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PLP - Standard Conditions Of Sale (5th Edition)
property law and practice (457Z0013_2122_9Z5F)
Manchester Metropolitan University
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STANDARD CONDITIONS OF SALE (FIFTH EDITION – 2018
Revision)
1. GENERAL
1. Definitions 1. In these conditions: 1. 'accrued interest' means: 1. if money has been placed on deposit or in a building society share account, the interest actually earned 1. otherwise, the interest which might reasonably have been earned by depositing the money at interest on seven days' notice of withdrawal with a clearing bank less, in either case, any proper charges for handling the money 1. 'clearing bank' means a bank admitted by the Bank of England as a direct participant in its CHAPS system 1. 'completion date' has the meaning given in condition 6. 1. 'contents price' means any separate amount payable for contents included in the contract 1. 'contract rate' means the Law Society's interest rate from time to time in force 'conveyancer' means a solicitor, barrister, duly certified notary public, licensed conveyancer or recognised body under sections 9 or 23 of the Administration of Justice Act 1985 1. 'lease' includes sub-lease, tenancy and agreement for a lease or sub- lease 1. 'mortgage' means a mortgage or charge securing the repayment of money 1. 'notice to complete' means a notice requiring completion of the contract in accordance with condition 6 1. 'public requirement' means any notice, order or proposal given or made (whether before or after the date of the contract) by a body acting on statutory authority 1. 'requisition' includes objection 1. 'transfer' includes conveyance and assignment 1. 'working day' means any day from Monday to Friday (inclusive) which is not Christmas Day, Good Friday or a statutory Bank Holiday. 1. In these conditions the terms 'absolute title' and 'official copies' have the special meanings given to them by the Land Registration Act 2002. 1. A party is ready, able and willing to complete: 2. if he could be, but for the default of the other party, and
- in the case of the seller, even though the property remains subject to a mortgage, if the amount to be paid on completion enables the property to be transferred freed of all mortgages (except any to which the sale is expressly subject).
- These conditions apply except as varied or excluded by the contract. 1. Joint parties
- If there is more than one seller or more than one buyer, the obligations which they undertake can be enforced against them all jointly or against each individually. 1. Notices and documents
- A notice required or authorised by the contract must be in writing.
- Giving a notice or delivering a document to a party's conveyancer has the same effect as giving or delivering it to that party.
- Where delivery of the original document is not essential, a notice or document is validly given or sent if it is sent:
- by fax, or
- by e-mail to an e-mail address for the intended recipient given in the contract.
- Subject to conditions 1.3 to 1.3, a notice is given and a document is delivered when it is received.
- A notice or document sent through a document exchange is received when it is available for collection
- A notice or document which is received after 4 pm on a working day, or on a day which is not a working day, is to be treated as having been received on the next working day
- An automated response to a notice or document sent by e-mail that the intended recipient is out of the office is to be treated as proof that the notice or document was not received.
- Condition 1.3 applies unless there is proof:
- that a notice or document has not been received, or
- of when it was received.
- A notice or document sent by the following means is treated as having been received as follows:
(a) by first-class post: before 4 on the second working day after posting (b) by second-class post: before 4 on the third working day after posting (c) through a document exchange:
before 4 on the first working day after the day on which it would normally be available for collection by the addressee
to the seller's conveyancer or (in a case where condition 2.2 applies) a conveyancer nominated by him by cheque drawn on a solicitor's or licensed conveyancer's client account
If before completion date the seller agrees to buy another property in England and Wales for his residence, he may use all or any part of the deposit as a deposit in that transaction to be held on terms to the same effect as this condition and condition 2.2.
Any deposit or part of a deposit not being used in accordance with condition 2.2 is to be held by the seller's conveyancer as stakeholder on terms that on completion it is paid to the seller with accrued interest. 1. Auctions
On a sale by auction the following conditions apply to the property and, if it is sold in lots, to each lot.
The sale is subject to a reserve price.
The seller, or a person on his behalf, may bid up to the reserve price.
The auctioneer may refuse any bid.
