proposed development of the property, Carthy will have to apply for planning permission, the only reason being that it is proposing to carry out building operations.

B

In order to proceed with its proposed development of the property, Carthy will have to apply for planning permission, the only reason being that it is proposing to make a material change of use.

C

In order to proceed with its proposed development of the property, Carthy will have to apply for planning permission as it is proposing to carry out building operations and to make a material change of use. It will also have to comply, or otherwise deal with, the terms of the covenant on the title.

D

In order to proceed with its proposed development of the property, Carthy will have to apply for planning permission as it is proposing to carry out building operations and to make a material change of use. The grant of planning permission in respect of the proposal will deal with the issues relating to the covenant.

TOTAL PART 1:

10 MARKS

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PART 2

QUESTIONS REQUIRING WRITTEN ANSWER (40 MARKS)

Facts relevant to Questions 1 and 2 You are a trainee solicitor in the Real Estate Department of Gibson & Weldon LLP (“G&W”). Your supervising solicitor, Teresa McKillop, acts for Lodrel Estates Limited (“Lodrel”) which is a developer that specialises in the renovation and conversion of former industrial buildings into offices. Lodrel has agreed to buy Castlereagh Building, Mason Road, Birmingham, B2 2PF (“Castlereagh Building”) from the current owner, Castlereagh Holdings Limited (“the Seller”). Castlereagh Building has been vacant for a number of years and is in a poor state. The Seller has had it on the market for a while and has had no interest from anyone other than Lodrel, which is why your client has been able to agree a good price for it. The purchase price is £300,000 and the Seller has agreed that it will not be charging VAT in addition to the agreed purchase price under any circumstances. QUESTION 1 (26 marks) a)

You have now investigated title to Castlereagh Building using the official copies and title plan which are the Documents at the back of this Examination Paper.

Explain any title issues that arise and any action to be taken as a result of your investigation of title. Note to Candidates: confine yourself to matters of title in this question as you have an opportunity to discuss matters relevant to searches and enquiries in part b). 16 marks b)

Teresa McKillop tells you that she has raised pre-contract enquiries of the Seller’s solicitor and has ordered a Water and Drainage Search, a commercial flood search, a chancel liability search, and a Local Search (submitting Form LLC1 and Forms CON 29 and CON 29O) but has asked you to consider what additional searches and enquiries she should make on Lodrel’s behalf in respect of Castlereagh Building.

Explain what additional pre-contract searches and enquiries or other investigations you would make and give reasons for your choice. 10 marks

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QUESTION 2 a)

(14 marks)

Assume that it is now February 2024 and that Lodrel successfully acquired Castlereagh Building in 2020 as planned.

Lodrel has now completed its planned works to renovate Castlereagh Building and has decided to sell the freehold in order to raise capital for other projects. It has found a buyer, Highlands Insurance plc. Lodrel wants to ensure that Lodrel recoups as much of the cost of the renovation works as possible, including any VAT paid. It is aware that this may have a knock on effect on the sale to Highlands Insurance plc. Advise Lodrel as to the VAT status of Castlereagh Building, Lodrel’s option in the light of the sale to Highlands Insurance and how the option affects Lodrel’s ability to recover VAT on the renovation works and any potential repercussions for the sale transaction. 9 marks b)

Assume that Lodrel agreed the VAT issue with Highlands Insurance plc and the matter proceeds to completion. The day before completion Lodrel’s managing director, Stan Greenside contacts Teresa and tells her that Highlands Insurance are refusing to complete on the basis that Lodrel had agreed to remove all the raised flower beds from the parking area before completion. Stan says that the contracted gardeners cannot now remove them until the following Wednesday and Highlands Insurance has been advised by its solicitors not to complete unless they get an undertaking from Gibson & Weldon that they will be removed by next Thursday.

