1 Which of the following is correct in relation to considering a mortgage request from a limited company?
a) A lender will often seek personal guarantees from the directors as additional security for the loan.
b) A loan cannot be made to the company itself because it is not legal entity.
c) Any mortgage will be held in the names of the directors.
d) The loan is made to the directors.
2 A person of unsound mind who requires housing funded by a mortgage:
a) is able to borrow in his or her own right.
b) must be represented by a person appointed by the Court of Protection.
c) needs to appoint a lasting power of attorney to another individual.
d) should appoint a specific power of attorney to another individual.
3 Steven and Mary own a flat situated in a purpose built block comprising 12 identical properties. They are keen to purchase the freehold interest but, as a starting point for this to be possible, the Commonhold and Leasehold Reform Act 2002 requires that:
a) all other qualifying leaseholders in the block must be party to the transaction.
b) the entire block must be only for residential use.
c) the lease must have at least 21 years to run.
d) the lease must have originally been granted for a term exceeding 21 years.
4 Which type of property ownership allows each party a defined share of the property?
a) Joint and several
b) Joint tenancy
c) Ownership by demise
d) Tenancy in common
5 Sam bought a newly constructed house with NHBC Buildmark scheme protection dating from June 2006. When is the insurance under the scheme due to expire?
a) 2008
b) 2011
c) 2013
d) 2016
6 When an estate agent provides bedroom dimensions for a property being marketed, what, if any, maximum margin for error is normally allowed as a result of the Property Misdescriptions Act 1991?
a) 2% for length and 1% for width.
b) 5% on all dimensions.
c) 10cm on all dimensions.
d) No margin for error is allowed.
7 The principle of utmost good faith in respect of a contract to purchase a property requires:
a) both parties to the contract to be aged 18 or over.
b) the vendor to be legally able to sell the property.
c) the purchaser to be able to provide the required
deposit.
d) the seller to answer honestly all questions about
the property.
ANSWERS
1 a) It is common practice for lenders to seek personal guarantees from directors to offer additional security on lending.
2 b) Unless a mentally incapacitated person has already made arrangements before their incapacity, the Court of Protection will appoint an attorney to look after their financial affairs, including borrowing.
3 d) The original term of the lease must have been more than 21 years to enable it to qualify subject to other additional criteria.
4 d) In the case of tenancy in common each joint owner has a defined share of the property although not necessarily in equal shares.
5 d) The NHBC Buildmark Scheme provides a guarantee for the first 10 years of the property’s life.
6 c) The Property Misdescriptions Act 1991 requires measurements to be as accurate as possible. However, a margin of error of around 10 cm is reasonable in most domestic rooms.
7 d) The principle of utmost good faith requires both parties to answer all questions honestly and, with property, this is particularly relevant to the seller.
8 d) The principals involved in a property sale are the sellers and the buyers. Nick is the seller.
9 c) The lender has the right to protect its interest and will pay the premium and charge it to the mortgage account.
10 a) The MCOB rules ban ‘unsolicited real-time promotions’. This is commonly called ‘cold calling’.