If there is a dispute about a bid, the auctioneer may resolve the dispute or restart the auction at the last undisputed bid.
The deposit is to be paid to the auctioneer as agent for the seller. **1. MATTERS AFFECTING THE PROPERTY
Freedom from incumbrances**
The seller is selling the property free from incumbrances, other than those mentioned in condition 3.1.
The incumbrances subject to which the property is sold are:
those specified in the contract
those discoverable by inspection of the property before the date of the contract
those the seller does not and could not reasonably know about
those, other than mortgages, which the buyer knows about
entries made before the date of the contract in any public register except those maintained by the Land Registry or its Land Charges Department or by Companies House
public requirements.
After the contract is made, the seller is to give the buyer written details without delay of any new public requirement and of anything in writing which he learns about concerning a matter covered by condition 3.1.
The buyer is to bear the cost of complying with any outstanding public requirement and is to indemnify the seller against any liability resulting from a public requirement. 1. Physical state
The buyer accepts the property in the physical state it is in at the date of the contract unless the seller is building or converting it.
A leasehold property is sold subject to any subsisting breach of a condition or tenant's obligation relating to the physical state of the property which renders the lease liable to forfeiture.
A sub-lease is granted subject to any subsisting breach of a condition or tenant's obligation relating to the physical state of the property which renders the seller's own lease liable to forfeiture. 1. Leases affecting the property
The following provisions apply if any part of the property is sold subject to a lease.
The seller having provided the buyer with full details of each lease or copies of the documents embodying the lease terms, the buyer is treated as entering into the contract knowing and fully accepting those terms.
The seller is to inform the buyer without delay if the lease ends or if the seller learns of any application by the tenant in connection with the lease; the seller is then to act as the buyer reasonably directs, and the buyer is to indemnify him against all consequent loss and expense.
Except with the buyer's consent, the seller is not to agree to any proposal to change the lease terms nor to take any step to end the lease.
The seller is to inform the buyer without delay of any change to the lease terms which may be proposed or agreed.
The buyer is to indemnify the seller against all claims arising from the lease after actual completion; this includes claims which are unenforceable against a buyer for want of registration.
The seller takes no responsibility for what rent is lawfully recoverable, nor for whether or how any legislation affects the lease.
If the let land is not wholly within the property, the seller may apportion the rent. **1. TITLE AND TRANSFER
Proof of title**
Without cost to the buyer, the seller is to provide the buyer with proof of the title to the property and of his ability to transfer it, or to procure its transfer.
Where the property has a registered title the proof is to include official copies of the items referred to in rules 134(1)(a) and (b) and 135(1)(a) of the Land Registration Rules 2003, so far as they are not to be discharged or overridden at or before completion.
Where the property has an unregistered title, the proof is to include:
an abstract of title or an epitome of title with photocopies of the documents, and
retain it for use as the actual transfer C If the draft is returned the buyer is to send an engrossment to the seller
At least five working days before completion date
- Periods of time under conditions 4.3 and 4.3 may run concurrently.
- If the period between the date of the contract and completion date is less than 15 working days, the time limits in conditions 4.2, 4.3 and 4.3 are to be reduced by the same proportion as that period bears to the period of 15 working days. Fractions of a working day are to be rounded down except that the time limit to perform any step is not to be less than one working day. 1. Defining the property
- The seller need not: 11 the exact boundaries of the property 11 who owns fences, ditches, hedges or walls
- separately identify parts of the property with different titles further than he may be able to do from information in his possession. 1. Rents and rentcharges
- The fact that a rent or rentcharge, whether payable or receivable by the owner of the property, has been, or will on completion be, informally apportioned is not to be regarded as a defect in title. 1. Transfer
- The buyer does not prejudice his right to raise requisitions, or to require replies to any raised, by taking any steps in relation to preparing or agreeing the transfer.
- Subject to condition 4.6, the seller is to transfer the property with full title guarantee.
- The transfer is to have effect as if the disposition is expressly made subject to all matters covered by condition 3.1 and, if the property is leasehold, is to contain a statement that the covenants set out in section 4 of the Law of Property (Miscellaneous Provisions) Act 1994 will not extend to any breach of the tenant's covenants in the lease relating to the physical state of the property.