Explain if you think Teresa should give an undertaking in the terms sought. 5 marks TOTAL PART 2:

40 MARKS

TOTAL FOR THIS MOCK EXAMINATION:

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DOCUMENT

Official copy of register of title

Title number WM235789 -

Edition date 12.09.2017

This official copy shows the entries subsisting on the register on 14 October 2020 at 11:16:36. This date must be quoted as the “search from date” in any official search application based on this copy. The date at the beginning of an entry is the date on which the entry was made in the register. Issued on 14 October 2020. Under s.67 of the Land Registration Act 2002 this copy is admissible in evidence to the same extent as the original. For information about the register of title see Land Registry website www.landregistry.gov.uk or Land Registry Public Guide 1- A guide to the information we keep and how you can obtain it. This title is dealt with by Land Registry Coventry

A: Property Register This register describes the land and the estate comprised in the Title WEST MIDLANDS :

BIRMINGHAM

1.

(14 August 1995) The freehold land shown and edged with a thick black line on the plan of the above title filed at the Registry and being Castlereagh Building, Mason Road, Birmingham, B2 2PF.

2.

(14 August 1995) There is excepted from the registration the mines and minerals underneath the property together with ancillary powers of working thereof.

3.

(14 August 1995) The Conveyance dated 1 July 1995 referred to in the Charges Register contains the following provision:“IT is hereby agreed and declared that the Purchaser shall not be or become entitled to any easement or any right of light or air or other easements or rights which would restrict or interfere with the free use of the Vendor’s retained property for building or any other purpose.”

B: Proprietorship Register This register specifies the class of title and identifies the owner. It contains any entries that affect the right of disposal. Title Absolute 1.

(17 March 2004) PROPRIETOR: CASTLEREAGH HOLDINGS LIMITED whose registered office is at 11 St Phillip’s Square, Birmingham, B11 2SD.

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2.

(17 March 2004) The price stated to have been paid on 28 February 2004 was £200,000.

C: Charges Register This register contains any charges and other matters that affect the land 1.

(14 August 1995) A Conveyance of the land in this title dated 1 July 1995 made between (1) Liverpool Metalwork Limited (the Vendor) and (2) Joseph Darby Limited (the Purchaser) contains the following covenants:“THE Purchaser with the intent and so as to bind (as far as practicable) the Property into whosoever hands the same may come and to benefit and protect the adjoining and neighbouring property of the Vendor or any part thereof HEREBY COVENANTS with the Vendor that he the Purchaser and his successors in title will at all times hereafter not do or allow to be done on the Property anything which may be or grow to be a nuisance or annoyance to the Vendor or his successors in title who are the owners for the time being of the Vendor’s adjoining and neighbouring land”.

2.

(17 March 2004) REGISTERED CHARGE dated 28 February 2004 to secure the moneys including the further advances therein mentioned.

3.

(17 March 2004) Proprietor: Barclays Bank PLC of 54 Lombard Street, London EC3P 3AH.

4.

(25 November 2012) REGISTERED CHARGE dated 04 November 2012 to secure the moneys including the further advances therein mentioned.

5.

(25 November 2012) Proprietor: The Royal Bank of Scotland of 109/109A Castle Street, Edinburgh EH2 4JW.

6.

(12 September 2017) UNILATERAL NOTICE in respect of an agreement dated 28 August 2017 made between (1) Castlereagh Holdings Limited and (2) Birmingham City Council.

7.

(12 September 2017) Beneficiary: Birmingham City Council Baskerville House, Centenary Square, Birmingham, B1 3PP.

END OF REGISTER

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TITLE NUMBER

WM235789 ORDNANCE SURVEY PLAN REFERENCE

COUNTY

SHEET

WEST MIDLANDS 1

NATIONAL GRID

SECTIO N

WW 1

C

Scale: 1/1250

© Crown copyright 2006

Worcester and Birmingham Canal

Metals Factory

Shop

Castlereagh Building

M a s o n

W&B Canal

R o a d

Shop Mason Road

This official copy issued on 14 October 2020 shows the state of this title plan on 14 October 2020 at 11.16.36. Admissible in evidence to the same extent as the original (s67 Land Registration Act 2002) This title plan shows the general position, not the exact line, of the boundaries. It may be subject to distortions in scale. Measurements scaled from this plan may not catch measurements between the same points on the ground. See Land Registry Public Guide 7 – Title Plans This title is dealt with by Land Registry Coventry Office

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