- If after completion the seller will remain bound by any obligation affecting the property which was disclosed to the buyer before the contract was made, but the law does not imply any covenant by the buyer to indemnify the seller against liability for future breaches of it: 12 buyer is to covenant in the transfer to indemnify the seller against liability for any future breach of the obligation and to perform it from then on, and
12 required by the seller, the buyer is to execute and deliver to the seller on completion a duplicate transfer prepared by the buyer.
The seller is to arrange at his expense that, in relation to every document of title which the buyer does not receive on completion, the buyer is to have the benefit of: 13 written acknowledgement of his right to its production, and 13 written undertaking for its safe custody (except while it is held by a mortgagee or by someone in a fiduciary capacity). 1. Membership of company
Where the seller is, or is required to be, a member of a company that has an interest in the property or has management responsibilities for the property or the surrounding areas, the seller is, without cost to the buyer, to provide such documents on completion as will enable the buyer to become a member of that company. 1. RISK, INSURANCE AND OCCUPATION PENDING COMPLETION
The property is at the risk of the buyer from the date of the contract.
The seller is under no obligation to the buyer to insure the property unless:
the contract provides that a policy effected by or for the seller and insuring the property or any part of it against liability for loss or damage is to continue in force, or
the property or any part of it is let on terms under which the seller (whether as landlord or as tenant) is obliged to insure against loss or damage.
If the seller is obliged to insure the property under condition 5.1, the seller is to:
do everything necessary to maintain the policy;
permit the buyer to inspect the policy or evidence of its terms;
if before completion the property suffers loss or damage:
pay to the buyer on completion the amount of the policy monies which the seller has received, so far as not applied in repairing or reinstating the property, and
if no final payment has then been received, assign to the buyer, at the buyer's expense, all rights to claim under the policy in such form as the buyer reasonably requires and pending execution of the assignment hold any policy monies received in trust for the buyer.
cancel the policy on completion.
Where the property is leasehold and the property, or any building containing it, is insured by a reversioner or other third party, the seller is to use reasonable efforts to ensure that the insurance is maintained until completion and if, before completion, the property or building suffers loss or damage the seller is to assign to the buyer on completion, at the buyer's expense, such rights as the seller may have in the policy monies, in such form as the buyer reasonably requires.
If the money due on completion is received after 2 pm, completion is to be treated, for the purposes only of conditions 6 and 7, as taking place on the next working day as a result of the buyer's default.
Condition 6.1 does not apply and the seller is treated as in default if:
- the sale is with vacant possession of the property or any part of it, and
- the buyer is ready, able and willing to complete but does not pay the money due on completion until after 2 pm because the seller has not vacated the property or that part by that time. 1. Arrangements and place
The buyer's conveyancer and the seller's conveyancer are to co-operate in agreeing arrangements for completing the contract.
Completion is to take place in England and Wales, either at the seller's conveyancer's office or at some other place which the seller reasonably specifies. 1. Apportionments
On evidence of proper payment being made, income and outgoings of the property are to be apportioned between the parties so far as the change of ownership on completion will affect entitlement to receive or liability to pay them.
If the whole property is sold with vacant possession or the seller exercises his option in condition 7.2, apportionment is to be made with effect from the date of actual completion; otherwise, it is to be made from completion date.
In apportioning any sum, it is to be assumed that the seller owns the property until the end of the day from which apportionment is made and that the sum accrues from day to day at the rate at which it is payable on that day.
For the purpose of apportioning income and outgoings, it is to be assumed that they accrue at an equal daily rate throughout the year.
When a sum to be apportioned is not known or easily ascertainable at completion, a provisional apportionment is to be made according to the best estimate available. As soon as the amount is known, a final apportionment is to be made and notified to the other party. Any resulting balance is to be paid no more than ten working days later, and if not then paid the balance is to bear interest at the contract rate from then until payment.
Compensation payable under condition 5.2 is not to be apportioned. 1. Amount payable
The amount payable by the buyer on completion is the purchase price and the contents price (less any deposit already paid to the seller or his agent) adjusted to take account of:
apportionments made under condition 6.
any compensation to be paid or allowed under condition 7.
1. Title deeds 1. As soon as the buyer has complied with all his obligations under this contract on completion the seller must hand over the documents of title. 1. Condition 6.5 does not apply to any documents of title relating to land being retained by the seller after completion. 1. Rent receipts 7. The buyer is to assume that whoever gave any receipt for a payment of rent or service charge which the seller produces was the person or the agent of the person then entitled to that rent or service charge. 1. Means of payment 8. The buyer is to pay the money due on completion by a direct transfer of cleared funds from an account held in the name of a conveyancer at a clearing bank and, if appropriate, an unconditional release of a deposit held by a stakeholder. 1. Notice to complete 1. At any time after the time applicable under condition 6.1 on completion date, a party who is ready, able and willing to complete may give the other a notice to complete. 1. The parties are to complete the contract within ten working days of giving a notice to complete, excluding the day on which the notice is given. For this purpose, time is of the essence of the contract. 1. On receipt of a notice to complete: 4. if the buyer paid no deposit, he is forthwith to pay a deposit of 10 per cent 4. if the buyer paid a deposit of less than 10 per cent, he is forthwith to pay a further deposit equal to the balance of that 10 per cent. **1. REMEDIES
Errors and omissions**
If any plan or statement in the contract, or in the negotiations leading to it, is or was misleading or inaccurate due to an error or omission by the seller, the remedies available to the buyer are as follows.
When there is a material difference between the description or value of the property, or of any of the contents included in the contract, as represented and as it is, the buyer is entitled to damages.
An error or omission only entitles the buyer to rescind the contract:
where it results from fraud or recklessness, or
where he would be obliged, to his prejudice, to accept property differing substantially (in quantity, quality or tenure) from what the error or omission had led him to expect.
If either party rescinds the contract:
the buyer is to return any documents he received from the seller and is, at the seller's expense, to cancel any registration of the contract.
The buyer retains his other rights and remedies. **1 LEASEHOLD PROPERTY
Existing leases**
The following provisions apply to a sale of leasehold land.
The seller having provided the buyer with copies of the documents embodying the lease terms, the buyer is treated as entering into the contract knowing and fully accepting those terms. 1. New leases
The following provisions apply to a contract to grant a new lease.
The conditions apply so that: 10.'seller' means the proposed landlord 11.'buyer' means the proposed tenant 12.'purchase price' means the premium to be paid on the grant of a lease.
The lease is to be in the form of the draft attached to the contract.
If the term of the new lease will exceed seven years, the seller is to deduce a title which will enable the buyer to register the lease at the Land Registry with an absolute title.
The seller is to engross the lease and a counterpart of it and is to send the counterpart to the buyer at least five working days before completion date.
The buyer is to execute the counterpart and deliver it to the seller on completion. 1. Consent 13.8.
The following provisions apply if a consent to let, assign or sub-let is required to complete the contract
In this condition 'consent' means consent in the form which satisfies the requirement to obtain it. 14.8. 10 seller is to apply for the consent at his expense, and to use all reasonable efforts to obtain it 10 buyer is to provide all information and references reasonably required.
Unless he is in breach of his obligation under condition 8.3, either party may rescind the contract by notice to the other party if three working days before completion date (or before a later date on which the parties have agreed to complete the contract): 11 consent has not been given, or
11 consent has been given subject to a condition to which a party reasonably objects. In that case, neither party is to be treated as in breach of contract and condition 7.1 applies. 1 CONTENTS
- The following provisions apply to any contents which are included in the contract, whether or not a separate price is to be paid for them.
- The contract takes effect as a contract for sale of goods.
- The buyer takes the contents in the physical state they are in at the date of the contract.
- Ownership of the contents passes to the buyer on actual completion.
PLP - Standard Conditions Of Sale (5th Edition)
Module: property law and practice (457Z0013_2122_9Z5F)
University: Manchester Metropolitan University
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